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Sterling Holiday Financial Services Ltd.

BSE: 500466 Sector: Financials
NSE: N.A. ISIN Code: N.A.
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Sterling Holiday Financial Services Ltd. (STERHOLIDFIN) - Director Report

Company director report

TO SHAREHOLDERS

To the Members

The Directors have great pleasure in presenting their 25th Report along withthe audited financial statement for the financial year ended March 312016.

FINANCIAL RESULTS

The financial results of the Company for the year ended 31st March 2016 aresummarised below:

Particulars Year Ended 31.03.2016 Year Ended 31.03.2015
Profit / (Loss) Before Depreciation & Tax (329439) (1200187)
Less : Depreciation 19800 25227
Profit / (Loss) Before Tax (349239) (1225414)
Profit / (Loss) After Tax (349239) (1225414)

Financial Statements have been prepared in accordance with the prudential normsprescribed by the RBI for Non-Banking Financial Companies.

PERFORMANCEOFTHECOMPANY

During the year the Company has incurred loss of Rs.3.49 Lakhs. The Board of Directorsexpect better performance in its operations in the ensuing financial years.

BUSINESS PROSPECTS

The Company is looking for new business opportunities and is exploring ail possibleavenues to increase its operations and profitability.

DIVIDEND .

Due to non-availability of profits during the financial year your Directors do notrecommend any dividend for thefinancialyear2015-2016.

SHARE CAPITAL

During the year your Company has not made any allotment accordingly there is nochange in the share capital of the Company.

TRANSFER TO RESERVES

The Company has incurred loss and has carried the losses to Profit & Loss Accountand hence no transfer to General Reserve was made during the Year.

FINANCE

Cash and cash equivalent as at March 312016 amounted to Rs.675114/-.

DEPOSITS

The total amount of fixed deposits from public outstanding and unclaimed as at 31s'March 2016 was Rs.877743/-.

(a) Accepted during the year NIL
(b) Remained unpaid or unclaimed as at the end of the year Rs.877743
(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved: No deposits have been accepted by the Company during the year and hence there does not arise any default during the year.
i. As at 1st April 2015 NIL
ii. Maximum during April 2015 to March 2016 NIL
iii. As at 3151 March 2016 NIL
(d) Details of deposits which are not in compliance with the requirements of Chapter V of the Act NIL

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year the Company has not given any loans. The outstanding loans and advanceswhich includes a sum of Rs.216.92 lakhs (Rs.216.92 lakhs) advanced to certain companiesout of which a sum of Rs.117.01 lakhs (Rs. 117.01 lakhs) is to a subsidiary company.

Particulars of investments covered under Section 186 form part of the notes onfinancial statements provided in this Annual Report. The Company has not made freshinvestments during the year.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board has not appointed any directors during the financial year. Neither any of theDirectors has resigned during the financial year.

Re-appointments

As per provisions of the Companies Act 2013 Mr. Ramesh K Shrivastav is liable toretire by rotation at the ensuing Annual General Meeting and being eligible offer himselffor re-appointment. The Board of Directors recommends his re-appointment.

Declaration by Independent Directors

The Company has received declarations from all its Independent Directors that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 in respect ofthe financial year ended March 312016.

BOARD MEETINGS HELD DURING THE FINANCIAL YEAR

The Board of the Company met 6 (Six) times during the lagt financial year on thefollowing dates: 29.05.2015 27.06.201514.08.201503.09.201514.11.2015 and 13.02.2016.The intervening gap between the Meetings was within the period prescribed undertheCompanies Act 2013.

BOARD COMMITTEES

Currently the Board has three committees; the Audit Committee Nomination andRemuneration Committee and Stakeholders' Relationship Committee. The Composition of theCommittees and their meeting dates are given below: .

Name of the Committee Composition Details of Meetings held during the year
Audit Committee Comprises of three Non-Executive and Independent Directors and Managing Director. The Chairman of the Committee is Independent Director Mr.G.Sundaram. Four meetings were held during the year on the following dates:-

• 29"’ May 2015

• 14th August 2015 '

• 14th November 2015

• 13h February 2016

Nomination and Remuneration Committee Comprises of three Non-Executive and Independent Directors and Managing Director. The Chairman of the Committee is Independent Director Mr.K.Purushothaman. Two meetings were held during the year on the following date: •14th August 2015 .

