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S I Capital & Financial Services Ltd.

BSE: 530907 Sector: Financials
NSE: N.A. ISIN Code: INE417F01017
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S I Capital & Financial Services Ltd. (SICAPFIN) - Director Report

Company director report

MANAGEMENT DISCUSSION AND ANALYSIS

To the Members

Your Directors have pleasure in submitting their 22nd Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2016.

1. FINANCIAL RESULTS:

The Company's financial performance for the year under review along with previousyear's figures are given hereunder :

Particulars For the year ended 31st March 2016 For the year ended 31st March 2015
(Amount in Lakhs) (Amount in Lakhs)
Net Sales /Income from Business Operations 7.16 6.38
Other Income 16.25 23.38
Total Income 23.41 29.76
Less Interest - -
Profit before Depreciation (31.05) 2.51
Less Depreciation 2.08 3.25
Profit after depreciation and interest (33.13) (0.74)
Less Current Income Tax - -
Less Previous year adjustment of Income Tax - -
Less Deferred Tax 0.19 0.07
Less Exceptional Items 9.47 -
Net Profit after Tax (42.79) (0.81)
Dividend (including Interim if any and final) - -
Net Profit after dividend and Tax (42.79) (0.81)
Amount transfered to General Reserve - -
Balance carried to Balance Sheet (42.79) (0.81)
Earning per share (Basic) (143) (0.03)
Earning per Share(Diluted) (143) (0.03)

2. DIVIDEND:

Board does not recommend any dividend.

3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

The Company is mainly dealing with Foreign Exchange Transactions.

Due to heavy competitions in forex market margins in foreign exchange transactionshave been reduced and the Company is taking all possible efforts to perform better andalso been very careful and selective when doing sales as credibility factor is moreimportant.

The Company is in the process of revoking the suspension of trade in BSE. Aftercompletion of this process better business opportunities are expected.

The Directors are very keen to convert the idle assets like the property at Cochin tocash to improve the liquidity and to carry on the core business of the company. TheCompany is taking all possible efforts to improve the performance and achieve betterresults in future years.

Sale of property at Ernakulam: In the year 2014 a special resolution was passed toeffect the sale of the property mentioned above. Sale is delayed as we are in the processof getting the survey report and due efforts are taken to get the survey report from thelocal authorities. So far prospective buyers are coming closer to get this property andthe sale will be executed at once on getting this report.

5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateon the date of this report.

There are no significant and material orders passed by Regulators / Court / Tribunalsimpacting the going concern status and company's operation in future.

6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(m) of the Companies Act 2013 do not apply to ourCompany. There was no Foreign Exchange Inflow and Outflow during the year under review.

7. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY

The Company is facing heavy competition in the market due to the influence ofunexpected exchange rate fluctuations leading to average and poor returns. Adequatemeasures are taken to minimize risks and maximize returns.

8. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

There are no transactions that need to be given in AOC 2. hence Form AOC-2 is notprovided. Information on related party policy is given in Annexure 4 attached to thisreport.

11. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND SECRETARIAL AUDITOR IN THEIR REPORTS

There are no qualifications reservations or adverse remarks made by the StatutoryAuditors and Secretarial Auditors in their report except the below observations.

Comments to Secretarial Auditor's Qualifications/ Observations Reply to the observation1 (1)

Our Company is in the process of revocation of the suspension of trading of shareslisted with Bombay Stock Exchange. This process is at the verge of getting approval fromthe Bombay Stock Exchange and other regulatory bodies.

Reply to the observation 1 (2)

Board has taken necessary steps to comply with the Regulation 13 as pointed out in theSecretarial Audit Report.

12. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES

The provisions of Section 178(1) of the Companies Act 2013 relating to constitutionof Nomination and Remuneration Committee are in place. The Company's Policy relating toappointment of Directors payment of Managerial remuneration Directors' qualificationspositive attributes independence of Directors and other related matters as provided underSection 178(3) of the Companies Act 2013 is furnished in Annexure 5 5A & 5B andis attached to this report.

The Board has made a formal evaluation of its own performance committees of the Boardand Independent Directors as per the above policy and is satisfactory over itsperformance.

13. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure2 and is attached to this Report.

14. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Board met eight times during the financial year the details of which are given inthe Corporate Governance Report attached as Annexure 3 to this Report.

15. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.

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

16. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any associates subsidiary and joint ventures.

17. DEPOSITS

The Company has neither accepted nor renewed any deposits during the Financial year.

18. DIRECTORS

CHANGES IN THE BOARD:

There were no change in the constitution of Board Of Director

• Audit Committee was re-constituted on 18th September 2014 with the followingdirectors as its members.

