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AGC Networks Ltd.

BSE: 500463 Sector: Telecom
NSE: AGCNET ISIN Code: INE676A01019
BSE LIVE 15:24 | 08 Dec 97.20 0.70
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NSE LIVE 15:30 | 08 Dec 97.45 1.50
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OPEN 96.55
PREVIOUS CLOSE 96.50
VOLUME 1180
52-Week high 112.35
52-Week low 56.60
P/E
Mkt Cap.(Rs cr) 276.73
Buy Price 97.20
Buy Qty 5.00
Sell Price 97.75
Sell Qty 20.00
OPEN 96.55
CLOSE 96.50
VOLUME 1180
52-Week high 112.35
52-Week low 56.60
P/E
Mkt Cap.(Rs cr) 276.73
Buy Price 97.20
Buy Qty 5.00
Sell Price 97.75
Sell Qty 20.00

AGC Networks Ltd. (AGCNET) - Director Report

Company director report

The Directors hereby present the 30th Annual Report and the auditedfinancial statements of the Company for the year ended March 31 2016.

1. Financial Results

The results of the Company on a standalone and Consolidated basis are as given below:

Rs./ Cr

Standalone Consolidated
Year ended 31/03/2016 Year ended 31/03/2015 Year ended 31/03/2016 Year ended 31/03/2015
Sales & Services (Gross) 314.57 341.27 882.76 892.04
Sales & Services (Net) 320.04 350.83 886.89 897.17
Profit before interest depreciation & tax (EBIDA) -7.38 31.63 12.83 62.04
Less : Interest and finance charges (Net) 24.10 24.17 26.68 25.92
Less : Depreciation 5.23 5.13 8.50 18.44
Profit before tax from continuing operations -36.71 2.33 -22.35 17.68
Less : Provision for tax (including Deferred tax) 0.00 2.71 12.24 2.91
Profit after tax from continuing operations -36.71 -0.38 -34.59 14.77
Profit after tax from discontinuing operations 0.00 0.00 0.00 0.00
Profit after tax -36.71 -0.38 -34.59 14.77
Balance brought forward from previous year -90.28 -89.90 -134.12 -148.30
Amount available for appropriation -126.99 -90.28 -168.71 -133.53
Appropriations :
Profit on Demerger/Additional Depreciation 0.00 0.00 0.00 0.59
Transfer to General Reserve 0.00 0.00 0.00 0.00
Balance carried to Balance Sheet -126.99 -90.28 -168.71 -134.12

2. Dividend

In view of the losses your Directors have not recommended any dividend for thefinancial year ended March 31 2016.

3. Financial Performance

The Company for the year ended March 31 2016 recorded a gross turnover of Rs. 314.57Crores as against Rs. 341.27 Crores for the period ended March 31 2015. The net loss isRs. 34.59 Crores for the financial year ended March 31 2016 as against the net profit ofRs. 14.77 Crores for the financial year ended March 31 2015.

4. ORGANIZATIONAL INITIATIVES

Building a Global Connect through Culture & Engagement:

AGC aims to create a positive work environment through Camaraderie Collaboration &Communication and thus position AGC as a "Great Place to work".

To create a culture where employees are committed to their organization’s goalsand values motivated to contribute to organizational success and are able at the sametime to enhance their own sense of well-being.

1. Employee Connect Programs & Corporate Social responsibilities

I. Corporate Social Responsibilities - As a responsible corporate organization AGChas been consistently working towards adding value to the society through some ofit’s community initiatives such as Give Help Give Hope- Support Chennai initiativesand Back to School- A donation drive held across geographies (US India) to provideliteracy support to underprivileged children towards the noble cause of supporting childeducation.

