Your Directors have pleasure in submitting their 13 Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31 March 2019.
The Group's financial performances for the year under review along with previous year'sfigures are given hereunder: ( Rs. in Million)
| || |
|Particulars || || || || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||2950.27 ||3377.92 ||32479.32 ||22623.82 |
|Other Income ||729.89 ||469.58 ||1820.44 ||600.98 |
|Total Revenue ||3680.16 ||3847.50 ||37299.76 ||2322480 |
|Profit Before Taxation ||935.55 ||1046.11 ||(2406.22) ||(2972.22) |
|Tax Expense ||370.11 ||368.71 ||607.00 ||407.51 |
|Profit/(Loss) for the period after tax and minority interest ||565.44 ||677.40 ||(2452.73) ||(3290.37) |
|Other comprehensive income ||0.37 ||(0.01) ||(1.44) ||1.37 |
|Total comprehensive income (after tax) ||565.81 ||677.39 ||(2454.17) ||(3289.00) |
Based on the Company's performance the Directors are pleased to recommend for approvalof the members a final dividend @ 3% i.e. Rs. 0.30 (Thirty Paise) per equity sharesof Rs. 10/- for Financial year 2018-19 taking the total Dividend @ 5% i.e. Rs. 0.50 (Fifty paise) per Equity Share of Rs. 10/- each (including interimdividend @ 2% i.e. Rs. 0.20 per equity share of Rs. 10/- each already declaredby Board of Directors of the Company on 14 November 2018) to shareholders of the Company.If the dividend as recommended above is declared by the Members at the Annual GeneralMeeting (AGM') the total outflow towards dividend on Equity Shares for the yearwould be ` 17.61 crores (excluding dividend tax).
DIVIDEND DISTRIBUTION POLICY
Securities and Exchange Board of India (SEBI') by its notification dated 8 July2016 has amended the SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 (Listing Regulations') introducingnew Regulation 43A mandating the top 500 listed entities based on market capitalizationcalculated as on 31 March of every financial year to formulate a Dividend DistributionPolicy and disclose the same in their Annual Reports and on their websites.
Accordingly the Board of the Company has adopted a Dividend Distribution Policy whichis available on the website of the
Company does not propose to carry any amount to any Reserve Account.
The paid up Equity Share Capital as at 31 March 2019 is ` 3522252160/-. During theyear under review the Company has not issued shares with differential voting rights norhas granted any stock options or sweat equity. The Company has no scheme of provision ofmoney for purchase of its own shares by employees or by trustees for the benefit ofemployees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures)Rules 2014 are not required to be disclosed.
(i) The Company has issued on private placement and allotted Listed Non-convertibleDebentures (NCDs) of face value of Rs. 1000000/- (Rupees Ten Lakh) each aggregating `170 crore during the financial year 2018-19. The funds raised through issuance of NCDshave been utilised for refinancing of debt and long-term working capital/sub-debtinvestment in Subsidiaries/step-down Subsidiaries and repayment of debt taken from SadbhavEngineering Limited (Holding Company) to the extent of ` 55 Crores.
(ii)The Company has issued on private placement and allotted Unlisted Non-convertibleDebentures (NCDs) of face value of ` 1000000/- (Rupees Ten Lakh) each aggregating ` 190crore during the financial year 2018-19. The funds raised through issuance of NCDs havebeen utilised for refinancing of debt and long-term working capital/sub-debt investment in
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year Company reported at standalone level the Revenue from Operationsamounting to ` 2950.27 million as against ` 3377.92 million in the previous year. TheNet Profit reported for the year was ` 565.44 million against ` 677.40 million as perprevious year which resulted cash profit of ` 844.47 million against ` 794.74 million inprevious year. The Consolidated Revenue from Operations increased to ` 32479.32 millionas against ` 22623.82 million in the previous year. Your Company has achievedconsolidated total income from tolling business for amount of ` 11828.36 million asagainst ` 10726.45 million in the previous year and generated a cash profits of `2004.42 million as against ` 3068.03 million in the previous year.
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A separate section on corporate governance under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 along with thecertificate from the Practicing Company Secretary confirming the compliance is annexedand forms part of this Annual Report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There are no material changes in the nature of business during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitment if any affecting the financial position ofthe company occurred between the ends of
the financial year to which this financial statements relate and the date of thereport.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
Risk management comprises all the organizational rules and actions for earlyidentification of risks in the course of doing business and the management of such risks.