NAME OF THE MEMBER STATUS IN COMMITTEE NATURE OF DIRECTORSHIP
Mr. RanjithMathan Chairman Non-Executive & Independent
Mr. K. Sethuraman Member Non-Executive & Independent
Mr. Vettath Abraham Kurien Member Non - Executive

• Nomination and Remuneration Committee was constituted on 18th September 2014with the following directors as its members:

NAME OF THE MEMBER STATUS IN COMMITTEE NATURE OF DIRECTORSHIP
Mr. K. Sethuraman Chairman Non-Executive & Independent
Mr.RanjithMathan Member Non-Executive & Independent
Ms. Mary Rodrigues Member Executive
Mr. SanjayArjundasWadhwa Member Non - Executive

• Shareholders Committee was renamed as Stakeholders Relationship Committee on18th September 2014 and was re-constituted with the following directors as its members:

NAME OF THE MEMBER STATUS IN COMMITTEE NATURE OF DIRECTORSHIP
Mr. K. Sethuraman Chairman Non-Executive & Independent
Ms. Mary Rodrigues Member Executive
Mr. Vettath Abraham Kurian Member Non - Executive

• The Risk Management Committee was constituted on 28th May 2015 with thefollowing members

NAME OF THE MEMBER STATUS IN COMMITTEE NATURE OF DIRECTORSHIP
Mr. K. Sethuraman Chairman Non-Executive & Independent
Mr.RanjithMathan Member Non-Executive & Independent

• The Independent Directors Committee was constituted with Mr. K. Sethuraman andMr. Ranjith Kurian Matthan as its members.

• Mr. Sanjay Arjundas Wadhwa retires at this Annual General Meeting and beingeligible offered himself for re-election.

• The Board and Committee members details as on 31st March 2016 is given in thecover page of this Report.

19. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

20. STATUTORY AUDITOR

Mr. A.M. THOMAS Chartered Accountant Membership No. 22119 0/60 Cheran Street ParriNagar Ashok Nagar Chennai 600 083 was appointed as Statutory Auditor of your Company inthe 21st Annual General Meeting held on 28th September 2015 for aterm of 5 years i.e from the conclusion of 21st AGM until the conclusion of 26thAGM. However as per Section 139 of the Companies Act 2013 the appointment of auditorshas to be ratified by the members at every Annual General Meeting.

The Company has received a letter from the auditors confirming that they are eligiblefor reappointment as auditors of the Company under Section 139 of Companies Act 2013 andmeet the criteria for appointment specified in Section 141 of the Companies Act. 2013.

Board recommends the ratification of appointment of Mr. A.M. THOMAS CharteredAccountant Membership No. 22119 0/60 Cheran Street Parri Nagar Ashok Nagar Chennai600 083 as the statutory auditors of the Company for the financial year 2016-17.

21. RISK MANAGEMENT POLICY

The Statement showing the details regarding the development and implementation of RiskManagement Policy of the Company is available in Company website www.sicapital.co.in. Therisk management includes identifying types of risks and its assessment risk handling andmonitoring and reporting.

At present the Company has not identified any element of risk which may threaten theexistence of the company.

22. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The provisions of Section 177 of the Companies Act 2013 read with Rule 6 and 7 of theCompanies (Meetings of the Board and its Powers) Rules 2013 The Audit Committee consistsof the following members:

NAME OF THE MEMBER STATUS IN COMMITTEE NATURE OF DIRECTORSHIP
Mr. RanjithMathan Chairman Non-Executive & Independent
Mr. K. Sethuraman Member Non-Executive & Independent
Mr. Vettath Abraham Kurien Member Non - Executive

The Audit Committee consists of independent Directors viz. Mr. Ranjith Matthan and MrK. Sethuraman who forms the majority.

The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company. Nopersonnel has been denied access to the audit committee for reporting any of their genuineconcerns.

Audit Committee is responsible to handle risks and to implement the policyappropriately and to report the Board regarding the plans and procedures implemented tomitigate risks.

Internal Control systems and adequacy: The Company's internal control system isproperly placed and strengthened taking into account the nature of business and size ofoperations. Internal auditors are conducting periodic audits and bring out any deviationsin internal audit procedures and their observations are periodically reviewed andcompliance is ensured. The audit committee is properly reviewing and monitoring thisinternal audit process.

23. SECRETARIAL AUDIT

The Company has appointed M/s. V.SRINIVASAN B.Com ACS CPNO. 14150. No.5/3 GroundFloor Sastri 2nd Cross Street Cauvery Nagar Near Aranganathan Subway Saidapet Chennai- 600 015 Practicing Company Secretary as secretarial auditors to conduct the audit forthe year 2015-16 and their report is annexed herewith as Annexure 1.

24. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is annexed herewith as Annexure 6.

25. CORPORATE GOVERNANCE

Your Company affirms its commitment to good corporate governance policies andpractices. Pursuant to Clause 72 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Report on Corporate Governance which forms a part ofthis Report and is annexed as Annexure 3 to this Report.

26. SHARES

A. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year.

B. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year.

C. BONUS SHARES

No Bonus Shares were issued during the year.

D. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

27. SEXUAL HARASSMENT

Disclosure as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. During theFinancial Year 2015-16 the Company has not received any complaints.

28. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/- Sd/-
Mary Rodrigues Ranjith Matthan
Managing Director Director
DIN: 01778843 din : 00968445
Date : 27.07.2016
Place : Chennai