•13"’February 2016

Stakeholders Relationship Committee Comprises of two Non Executive and Independent Directors and two Executive Directors. The Chairman of the Committee is Independent Director Mr. M. Namasivayam. Two meetings were held during the year on following dates:- •14"’August 2015

•13"’ February 2016

Details of recommendations of Audit Committee which were not accepted by the boardalong with reasons

The Audit Committee generally make certain recommendations to the Board of Directors ofthe Company during their meetings held to consider any financial results (Unaudited andAudited) and such other matters placed before the Audit Committee as per the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 fromtime to time. During the year the Board of Directors has considered all therecommendations made by the Audit Committee and has accepted and carried on all therecommendations suggested by the Committee to its satisfaction. Hence there are norecommendations unaccepted by the Board of Directors of the Company during the year underreview.

DETAILS OF POLICIES DEVELOPED BYTHE COMPANY

(i) Nomination and Remuneration Policy

The Company has formulated the Nomination and Remuneration Policy in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended fromtime to time. The objective of this policy is to ensure:

• The level and composition of remuneration is reasonable and sufficient toattract retain and motivate

• directors of the quality required to run the Company successfully;

• Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

• Remuneration to Directors Key Managerial Personnel and Senior Managementinvolves a balance with short and long-term performance objectives appropriate to theworking of the Company and its goals.

This policy is being governed by the Nomination and Remuneration Committee comprisingof three members of the Board all of whom are Non-Executive and Independent Directors.The policy lays down the standards to be followed by the Nomination and RemunerationCommittee with respect to the appointment remuneration and evaluation of Directors andKey Management Personnel.

(ii) Board Diversity

The Company recognizes and values the importance of a diverse board as part of itscorporate governance and success. The Company believes that a truly diverse Board willleverage differences in ideas knowledge thought perspective experience skill setsage ethnicity religion and gender which will go a long way in retaining its competitiveadvantage. The Board has on the recommendation of the Nomination and RemunerationCommittee adopted a Board Diversity Policy which sets out the approach to diversity ofthe Board of Directors.

(iii) Whistle-Blower Policy-Vigil Mechanism

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. To maintain these standards the Company encourages itsemployees who have concerns about suspected misconduct to come forward and express theseconcerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower)mechanism providesa channel to the Employees and Directors to report to the managementconcerns about unethical behavior actual or suspected fraud or violation of the Code ofConduct or Policy. The mechanism provides for adequate safeguards against victimization ofemployees and directors to avail of the mechanism and also provide for direct access tothe Chairman of the Board/Chairman ofthe Audit Committee in exceptional cases.

In line with the statutory requirements the Company has formulated a Whistle BlowerPolicy / Vigil Mechanism which covers malpractices and events which have taken place /suspected to have taken place misuse or abuse of authority fraud or suspected fraudviolation of Company rules manipulations negligence causing danger to public health andsafety misappropriation of monies and other matters or activity on account of which theinterest of the Company is or is likely to be affected and formally reported by whistleblowers concerning its employees.

The Managing Director is responsible for the administration interpretationapplication and review of this policy. The Managing Director is also empowered to bringabout necessary changes to this policy if required at any stage with the concurrence ofthe Audit Committee. The mechanism also provides for access to the Chairman of the AuditCommittee in required circumstances.

EVALUATION OF BOARD COMMITTEE AND DIRECTORS

The evaluation has been done. .

TRAINING AND FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company has conducted familiarization programme during the year.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR.

During the year no company has become or ceased to be the subsidiary joint venture orassociate company. Whereas the detailed report on Subsidiaries and Associate Companies isattached as Annexure -1 in Form AOC-1 and forms part of this report.

AUDITORS Financial Auditors

At the Annual General Meeting held on 27th September 2014 M/s. P.Chandrasekar Chartered Accountants (Firm Registration Number 000580S) CharteredAccountants were appointed as Statutory Auditors of the Company to hold office till theconclusion of the Annual General Meeting to be held in the calendar year 2017. In terms ofthe first proviso to Section 139 of the Companies Act 2013 the matter of appointment ofthe auditors shall be placed for ratification at every Annual General Meeting of theCompany. Accordingly the appointment of M/s. P. Chandrasekar Chartered Accountants (FirmRegistration Number 000580S) as statutory auditors of the Company is placed forratification by the shareholders. In this regard the Company has received a certificatefrom the auditors to the effect that their appointment is ratified by the shareholders itwould be in accordance with the provisions of Section 141.

Explanation to Statutory Auditor's remarks

With reference to the observations made by the Auditors in their report your Directorswish to explain and clarify the position hereunder:

1. In respect of advances aggregating to Rs.216.92 lakhs towards investment in sharesin certain companies including subsidiary company the Company is considering all theproposed investments as long-term investments. In the opinion of the Directors noprovision is therefore considered necessary and wherever possible steps are being takento recoverthe amounts.