Although not mandatory as a measure of good governance the Company has constituted aRisk Management Committee of the Board. The Committee reviews the Company's performanceagainst identified risks formulates strategies towards identifying new and emergent risksthat may materially affect the Company's overall risk exposure and reviews the RiskManagement Policy and structure.
This robust Risk Management framework seeks to create transparency minimize adverseimpact on business objectives and enhance the Company's competitive advantage.
The Company has adopted a Risk Management Policy pursuant to Section 134 of the Act.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.
The Company has appropriate internal control systems for business processes with regardto its operations financial reporting and compliance with applicable laws andregulations. It has documented policies and procedures covering financial and operatingfunctions and processes. These policies and procedures are updated from time to time andcompliance is monitored by the internal audit function as per the audit plan. The Companycontinues its efforts to align all its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Board's
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i) Changes in Directors and Key Managerial Personnel
Pursuant to Section 152 of the Companies Act 2013 Mr. Nitin R. Patel (DIN: 00466330)Director of the Company retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting.
There were no other changes in Key Managerial Personnel during the year.
ii) Declaration by an Independent Director(s)
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board they fulfill theconditions of independence as specified in the Act and the Rules made there under and areindependent of the management.
iii)Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company. Boardcomposition analysis reflects in-depth understanding of the Company including itsstrategies environment operations financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Boardon a periodic basis including each time a Director's appointment or re-appointment isrequired. The Committee is also responsible for reviewing and vetting the CVs of potentialcandidate's vis-a-vis the required competencies and meeting potential candidates prior tomaking recommendations of their nomination to the Board. At the time of appointmentspecific requirements for the position including expert knowledge expected iscommunicated to the appointee.
iv)Criteria for Determining Qualifications Positive Attributes and Independence of aDirector:
The Nomination and Remuneration Committee has formulated the criteria for determiningqualifications positive attributes and independence of Directors in terms of provisionsof Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of theListing Regulations.
Independence: In accordance with the above criteria a Director will be consideredas an Independent Director' if he/she meets with the criteria for IndependentDirector' as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.
Qualifications: A transparent Board nomination process is in place that encouragesdiversity of thought experience knowledge perspective age and gender. It is alsoensured that the Board has an appropriate blend of functional and industry expertise.While recommending the appointment of a Director the Nomination and RemunerationCommittee considers the manner in which the function and domain expertise of theindividual will contribute to the overall skill domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act theDirectors on the Board of the Company are also expected to demonstrate high standards ofethical behavior strong interpersonal and communication skills and soundness of judgment.Independent Directors are also expected to abide by the Code for IndependentDirectors' as outlined in Schedule IV to the Act.
v) Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors:
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an annual evaluation of its own performance performance of the Directorsas well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure and time schedule for the Performance Evaluation process for the Board itsCommittees and Directors.
The Board's functioning was evaluated on various aspects including inter aliastructure of the Board including qualifications experience and competency of Directorsdiversity in Board and process of appointment; Meetings of the Board including regularityand frequency agenda discussion and dissent recording of minutes and dissemination ofinformation; functions of the Board including strategy and performance evaluationcorporate culture and values governance and compliance evaluation of risks grievanceredressal for investors stakeholder value and responsibility conflict of interestreview of Board evaluation and facilitating Independent Directors to perform their roleeffectively; evaluation of management's performance and feedback independence ofmanagement from the Board access of Board and management to each other succession planand professional development; degree of fulfillment of key responsibilities establishmentand delineation of responsibilities to Committees effectiveness of Board processesinformation and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution at Board/Committee Meetings and guidance/support to the management outside Board/ CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members and motivating and providing guidance to the Managing Director.
Directors were evaluated on aspects such as professional qualifications priorexperience especially experience relevant to the Company knowledge and competencyfulfillment of functions ability to function as a team initiative availability andattendance commitment contribution integrity independence and guidance/ support tomanagement outside Board/Committee Meetings. In addition the Chairman was also evaluatedon key aspects of his role including effectiveness of leadership and ability to steermeetings impartiality ability to keep shareholders' interests in mind and effectivenessas Chairman.
Areas on which the Committees of the Board were assessed included mandate andcomposition; effectiveness of the Committee; structure of the Committee; regularity andfrequency of meetings agenda discussion and dissent recording of minutes anddissemination of information; independence of the Committee from the Board; contributionto decisions of the Board; effectiveness of meetings and quality of relationship of theCommittee with the Board and management.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non-Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The NRC also reviewed the performance ofthe Board its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis asappropriate. Significant highlights learning and action points with respect to theevaluation were presented to the Board.