II. Employee Connect Programs; Planet H - With an intent to create happy planet atAGC.

a. International Women’s Day celebrations - On 8th March’16 AGCcelebrated International Women’s day (IWD 2016) globally through series ofengagement initiatives to rejoice the indomitable spirit of women. At AGC we believe thatdiversity and inclusion is a very strong business imperative and through this initiativewe connected our diverse women workforce across global locations.

b. Health & Wellness - The old adage "Health is Wealth" is believedby AGCians to the core. In alignment to this "Employee Health and Wellness initiativeat AGC" was launched through preventive health checks imbibing correct nutrition inour lifestyle. Free counseling sessions by medical experts and an Eye Check-up Camp wasorganized to encourage the value of adopting healthier lifestyle.

c. My Expressions – Hobby Initiative - ‘My Expressions’ contest wasa great opportunity for all employees to showcase their talent and express their passionsand belief through imagery. Painting and Photography enthusiasts across the globeparticipated with vibrant enthusiasm and connect.

III. Communication:

a. CEO Konnect - An All Hands Communication is an important Employee Connectplatform where the Whole Time Director shares organization-wide update directions andoverall imperatives with the employees.

b. Focus Group Meeting - An ideation meeting with Management Team to discuss ideasand brainstorm suggestions communicate strategic views and future plans for the businessand discuss ways to accelerate business. This platform is to gather market intelligenceignite creative thinking brainstorm and ideate strategies to build new roadways into themarket and understand the needs of customers and vendors.

IV. Learning Programs - Learning and development offerings are customized foremployees across career levels skill and domains. Learning expertise has been cultivatedin-house in the form of dedicated internal trainers and lab set ups. New learning anddevelopment methodologies were launched to maximize individual capability and performance.Key OEM certifications achieved to enable partnerships with prime OEMs.

5. Management’s Discussion and Analysis report

Management’s Discussion and Analysis Report for the year under review asstipulated under SEBI (LODR) Regulations 2015 is presented in a separate section formingintegral part of the Annual Report.

6. Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested. For detailed with regardto reportable material weaknesses if any please refer Statutory Auditors’ reportforming part of the report.

7. Fixed Deposits

The Company has not accepted any Fixed Deposits during the year.

8. Subsidiaries

In accordance with the general circular issued by the Ministry of Corporate AffairsGovernment of India the Balance Sheet Profit and Loss Account and other documents of thesubsidiary companies are not being attached with the Balance Sheet of the Company.However the financial information of the subsidiaries companies is disclosed in theAnnual Report in compliance with the said circular. The Company will make available theAnnual Accounts of the subsidiary companies and the related detailed information to anymember of the Company who may be interested in obtaining the same. The annual accounts ofthe subsidiary companies will also be kept open for inspection at the Registered Office ofthe Company and that of the respective subsidiary companies. The Consolidated FinancialStatements presented by the Company include the financial results of its subsidiarycompanies.

A statement containing salient features of the financial statements of each of thesubsidiaries of the Company in Form No. AOC-1 is presented on page No. 107 of this AnnualReport.

9. Particulars of Loans given investments made Guarantees given and securitiesprovided

Particulars of Loans given investments made Guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the notes to financial statements.

10. Statutory Auditors and their report

M/s. Walker Chandiok & Co LLP Chartered Accountants Mumbai Statutory Auditors ofthe Company shall hold office till the conclusion of the ensuing Annual General Meetingand are eligible for re-appointment. They have confirmed their eligibility to the effectthat their re-appointment if made would be within the prescribed limits under the Actand that they are not disqualified for re-appointment.

The Notes to financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. Following were thereservation/qualifications mentioned in their Audit Report for the financial year ended31st March 2016 along with view of the Management for the same.