2. In respect of investments in quoted and unquoted shares the investments are longterm in nature and

hence valued at cost. Hence no provision for diminution in value is considerednecessary. _

3. The Company has initiated legal action for recovery of its dues and is confident ofrecovery. Hence provisioning has not been considered necessary to the extent required asper RBI guidelines.

4. The observation on non provisioning of interest on deposits is self explanatory.

5. In view of the current financial position of M/s. Thomas Cook (India) Limited andits plan to refurbishing the existing resorts and completion of new resorts your Companyis confident in realizing the amount invested in Sterling Happy Vista Timeshare unitsallotted by them in settlement of Hire Purchase facilities extended to them.

6. The Company is planning to revive the business and is taking steps to improve itsprofitability in the ensuing years.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. S. Dhanapal & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report for thefinancial year 2015-2016 is annexed herewith as marked as Annexure - 2 andforms part of this report.

Explanation to Secretarial Auditors' Remarks

The Company does not have any operations and hence has not appointed a CompanySecretary and Internal Auditor. Once the operational performance of the Company improvesit will appoint Company Secretary and Internal Auditor.

Formal evaluation of Board by Independent Director and training programme forIndependent Directors were organised by the Company.

PARTICULARS OF EMPLOYEES AND REMUNERATION

Details as required under Section 197 of the Companies Act 2013 read with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

(i) Details of the employees employed throughout the year and drawing remunerationwhich in the aggregate was Rupees One Crore and Two Lakhs or more per annum during thefinancial year.

During the year no employees were in receipt of remuneration exceeding Rupees OneCrore and Two Lakhs in aggregate per annum.

(ii) None of the employees employed for a part of the financial year was in receipt ofremuneration for any part of that year which in the aggregate exceeds Rupees Eight Lakhsand Fifty Thousand per month during the financial year.

(iii) None of the employees except Managing Director hold by himself or along withhis/her spouse and dependent children more than two per cent of the equity shares of theCompany.

Details required as per Section 197 and Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

Name of Director / KMP Amount of Remuneration Per Annum Ratio of Remuneration to Median Remuneration of Employees for the FY % increase in Remuneration during the FY
NIL

Number of permanent employees on the rolls of the Company as on 31.03.2016

The number of permanent employees on the rolls of the Company as on 31stMarch 2016 stood at 2 employees.

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration

There was no increment found in salaries of the employees in your Company during thefinancial year.

Percentage increase in the median remuneration of employees in the financial year

During the year none of the employees vyere in receipt of remuneration.

Details of pecuniary relationship or transactions of the non-executive directorsvis-a-vis the Company

Directors are not getting any sitting fee till now and they do not have any pecuniaryrelationship or transactions with the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company does not have any operations during the year and hence this may not beapplicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company does not have any female employee and hence this may not be applicable tothe Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the year there are no significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and Company's operations infuture.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED SINCE 31.03.2016 TILL THE DATE OF THIS REPORT

There are no material changes and commitments affecting the financial position of theCompany which has occurred since 31.03.2016 till the date of this report.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return in form MGT-9 is annexed herewith as marked as Annexure- 3 and forms part of this report.

RELATED PARTY TRANSACTIONS

As required under Provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has developed a policy on dealing with Related PartyTransactions. The details of Related Party TransactionsareprovidedintheNotestotheAccounts.

CORPORATE GOVERNANCE

Not applicable to the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The details on conservation of energy technology absorption foreign exchange earningsand outgo is annexed herewith as marked as Annexure -4 and forms part of thisreport.

DIRECTOR'S RESPONSIBILITY STATEMENT '

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that: ‘

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed.

ii. The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.

iii. The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The directors have prepared the annual accounts on a going concern basis.

v. The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

vi. The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

DEPOSITORY SYSTEM

As the members are aware your Company's shares are in physical form and the Companydoes not have connectivity with both the Depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). Once the operationsare improved the Company will establish connectivity and make the shares available inelectronic form. . '

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theEmployees Bankers and other Central and State Government Agencies for the continuedsupport given by them to the Company and their confidence reposed in the management. TheDirectors appreciate and value the contributions made by every member of the Company.

For and On behalf of the Board of Directors
Chennai K. CHANDRASEKARAN K. PURUSHOTHAMAN
3rd September 2016 Managing Director Director