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination and Remuneration Policy for the Directors KeyManagerial Personnel and other employees pursuant to the provisions of the Act and theListing Regulations. The philosophy for remuneration of Directors Key ManagerialPersonnel and all other employees of the Company is based on the commitment of fostering aculture of leadership with trust. The Remuneration Policy of the Company is aligned tothis philosophy.
The Nomination and Remuneration Committee has considered following factors whileformulating Policy:
(i) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
(ii) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
(iii)Remuneration to Directors Key Managerial Personnel and Senior Management involvesa balance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.
It is affirmed that the remuneration paid to Directors Key Managerial Personnel andall other employees is as per the Remuneration Policy of the Company.
Details of the Remuneration Policy are given in the Corporate Governance Report.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Consolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 (Ind AS') form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
The annual financial statements of the subsidiaries and related detailed informationwill be kept at the Registered Office of the Company as also at the registered offices ofthe respective subsidiary companies and will be available to investors seeking informationat any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms ofRegulation 16 (1) (c) of Listing Regulations. The
Policy as approved by the Board is uploaded on the Company's website.
The consolidated financial results reflect the operations of the followingsubsidiaries.
|Name of Company ||CIN/GLN ||Address of The Company ||Holding/ Subsidiary / Associate |
|1 Ahmedabad Ring Road Infrastructure Limited ||U45203GJ2006PLC048981 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned Subsidiary Company |
|2 Aurangabad-Jalna Tollway Limited ||U45203GJ2007PLC049814 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned Subsidiary Company |
|3 Bijapur-Hungund Tollway Private Limited ||U45203GJ2010PTC059669 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Subsidiary Company |
|4 Bhilwara-Rajsamand Tollway Private Limited ||U45203GJ2012PTC072902 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|5 Dhule Palesner Tollway Limited * ||U45203MH2009PLC191222 ||7017th Floor "C" Wing Godrej Coliseum B/h Everard Nagar Sion (East) Mumbai - 400022 ||Wholly owned subsidiary Company |
|6 Hyderabad Yadgiri Tollway Private Limited ||U45203GJ2010PTC059262 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned Subsidiary Company |
|7 Maharashtra Border Check Post Network Limited ||U45201GJ2009PLC056327 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Subsidiary Company |
|8 Nagpur-Seoni Expressway Limited ||U45203GJ2007PLC049963 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|9 Rohtak Hissar Tollway Private Limited ||U45203GJ2013PTC074446 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
| || || || |
|10 Rohtak Panipat Tollway Private Limited ||U45202GJ2010PTC059322 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|11 Shreenathji-Udaipur Tollway Private Limited ||U45201GJ2012PTC069676 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|12 Sadbhav Nainital Highway Private Limited ||U45309GJ2016PTC091777 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
| || || || |
|13 Sadbhav Rudrapur Highway Private Limited ||U45203GJ2016PTC091774 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|14 Sadbhav Bhavnagar Highway Private Limited ||U45309GJ2016PTC092557 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|15 Sadbhav Una Highway Private Limited ||U45500GJ2016PTC092589 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|16 Sadbhav Bangalore Highway Private Limited ||U45202GJ2016PTC094257 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|17 Sadbhav Vidarbha Highway Private Limited ||U45500GJ2017PTC097040 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|18 Sadbhav Udaipur Highway Private Limited ||U45309GJ2017PTC097508 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|19 Sadbhav Jodhpur Ring Road Private Limited ||U45309GJ2018PTC100367 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|20 Sadbhav Tumkur Highway Private Limited ||U45309GJ2018PTC101396 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|21 Sadbhav Bhimasar Bhuj Highway Private Limited ||U45309GJ2018PTC101821 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|22 Sadbhav Kim Expressway Private Limited ||U45309GJ2018PTC101800 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|23 Sadbhav Vizag Port Road Private Limited ||U45309GJ2018PTC101832 ||"Sadbhav House" Opp. Law Garden Police Chowki Ellisbridge Ahmedabad 380006. ||Wholly owned subsidiary Company |
|24 Sadbhav Hybrid Annuity Projects Limited ||U45500DL2018PLC335787 ||Block No. J-59 Ground Floor SAKET New Delhi: 110017 ||Wholly owned subsidiary Company |
* Pursuant to acquisition of 100% stake in Dhule Palesner Tollway Limited fromSadbhav Engineering Limited Hindustan Construction Company Limited and John LaingInvestment Limited as at the date of this report 100 shares each of Sadbhav EngineeringLimited Hindustan Construction Company Limited and John Laing Investment Limited arepending for transfer due to pending approval from NHAI.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 readwith rules made thereunder and pursuant to Regulation 33 of the SEBI (ListingObligationsand Disclosure Requirements) Regulations 2015 the Company had preparedconsolidated financial statements of the Company and its subsidiaries and a separatestatement containing the salient features of financial statement of subsidiaries jointventures and associates in Form AOC-1 attached as Annexure-1 which forms part of thisReport.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The provisions of Section 186 of the Companies Act 2013 with respect to a loanguarantee or security is not applicable to the Company as the Company is engaged inproviding infrastructural facilities which is exempted under Section 186 of the CompaniesAct 2013. The details of investment made during the year under review are disclosed inthe financial statements.