A. Standalone Audit report

I. As stated in Note 4 (i) to the Statement during the year ended 31 March 2015 theCompany had recognized sale of properties having aggregate carrying value of Rs. 1.09crores and profit on such sale amounting to Rs. 46.04 crores (net of incidental sellingexpenses amounting to Rs. 3.39 crores) under ‘exceptional items’. In ouropinion as the significant risks and rewards for the said properties had not beentransferred recognition of such sale was not in accordance with the principles laid underAccounting Standard (AS) 9 Revenue Recognition and the sale should have been reversedduring the year ended 31 March 2016. Had the Company followed principles of AS 9 andreversed the sale transaction during the year ended 31 March 2016 the prior period itemsand loss before tax would have been higher by Rs. 46.04 crores each. (March 2015:Exceptional items and profit before tax would have been lower by Rs. 46.04 crores each).Tax expense for the year ended 31 March 2016 would have been lower by Rs. 3.27 crores(March 2015: Rs. 3.27 crores). Long-term loans and advances and carrying value of tangibleassets as at 31 March 2016 would have been higher by Rs. 3.27 crores (March 2015: Rs. 3.27crores) and Rs. 1.09 crores (March 2015: Rs. 1.09 crores) respectively; reserves andsurplus other current assets and other current liabilities as at that date would havebeen lower by Rs. 42.77 crores (March 2015: Rs. 42.77 crores) Rs. 47.32 crores (net ofRs. 3.20 crores received during the year) (March 2015: Rs. 50.52 crores) and Rs. 0.19crores (March 2015: Rs. 3.39 crores) respectively. Our audit opinion on the standalonefinancial statements for the year ended 31 March 2015 and standalone review opinion on theresults for the quarter ended and nine months ended 31 December 2015 were qualified inrespect of this matter.

Management’s views:

During the previous year ended 31 March 2015 the Company entered into deeds ofassignment to transfer all the rights title and obligations of its land and buildingsituated at Gandhinagar to another company for a consideration of Rs. 50.52 Crores.Subsequent to previous year end the lender to whom these assets were provided as securityprovided its in-principal approval for the said transfer subject to fulfilment ofconditions stated therein. The said transfer is pending approval from the relevantgovernment authority and transfer of legal title that are considered to be procedural innature. Accordingly the Company had recognised profit on sale of Fixed Assets of Rs. 46.04Crores (net of incidental expenses Rs. 3.39 Crores) during the year ended 31 March 2015.During the year the Company has received approval from the lender for sale of one of theproperty sold for consideration of Rs. 5.89 crores and also realised part consideration ofRs. 3.20 crores from the buyer. Subsequent to the year ended 31 March 2016 approval fromthe requisite authorities have also been received and sale deed has been executed betweenthe Company and the buyer for transfer of legal title for one of the property. The Companyhas applied for requisite approval for the balance properties which are still awaited asof date. Accordingly management believes that the Internal Financial Controls areoperating effectively.

II. As stated in in our opinion according to the information and explanations given tous and based on our audit the following material weakness has been identified in theoperating effectiveness of the Company’s Internal Financial Control over FinancialReporting (IFCoFR) as at 31 March 2016:

The Company’s internal financial control over evaluation of accounting ofnon-routine transactions was not operating effectively. This has during the yearresulted in non-reversal of transaction of sale of properties recorded in the previousyear due to inappropriate evaluation of timing of transfer of risk and reward. This hasled to misstatements of long-term loans and advances tangible assets other currentassets other current liabilities prior period items tax expense and resultant impact onthe loss before tax and the reserves and surplus as at and for the year ended 31 March2016.

A ‘material weakness’ is a deficiency or a combination of deficiencies inIFCoFR such that there is a reasonable possibility that a material misstatement of thecompany’s annual or interim financial statements will not be prevented or detected ona timely basis.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit test applied in our audit of the 31 March 2016financial statements of the Company and the material weakness has affected our opinion onthe standalone financial statements of the Company and we have issued a qualified opinionon the standalone financial statements.

