Your Directors are pleased to present the Twenty Third Annual Report of the Companycovering the operating and financial performance together with the Audited FinancialStatements and the Auditors' Report thereon for the Financial Year ended on March 312017.
FINANCIAL SUMMARY :
The financial highlights of the Company during the period ended March 31 2017 are asbelow:
|Particulars ||Financial Year ||Financial Year |
| ||2016-17 ||2015-16 |
|Revenue from operations (Gross) ||15042613 ||26002637 |
|Less: Excise duty ||0.00 ||0.00 |
|Revenue from operations (Net) ||15042613 ||26002637 |
|Other income ||8348942 ||8447211 |
|Total Revenue ||23391555 ||34449848 |
|Less : Expenses || || |
|(a) Cost of materials consumed ||14358975 ||25137314 |
|(b) Purchases of stock-in-trade ||Nil ||Nil |
|(c) Changes in inventories of FG WIP & Stock-in-Trade ||Nil ||Nil |
|(d) Employee benefits expense ||1402909 ||993095 |
|(e) Finance costs ||3067 ||3718 |
|(f) Depreciation expense ||-- ||17783 |
|(g) Other expenses ||5802482 ||5715351 |
|Total Expenses ||21567433 ||31867261 |
|Profit/ (Loss) before tax ||1824122 ||2582587 |
|Less: Tax expense: || || |
|(a) Current tax expense ||600000 ||802105 |
|(b) Deferred tax ||-- ||-202 |
|(c) Prior Period Adjustment ||Nil ||Nil |
|Profit / (Loss) for the year ||1224122 ||1780684 |
|Earnings per share (face value Rs.10/-) Basic & Diluted ||0.12 ||0.17 |
The Company's total revenue from operations during the financial year ended 31st March2017 were Rs. 233.91 Lacs as against Rs.344.50 Lacs of the previous year representingdecrease of approximately about 32.10 % over the corresponding period of the previous yearwith total expenses of Rs.215.67 lacs (previous year of Rs. 318.67 lacs). The Company hasmade Net Profit of Rs. 12.24 Lacs as against Rs. 17.81 Lacs of the previous year afterconsidering Depreciation and Provision for Tax and other adjustments representing adecrease of approximately about 31.27 % over the corresponding period of the previousyear.
The EPS of the Company for the year 2016-17 is Rs. 0.12.
No dividend has been recommended in respect of the financial year ended 31st March2017 and the entire surplus be ploughed back to the business to meet the needs foradditional finance for capital expenditure.
During the year under review there is no change in the paid up share capital of theCompany. Further the paid up share capital of the Company as on March 31 2017 is Rs.104009000.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY ANDCHANGE IN NATURE OF THE BUSINESS:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this Directors' Report.
There is no change in the nature of business of the Company during the year underreview.
LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 toBSE where the Company's Shares are listed.
During the year under review the Company has neither invited nor accepted any depositsfrom the public under Section 76 and Chapter V of the Companies Act 2013 and rules madethere under.
SUBSIDIARY JOINT VENTURE (JV) AND ASSOCIATES COMPANIES
During the year under review the Company does not have any Subsidiary Joint Venture(JV) or Associates Company.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELS
Mr. Shetal Shah Chairman and Managing Director of the Company. A brief resume of Mr.Shetal Shah being the Director retiring by rotation and seekingappointment/re-appointment at the ensuing Annual General Meeting is given in the sectionon "Report on Corporate Governance" forming part of this Annual Report. Mr.Shetal Shah is a Key Managerial Personnel of the Company in terms of Section 203(1) of theCompanies Act 2013.
Mr. Satish Shah Chief Financial Officer of the Company A brief resume of Mr. SatishShah is given in the section on "Report on Corporate Governance" forming part ofthis Annual Report. Mr. Satish Shah is a Key Managerial Personnel of the Company in termsof Section 203(1) of the Companies Act 2013.
Mr. Vishal Shah holds office as an Non-Executive Director and Non Independent Directorof the Company retire by rotation at the conclusion of this Annual General Meeting andbeing eligible offer himself for re-appointment. A brief resume of Mr. Vishal Shah isgiven in the section on "Report on Corporate Governance" forming part of thisAnnual Report.
Mr. Vijay Shah holds office as an Non-Executive and Independent Director of theCompany and is eligible for appointment as a Director who is not liable for retirement byrotation for a period of 5 years. A brief resume of Mr. Vijay Shah is given in the sectionon "Report on Corporate Governance" forming part of this Annual Report.