During the year under review your Company has not accepted any fixed deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Thus as on 31 March 2019 there were no deposits which wereunpaid or unclaimed and due for repayment.
All properties and insurable interests of the company to the extent required have beenadequately insured.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All related party transactions that were entered into during the financial year were inthe ordinary course of business and on an arm's length basis. A detailed report onmaterial contracts and arrangements made during the year 2018-19 being arm's lengthtransactions have been reported and annexed hereto in Form AOC-2 as Annexure - 2 and formspart of this report.
There are no materially significant related party transactions made by the company withpromoters key managerial personnel or other designated persons which may have potentialconflict with interest of thecompany at large. The Company has adopted a Related PartyTransactions Policy. The Policy as approved by the Board is uploaded on the Company'swebsite at the web link:http://www.sadbhavinfra.co.in/en/pdf/policy-on-related-party-transaction.pdf
NUMBER OF MEETINGS OF THE BOARD
During the year Seven (7) board meetings were convened and held. Details of boardmeetings and committee meeting are given in the corporate governance report. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.
COMMITTEES OF BOARD
Committee Meetings to be held during the year was circulated in advance to theDirectors.
The Board has constituted an Audit Committee with Mr. Sandip V. Patel as Chairman andMr. Arun S. Patel and Mr. Nitin R. Patel as Members. There have been no instances duringthe year when recommendations of the Audit Committee were not accepted by the Board.
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Act and the Listing Regulations.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors including audit of the internal financial controls overfinancial reporting by the Statutory Auditors and the reviews performed by Management andthe relevant Board Committees including the Audit Committee the Board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2018-19.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and that there are no material departures;
(ii) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
(iii)they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance withthe provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv)they had prepared the annual accounts on a going concern basis;
(v) they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;
(vi)they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that suchsystems are adequate and operating effectively.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).
The provisions of Section 125(2) of the Act do not apply as there was no unclaimed andunpaid dividend or any other amount which require transferring to Investor Education andProtection Fund (IEPF).
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a company's sense of responsibility towardsthe community and environment in which it operates. It is the continuing commitment bybusiness to behave ethically and contribute to economic development of the society atlarge and building capacity for sustainable livelihoods. The Company believes inconducting its business responsibly fairly and in utmost transparent manner. Itcontinually seeks ways to bring about an overall positive impact on the society andenvironment where it operates and as apart of its social objectives. This policy has beenformally formulated and adopted in terms of Section 135 of the Act and Rules framedthereunder to undertake CSR activities.
The Board has constituted a Corporate Social Responsibility Committee headed by Mr.Vasistha C. Patel as Chairman and Mr. Nitin R. Patel Mr. Sandip V. Patel and Mr. Atul N.Ruparel as Members of the Committee.
The responsibilities of the CSR Committee include:
i. Formulating and recommending to the Board of Directors the CSR Policy and indicatingactivities to be undertaken. ii. Recommending the amount of expenditure for the CSRactivities. iii. Monitoring CSR activities from time to time.
In view of the net average loss under review your Company was not required to spendany amount towards the CSR activities as per the applicable provisions of Section 135 ofthe Act. Accordingly the details of the CSR activities during the year under review arenot provided in this Report. The Report on CSR activities is attached as Annexure 3.
BUSINESS RESPONSIBILITY REPORTING
As per Regulation 34 (2) (f) of the Listing Regulations (corresponding to provisionsof Clause 55 of the Listing Agreement) listed companies shall submit as part of theirAnnual Reports Business Responsibility Reports describing the initiatives taken by themfrom an environmental social and governance perspective in the prescribed format. Thisprovision is applicable to top 500 listed companies based on market capitalization as on31 March 2019. The Business Responsibility Report of the Company for the financial yearended on March 31 2019 has been provided separately and forming part of the AnnualReport.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
Pursuant to provision of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 Complaint Redressal Committee has been constitutedwith Mrs. Purvi Parikh as Chairman Mrs. Janki Shah as Presiding Officer Ms. Rutva Shahas Member Ms. Stuti Kinariwala as Member Mr. Ashok Menon as Member Mr. Nitin R. Patelas Member and Mr. Bhadresh K. Soneji as Member.