Management’s views:

During the previous year ended 31 March 2015 the Company entered into deeds ofassignment to transfer all the rights title and obligations of its land and buildingsituated at Gandhinagar to another company for a consideration of Rs. 50.52 Crores.Subsequent to previous year end the lender to whom these assets were provided as securityprovided its in-principal approval for the said transfer subject to fulfilment ofconditions stated therein. The said transfer is pending approval from the relevantgovernment authority and transfer of legal title that are considered to be procedural innature. Accordingly the Company had recognised profit on sale of Fixed Assets of Rs. 46.04Crores (net of incidental expenses Rs. 3.39 Crores) during the year ended 31 March 2015.During the year the Company has received approval from the lender for sale of one of theproperty sold for consideration of Rs. 5.89 crores and also realised part consideration ofRs. 3.20 crores from the buyer. Subsequent to the year ended 31 March 2016 approval fromthe requisite authorities have also been received and sale deed has been executed betweenthe Company and the buyer for transfer of legal title for one of the property. The Companyhas applied for requisite approval for the balance properties which are still awaited asof date. Accordingly management believes that the Internal Financial Controls areoperating effectively.

B. Consolidated Audit report

I. As stated in Note 5 (i) to the Statement during the year ended 31 March 2015 theCompany had recognized sale of properties having aggregate carrying value of Rs. 1.09crores and profit on such sale amounting to Rs. 46.04 crores (net of incidental sellingexpenses amounting to Rs. 3.39 crores) under ‘exceptional items’. In ouropinion as the significant risks and rewards for the said properties had not beentransferred recognition of such sale was not in accordance with the principles laid underAccounting Standard (AS) 9 Revenue Recognition and the sale should have been reversedduring the year ended 31 March 2016. Had the Company followed principles of AS 9 andreversed the sale transaction during the year ended 31 March 2016 the prior period itemsand loss before tax would have been higher by Rs. 46.04 crores each. (March 2015:Exceptional items and profit before tax would have been lower by Rs. 46.04 crores each).Tax expense for the year ended 31 March 2016 would have been lower by Rs. 3.27 crores(March 2015: Rs. 3.27 crores). Long-term loans and advances and carrying value of tangibleassets as at 31 March 2016 would have been higher by Rs. 3.27 crores (March 2015: Rs. 3.27crores) and Rs.1.09 crores (March 2015: Rs. 1.09 crores) respectively; reserves andsurplus other current assets and other current liabilities as at that date would havebeen lower by Rs. 42.77 crores (March 2015: Rs. 42.77 crores) Rs. 47.32 crores (net ofRs. 3.20 crores received during the year) (March 2015: Rs. 50.52 crores) and Rs. 0.19crores (March 2015: Rs. 3.39 crores) respectively. Our audit opinion on the consolidatedfinancial statements for the year ended 31 March 2015 and consolidated review opinion onthe results for the quarter ended and nine months ended 31 December 2015 were qualified inrespect of this matter.

Management’s views:

During the previous year ended 31 March 2015 the Company entered into deeds ofassignment to transfer all the rights title and obligations of its land and buildingsituated at Gandhinagar to another company for a consideration of Rs. 50.52 Crores.Subsequent to previous year end the lender to whom these assets were provided as securityprovided its in-principal approval for the said transfer subject to fulfilment ofconditions stated therein. The said transfer is pending approval from the relevantgovernment authority and transfer of legal title that are considered to be procedural innature.

Accordingly the Company had recognised profit on sale of Fixed Assets of Rs. 46.04Crores (net of incidental expenses Rs. 3.39 Crores) during the year ended 31 March 2015.During the year the Company has received approval from the lender for sale of one of theproperty sold for consideration of Rs. 5.89 crores and also realised part consideration ofRs. 3.20 crores from the buyer. Subsequent to the year ended 31 March 2016 approval fromthe requisite authorities have also been received and sale deed has been executed betweenthe Company and the buyer for transfer of legal title for one of the property. The Companyhas applied for requisite approval for the balance properties which are still awaited asof date. Accordingly management believes that the Internal Financial Controls areoperating effectively.

II. In our opinion according to the information and explanations given to us and basedon our audit the following material weakness has been identified in the operatingeffectiveness of the Holding Company’s Internal Financial Control over FinancialReporting (IFCoFR) as at 31 March 2016:

The Holding Company’s internal financial control over evaluation of accounting ofnon-routine transactions was not operating effectively. This has during the yearresulted in non-reversal of transaction of sale of properties recorded in the previousyear due to inappropriate evaluation of timing of transfer of risk and reward. This hasled to misstatements of long-term loans and advances tangible assets other currentassets other current liabilities prior period items tax expense and resultant impact onthe loss before tax and the reserves and surplus as at and for the year ended 31 March2016.