Mrs. Lilaben Ageja holds office as an Non-Executive and Independent Director of theCompany and is eligible for appointment as a Director who is not liable for retirement byrotation for a period of 5 years. A brief resume of Mrs.Lilaben Ageja is given in thesection on "Report on Corporate Governance" forming part of this Annual Report.
Mr. Shetal Shah Chairman and Managing Director and Mr. Satish Shah Chief FinancialOfficer and Mr. Parag Patel Company Secretary & Compliance Officer of the Company arethe Key Managerial Personnel in terms of Section 203(1) of the Companies Act 2013.
As on date of this Report the Board of Directors of the Company comprised of FourDirectors one of whom is the Chairman & Managing Director. The remaining ThreeDirectors comprises of one who is a Additional Non-Executive and Non-Independent DirectorTwo Director Non-Executive and Independent Directors (including one Additional Director)and One Non-Executive and Independent Directors.
DECLARATIONS OF INDEPENDENT DIRECTORS
The Company has received declaration pursuant to Section 149(7) of the Companies Act2013 from each of its Non-Executive and Independent Directors to the effect that they meetthe criteria of independence as provided in Section 149(6) of the Companies Act 2013Regulation 16(1)(b) and Regulation 25 of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred as "Listing Regulations").These declarations have been placed before and noted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors state that:
(a) In the preparation of the annual accounts for the financial year ended on March 312016 the applicable accounting standards had been followed along with proper explanationrelating to material departures; (b) They have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year March 31 2016 and of the profit and loss of the Company for thatperiod;
(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; (d) They have prepared the annual accounts on a going concern basis; (e)They have laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and (f) Theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
NUMBER OF MEETINGS OF THE BOARD
During the year under review Regular Board Meetings are held once in a quarterinter-alia to review the quarterly results of the Company. During the year under review 4(Four) Board Meetings were convened and held on 27.05.2016 12.08.2016 14.11.2016 and10.02.2017. The intervening gap between the two meetings was within the period prescribedunder the Companies Act 2013. The details of the meetings of the Board of Directors aregiven in the section on "Report on Corporate Governance" forming part of thisAnnual Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has formed Nomination and Remuneration Committee which has framedNomination and Remuneration Policy. The Committee reviews and recommend to the Board ofDirectors about remuneration for Directors and Key Managerial Personnel and other employeeup to one level below of Key Managerial Personnel. The Company does not pay anyremuneration to the Non-Executive Directors of the Company other than sitting fee forattending the Meetings of the Board of Directors and Committees of the Board. Remunerationto Executive Directors is governed under the relevant provisions of the Act and approvals.
The Company has devised the Nomination and Remuneration Policy for the appointmentre-appointment and remuneration of Directors Key Managerial. All the appointmentre-appointment and remuneration of Directors and Key Managerial Personnel are as per theNomination and Remuneration Policy of the Company.
CODE OF CONDUCT
For Board of Directors and Senior Management Group. The Board of Directors of theCompany has laid down a code of conduct for all the Board Members and Senior ManagementGroup of the Company. The main object of the Code is to set a benchmark for the Company'scommitment to values and ethical business conduct and practices. Its purpose is to conductthe business of the Company in accordance with its value systems fair and ethicalpractices applicable laws rules and regulations. Further the Code provides for thehighest standard of professional integrity while discharging the duties and to promote anddemonstrate professionalism in the Company.
All the Board Members and Senior Management Group of the Company have affirmedcompliance with the code of conduct for the financial year ended on March 31 2017 asrequired by Regulation 26(3) of the Listing Regulations. A declaration signed by theChairman & Managing Director to this effect is attached as a part of this AnnualReport. The code of conduct is also available on the website of the Companywww.sawacabusiness.com
For Prevention of Insider Trading :
The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015 came into effect from May 15 2015 to put in place a framework forprohibition of insider trading in securities and to strengthen the legal frameworkthereof. Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 the Company has formulated and adopted the Code ofPractices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information("Code of Fair Disclosure") of the Company. The Code of Fair Disclosure isavailable on the website of the Company www.sawacabusiness.com Further pursuant toRegulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015 the Company has formulated and adopted the Code of Conduct forPrevention of Insider Trading. The Code lays down guidelines and procedures to be followedand disclosures to be made while dealing with the shares of the Company and cautioningthem on the consequence of non-compliances. The Company Secretary has been appointed as aCompliance Officer and is responsible for monitoring adherence to the Code. The code ofconduct to regulate monitor and report trading by insiders is also available on thewebsite of the Company www.sawacabusiness.com
The Company has established a vigil mechanism and accordingly framed a Whistle BlowerPolicy. The policy enables the employees to report to the management instances ofunethical behavior actual or suspected fraud or violation of Company's Code of Conduct.Further the mechanism adopted by the Company encourages the Whistle Blower to reportgenuine concerns or grievances and provide for adequate safe guards against victimizationof Whistle Blower who avails of such mechanism and also provides for direct access to theChairman of the Audit Committee in exceptional cases. The functioning of vigil mechanismis reviewed by the Audit Committee from time to time. None of the Whistle blowers has beendenied access to the Audit Committee of the Board. The Whistle Blower Policy of theCompany is available on the website of the Company www.sawacabusiness.com.