The Company has not received any complaint of sexual harassment during the financialyear 2018-19 and No meeting of Complaint Redressal Committee was held during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has made compliant under Vigil Mechanism/Whistle Blower Mechanism.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for the Independent Directors to familiarize them with theirrole rights and responsibility as Directors the working of the Company nature of theindustry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso uploaded on the Company's website.
(i) Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. S R B C & CO. LLP Chartered Accountants Ahmedabad having Firm Registration No.324982E/E300003 were appointed as Statutory Auditors of the Company from conclusion of the8th Annual General Meeting (AGM) of the Company till the conclusion of the 13 AGM to beheld in the year 2019 subject to ratification of their appointment at every AGM.
As M/s. S R B C & CO. LLP have completed total term of 5 years as StatutoryAuditor it is required to re-appoint as Statutory Auditor for One year. Further Companyhas received consent from M/s. M/s. S R B C & CO. LLP Chartered Accountants.
Accordingly it was proposed to recommend to the members the re-appointment of M/s. SR B C & CO. LLP Chartered Accountants Ahmedabad as Statutory Auditors of the Companyfor the period of One year from the conclusion of 13 Annual General Meeting of the Companytill the conclusion of 14 Annual General Meeting of the Company to be held in the year2020.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. S G D G & Associates LLP Chartered Accountants Ahmedabad (S G D G) (FirmRegistration No. W100188) from conclusion of 12 AGM held in the year 2018 till theconclusion of the 17 AGM to be held in the year 2023.
The Ministry of Corporate Affairs vide its Notification dated 7 May 2018 hasdispensed with the requirement of ratification of Auditor's appointment by theshareholders every year. Hence approval of the Members for the ratification of Auditors'appointment is not being sought at the ensuing Annual General Meeting.
The Auditors' Report does not contain any qualification reservation or adverse remarkon the financial statements for the year ended 31 March 2019. The Notes on financialstatement referred to in the Auditors' Report are self-explanatory and do not call for anyfurther comments.
(ii) Cost Auditors
The company has received a letter from the cost auditors M/s. J B Mistri & Co.Cost Accountants in Practice having Firm Reg. No. 101067 to the effect that theirappointment if made would be within the prescribed limits under section 141(3) (g) ofthe Companies Act 2013 and that they are not disqualified for appointment.
The board of directors of the company has appointed M/s. J B Mistri & Co. &Associates Cost Accountants as the cost auditors of the Company to conduct the audit ofcost records maintained by the Company as required by the Companies (Cost Records andAudit) Rules 2014 as amended from time to time. The Cost Audit Report for the year2017-2018 was filed with the Ministry of Corporate Affairs. The members are requested toratify the remuneration to be paid to the cost auditors of the company.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s. Ashish Shah & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the year ended 31 March 2019. TheSecretarial Audit Report is annexed as Annexure-4.
There are no qualifications reservations or adverse remarks made by SecretarialAuditor in his report.
SECRETARIAL STANDARDS OF ICSI
The Company is in compliance with the Secretarial Standards on Meetings of the Board ofDirectors (SS - 1) and General Meetings (SS - 2) issued by The Institute of CompanySecretaries of India and approved by the Central Government.
EXTRACT OF THE ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT.9 is annexed asAnnexure-5.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
2. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
3. The Managing Director of the Company has not received any commission from theCompany and not disqualified from receiving any remuneration or commission from any ofsubsidiaries of the Company.
4. No fraud has been reported by the Auditors to the Audit Committee or the Board.
5. There is no Corporate Insolvency Resolution Process initiated under the Insolvencyand Bankruptcy Code 2016.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no earning and expenditure in the foreign currency.
Since the Company does not have any manufacturing activities the other particularsrequired to be provided in terms of Section 134(3)(m) of the Companies Act 2013 are notapplicable.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided separately as Annexure-6 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of theAct and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 will be made available at the registered office of the Companyduring working hours pursuant to the provisions of the first provison to Section 136(1)of the Act and any member interested in obtaining such information may write to theCompany Secretary and the same will be made available to any such member on request.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year and look forward to their continued support in future.The Directors place on record their sincere appreciation to all employees of the Companyfor their unstinted commitment and continued contribution to the Company.
For and on behalf of the Board of Directors
Shashin V. Patel
Date: 27 May 2019