A ‘material weakness’ is a deficiency or a combination of deficiencies inIFCoFR such that there is a reasonable possibility that a material misstatement of thecompany’s annual or interim financial statements will not be prevented or detected ona timely basis.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit test applied in our audit of the 31 March 2016financial statements of the Holding Company and the material weakness has affected ouropinion on the consolidated financial statements of the Holding Company and we have issueda qualified opinion on the consolidated financial statements

Management’s views:

During the previous year ended 31 March 2015 the Company entered into deeds ofassignment to transfer all the rights title and obligations of its land and buildingsituated at Gandhinagar to another company for a consideration of Rs. 50.52 Crores.Subsequent to previous year end the lender to whom these assets were provided as securityprovided its in-principal approval for the said transfer subject to fulfilment ofconditions stated therein. The said transfer is pending approval from the relevantgovernment authority and transfer of legal title that are considered to be procedural innature. Accordingly the Company had recognised profit on sale of Fixed Assets of Rs. 46.04Crores (net of incidental expenses Rs. 3.39 Crores) during the year ended 31 March 2015.During the year the Company has received approval from the lender for sale of one of theproperty sold for consideration of Rs. 5.89 crores and also realised part consideration ofRs. 3.20 crores from the buyer. Subsequent to the year ended 31 March 2016 approval fromthe requisite authorities have also been received and sale deed has been executed betweenthe Company and the buyer for transfer of legal title for one of the property. The Companyhas applied for requisite approval for the balance properties which are still awaited asof date. Accordingly management believes that the Internal Financial Controls areoperating effectively.

11. Secretarial Auditors and their report

The Board has appointed Dr. S. K. Jain and Co. Practicing Company Secretaries toconduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report forthe financial year ended March 31 2016 is annexed herewith marked as Annexure I to thisReport.

12. Corporate Governance

The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several best corporate governance practices as prevalent globally. The reporton Corporate Governance as stipulated under the SEBI (LODR) Regulations 2016 forms anintegral part of this Report. The certificate required under SEBI (LODR) Regulations 2016from Practicing Company Secretaries confirming compliance with the conditions of corporategovernance is annexed herewith marked as Annexure II.

13. Number of Board meetings

During the F.Y. 2015-16 Eight (8) Board meetings were held. Further detail on the sameis available in Corporate Governance Report which forms part of this Annual Report.

14. Employees’ Stock Option Scheme

Pursuant to the shareholders approval dated April 21 2015 the Nomination andRemuneration Committee of the board of directors of the Company granted stock options asper the terms of ESOP Scheme 2015 approved on April 21 2015 to employees and directors ofthe Company and its subsidiaries. Following is the table giving detailed information withregard to the same.

Total options granting eligibility of the Company (A) 1423323
Options granted as on 31.3.2016 (B) 1004866
Options lapsed as on 31.3.2016 (C) 512397
Options available for grant as on 31.3.2016 (A-B+C) 930854

Vesting has not started for any of the above grants.

15. Vigil Mechanism

The Vigil Mechanism of the Company in terms of the SEBI (LODR) Regulations 2015 isincorporated under whistle blower policy. Protected disclosures can be made by a whistleblower through an e-mail or a letter to the Ethics Officer or to the Chairman of theAudit Committee. The Policy on vigil mechanism and whistle blower policy may be accessedon the Company’s website at the link http://www.agcnetworks.com/home/policies.

16. Extract of Annual Return

Extract off the Annual Return of the Company in Form No. MGT-9 is annexed herewith asAnnexure III of this report.