Pursuant to the provisions of Sections 178(2) of the Companies Act 2013 and Regulation17(10) of the Listing Regulations the Nomination and Remuneration Committee / Board hascarried out evaluation of the performance of the Board its Committees and individualDirectors. A structured evaluation feedback form was prepared after taking intoconsideration the inputs received from the Directors covering various aspects such asboard composition flow of board process information and functioning establishment anddetermination of responsibilities of Committees and quality of relationship between theBoard and the management. The performance of Individual Directors and the Board Chairmanwas also carried out in terms of attendance contribution at the meetings circulation ofsufficient documents to the Directors timely availability of the agenda etc. Furtherpursuant to Schedule IV of the Companies Act 2013 the performance evaluation of theIndependent Directors was carried out by the entire Board of Directors of the Companyexcept the one being evaluated.
PERFORMANCE EVALUATION :
The performance evaluation of the Independent Directors was completed. During thefinancial year under review the Independent Directors met on 27th March 2017 inter-aliato discuss:
Performance evaluation of Non Independent Directors and Board of Directors as awhole;
Performance evaluation of the Chairman of the Company;
Evaluation of the quality of flow of information between the Management andBoard for effective performance by the Board.
The Board of Directors expressed their satisfaction with the evaluation process.
COMMITTEES OF THE BOARD OF DIRECTORS
Your Company has several Committees which have been established as part of the bestCorporate Governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.
The Company has following Committees of the Board of Directors:
Stakeholder's Grievances and Relationship Committee
Nomination and Remuneration Committee
The details with respect to the compositions powers terms of reference and otherinformation of relevant committees are given in details in the Corporate Governance Reportwhich forms part of this Annual Report.
RISK MANAGEMENT POLICY
The Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing/ mitigating the same.
The Company has framed a formal Risk Management Framework for risk assessment and riskminimization which is periodically reviewed to ensure smooth operation and effectivemanagement control. The Audit Committee also reviews the adequacy of the risk managementframework of the Company the key risks associated with the business and measure and stepsin place to minimize the same.
POLICY FOR PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
Your Directors state that during the year under review there were no complaintsreported under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
None of the Directors of the Company is disqualified for being appointed as Director asspecified in Section 164(2) of the Companies Act 2013.
Pursuant to Section 139 and other applicable provisions of the Companies Act 2013 andrules made thereunder M/s. M A A K & Associates(Firm Registration Number: 135024W)Statutory Auditors Chartered Accountants Ahmedabad were appointed as a StatutoryAuditors of the Company at the Twenty one Annual General Meeting held on September 302015 for five years i.e. Financial Year 2015-16 to Financial Year 2019-2020 fromconclusion of Twenty one Annual General Meeting till the conclusion of Twenty six AnnualGeneral Meeting subject to ratification at every Annual General
Meeting. Accordingly the members are requested to ratify the appointment of M/s. M A AK & Associates Chartered Accountants Ahmedabad (Firm Registration Number: 135024W)as Statutory Auditors for the financial year March 31 2018.
The eligibility certificate pursuant to Section 141 of the Companies Act 2013 and therules made there under is also received from the Statutory Auditors of the Company.
The Standalone Auditors' Report for the financial year ended on March 31 2017 havebeen provided in "Financial Statements" forming part of this Annual Report.
M/s. Vineet Shah & Associates Chartered Accountants Ahmedabad has been appointedas Internal Auditors of the Company. Internal Auditors are appointed by the Board ofDirectors of the Company on a yearly basis based on the recommendation of the AuditCommittee. The Internal Auditor reports their findings on the Internal Audit of theCompany to the Audit Committee on a quarterly basis. The scope of internal audit isapproved by the Audit Committee.
Pursuant to Section 204 of the Companies Act 2013 and rules made there under theCompany has appointed M/s. Mukesh H. Shah & Co. Company Secretaries as SecretarialAuditor of the Company for the financial year ended on March 31 2017. The SecretarialAudit Report for the financial year ended on March 31 2017 is attached as Annexure I to the Directors' Report and forming part of this Annual Report.
DIRECTORS' RESPONSE ON AUDITORS' QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMER MADE
1. There is a no qualification of Disclaimer of Opinion in the Auditor's Report on theFinancial Statements to the shareholders of the Company made by the Statutory Auditors intheir Auditors Report however they have given emphasis on matter on balance confirmationof certain parties..
Board's Reply: The Company would like to inform that certain accounts of theparties were in reconciliation with them and confirmation statements waited on that time.It does not have any effect on the financials of the company.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Companies Act 2013 and rules made there under theextract of the Annual Return in the prescribed Form MGT 9 is attached as Annexure II to the Directors' Report and forming part of this Annual report.
CORPORATE GOVERNANCE REPORT:
Pursuant to the Regulation 34(3) read with Schedule V Part C of the ListingRegulations a "Report on Corporate Governance" is given separately formingpart of this Annual Report. Pursuant to Regulation 34(3) read with Schedule V Part E ofthe Listing Regulations the Certificate from M/s. M A A K & Associates CharteredAccountants Ahmedabad confirming compliance with the conditions of Corporate Governanceis annexed to the Corporate Governance Report forming part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to the Regulation 34(2)(e) read with Schedule V Part B of the ListingRegulations "Management Discussion & Analysis" is given separately formingpart of this Annual Report.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENT
Pursuant to Section 186 of the Companies Ac 2013 and the rules made thereunderparticulars of loans given investments made or guarantee given or security provided havebeen provided in "Financial Statements" forming part of this Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provision of Section 188 of the Companies Act 2013 and Rule 8(2) ofthe Companies (Accounts) Rules 2014 particulars of contracts or arrangements withrelated parties falling within the scope of Section 188(1) of the Companies Act 2013given in prescribed Form AOC-2 is attached as Annexure III to the Directors' Reportand forming part of this Annual Report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has laid down the set of standards processes and structure which enablesto implement internal financial control across the Organization and ensure that the sameare adequate and operating effectively. To maintain the objectivity and independence ofInternal Audit the Internal Auditor reports to the Chairman of the Audit Committee of theBoard.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with the operating systems accountingprocedures and policies of the Company. Based on the report of
Internal Auditor the process owners undertake the corrective action in theirrespective areas and thereby strengthen the Control. Significant audit observation andcorrective actions thereon are presented to the Audit Committee of the Board.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are as follows:
Remuneration Ratio of Directors/ KMP/ Employees:
|Name ||Designation ||Remuneration Paid ||Increase in remuneration from previous year ||Ratio per Median of Employee Remuneration |
| || ||FY 2016-17 ||FY 2015-16 || || |
| || ||(Rs.) ||(Rs.) ||(Rs.) ||(Rs.) |
|Shetal Shah ||CMD ||240000 ||240000 ||Nil ||2.85 |
|Satish Shah ||CFO ||480000 ||240000 ||240000 ||5.71 |
|Parag Patel ||CS ||184000 ||24000 ||40000 p.a. ||2.19 |
The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are as follows:
|Employed throughout the year ||: 09 (Nine) |
|Employed for part of the year ||: 00 (One) |
The number of permanent employees on the rolls of Company as on 31 March 2017: 09(Nine)
The remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
In view of the nature of activities which are being carried on by the Company theparticulars as prescribed under Section 134(3) (m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 the Conservation of Energy Technology Absorptionand Research and Development are not applicable to the Company.
During the Year Company used foreign exchange and earned foreign exchange amounting isNIL.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS
During the year under review there were no significant and/or material orders passedby any Court or Regulator or Tribunal which may impact the going concern status or theCompany's operations in future.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations read with notificationSEBI/LAD-NRO/GN/2015-16/27 dated December 22 2015 the Business Responsibility Report isto be given only by top 500 listed companies based on market capitalization therefore thesame is not applicable to the Company as on March 31 2017.
The Board of Directors greatly appreciates the commitment and dedication of employeesat all levels who have contributed to the growth and success of the Company. We also thankall our clients vendors investors bankers and other business associates for theircontinued support and encouragement during the year.
We also thank the Government of India Government of Gujarat Ministry of Commerce andIndustry Ministry of Finance Customs and Excise Departments Income Tax Department andall other Government Agencies for their support during the year and look forward to theircontinued support in future.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
|SHETAL SHAH ||VISHAL SHAH |
|MANANGING DIRECTOR ||DIRECTOR |
|(DIN: 02148909) ||(DIN: 02148899) |
|PLACE : AHMEDABAD || |
|DATE : 31.08.2017 || |