17. Directors and Key Managerial Personnel

In accordance with the provisions of the Act and Articles of Association of theCompany Dr. (Mrs.) Sujaya Banerjee Non-executive Director of the Company retire byrotation at the ensuing Annual General Meeting and being eligible have offered herself forreappointment.

During the year following appointment/resignation took place in Directors and KeyManagerial Personnel of the Company.

Name Event Designation Date of Event
Mr. Neeraj Gupta Resignation - December 1 2015
Mr. Sanjeev Verma Re-designation Whole Time Director February 15 2016
Mr. Anil Nair Resignation - February 15 2016

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand SEBI (LODR) Regulations 2015. For detailed composition of Board of Directors andvarious Committees kindly refer ‘the report on Corporate Governance forming part ofthis report.

The Company has devised a Policy for performance evaluation of Directors Board andsenior management which include various criteria for performance evaluation of the same.The Company has also devised remuneration policy. These policies are annexed to thisreport as Annexure IV and V respectively.

18. Personnel

The Board places on record its appreciation for the hard work and dedicated efforts putin by all the employees. The relations between the management and employees continue toremain cordial on all fronts.

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 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules are provided in the Annual Report.Disclosures pertaining to remuneration and other details as required under Section 197(12)of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report. Kindly refer AnnexureVI of this report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.

19. Particulars required to be furnished by the Companies (Disclosure of Particulars inthe Report of Board of Directors) Rules 1988

(i) Part A pertaining to conservation of energy is not applicable to the Company.

(ii) Part B pertaining to particulars relating to technology absorption is as perAnnexure VII to this report.

(iii) Part C pertaining to foreign exchange earnings and outgoings is as mentionedbelow.

Expenditure in foreign currency (accrual basis) FY 2015-16 FY 2014-15
Rs. in Crores Rs. in Crores
Training and software support upgrades 5.74 9.88
Maintenance services 8.33 8.74
Travelling expenses 1.29 1.28
Other matters 0.18 0
15.54 19.91
Earnings in foreign currency (accrual basis) Rs. in Crores Rs. in Crores
Sale of goods and services (Including sale from overseas branch and to Export Oriented Units) 7.37 11.03
Interest and commission income 3.27 6.12
10.64 17.15

20. Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board.

The CSR Policy may be accessed on the Company’s website at the link http://www.agcnetworks.com/in/en/corporate-governance.

The Report on CSR activities is annexed herewith marked as Annexure VIII.

21. Risk Management Policy

During the year your Directors have constituted a Risk Management Committee which hasbeen entrusted with the responsibility to assist the Board in (a) Overseeing and approvingthe Company’s enterprise wide risk management framework; and (b) Overseeing that allthe risks that the organization faces such as strategic financial credit marketliquidity security property IT legal regulatory reputational and other risks havebeen identified and assessed and there is an adequate risk management infrastructure inplace capable of addressing those risks. A Risk Management Policy was reviewed andapproved by the Committee.

22. Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions. Most of these areone time purchase/sales transactions except Loans and Advances transactions which arerepayable on demand and maintenance services transactions which are of the duration of 3months to 12 months. Your Directors draw attention of the members to Note 33(Consolidated) and 34 (stand-alone) to the financial statement which sets out relatedparty disclosures.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website at thelink: http://www.agcnetworks.com/home/policies.

23. Directors’ Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of theprofit/(loss) of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern’basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company’s internal financial controls were adequate andeffective during FY 2015-16.

24. Committees of the Company

The details relating to all the Committees constituted by the Company are mentioned inthe ‘Report on Corporate Governance’ which forms a part of the Annual Report.

25. Acknowledgements

The Board is thankful to the Shareholders and the Bankers of the Company for theircontinued support. It also takes this opportunity to express gratitude to its varioussuppliers and its partners for their continued co-operation support and assistance. Aboveall the Board expresses its appreciation to each and every employee for his / hercontribution dedication and sense of commitment to the Company’s objectives.

For and on behalf of the Board of Directors
Sanjeev Verma Sujaya Banerjee
Whole Time Director Director
Mumbai
August 12 2016

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