To The Members Syncom Formulations (India) Limited
The Directors take pleasure in presenting their 29th Annual Report together with theaudited consolidated and standalone financial statements of the Company (Syncom) for theyear ended 31st March 2017.
HIGHLIGHTS OF PERFORMANCE
Consolidated income for the year increased to Rs. 18761.33 Lakhs as compared toRs. 18656.52 Lakhs in the previous year;
Consolidated net sales for the year was Rs.18482.24 Lakhs as compared to Rs.18389.70 Lakhs in the previous year.
Consolidated profit before tax for the year was Rs. 1587.74 Lakhs as compared toRs.
1610.09 Lakhs in the previous year and Consolidated Profit after tax for the year wasRs. 1053.41 Lakhs as compared to Rs. 1035.56 Lakhs in 2016.
|Particulars ||Consolidated ||Stand Alone |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Revenue from Operations ||18761.32 ||18656.52 ||18761.32 ||18656.52 |
|(Net) and Other Income || || || || |
|Profit Before Tax (PBT) ||1587.74 ||1610.09 ||1587.74 ||1610.09 |
|Provision for Tax ||534.33 ||574.53 ||534.33 ||574.53 |
|Profit After Tax (PAT) ||1053.41 ||1035.56 ||1053.41 ||1035.56 |
|Balance brought forward from previous year ||655.94 ||708.30 ||655.94 ||708.30 |
|Profits available for ||1709.35 ||1743.85 ||1709.35 ||1743.85 |
|Appropriations || || || || |
|Appropriations: || || || || |
|Proposed Equity Dividend ||156.13 ||156.13 ||156.13 ||156.13 |
|Tax on Equity Dividends ||31.78 ||31.78 ||31.78 ||31.78 |
|Transferred General Reserve ||700.00 ||900.00 ||700.00 ||900.00 |
|Surplus carried to the next year's account ||821.44 ||655.94 ||821.44 ||655.94 |
|EPS (Basic and Diluted) on equity share of Rs.1/- ||0.135 ||0.133 ||0.135 ||0.133 |
Syncom always strives to enhance stakeholders and customers satisfaction value. Inpursuance of the same your directors are pleased to recommend payout of 26th dividend @Rs. 0.02 (2%) on the equity share of Re.1 each (Previous year @ Rs. 0.02 (2%) of theequity shares of Re.1 each) and proposes to pay Rs.156.13 Lakhs as dividend (Previous yearRs.156.13 Lacs) subject to approval by the members at the ensuing Annual General Meeting.
SHARE CAPITAL & RESERVES
The paid up Capital of Syncom as on 31st March 2017 was Rs. 780652180 divided into780652180 equity shares of Re. 1/- each. During the year under review Syncom hasneither issued shares with differential voting rights nor granted stock options nor sweatequity. As on 31st March 2017 none of the Directors of Syncom hold convertibleinstruments. Promoters are not holding any security convertible into equity shares duringthe year 2016-17.
Transfer to Reserves
During the year under review your company proposes to transfer Rs.700.00 Lakhs to thegeneral reserves (Previous year Rs. 900.00 Lakhs).
Cash and cash equivalent as at 31st March 2017 was Rs.651.95 Lakhs as compared to Rs.569.41 Lakhs in previous year. Syncom continues to focus on judicious management of itsworking capital Receivables inventories and other working capital parameters were keptunder strict check through continuous monitoring.
The details relating to deposits covered under Chapter V of the Act -(a) Acceptedduring the year : Nil (b) Remained unpaid or unclaimed as at the end of the year: Nil
(c) Whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved: Nil
Details of deposits which are not in compliance with the requirements of Chapter V ofthe Act:
The Company has not accepted any deposit which are not in compliance of the Companies(Acceptance of Deposits) Rules 2014 during the financial year.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Your company has not given any guarantee or provided any security to the other businessentity during the financial year but the company has made investment and details of theinvestment is disclosed as per the requirement Section 186 of Companies Act 2013 &Regulation 34(3) of the SEBI (LODR) Regulations 2015 read with Schedule V of the ListingRegulations is given as under.
|Name of the Company ||Nature of Transacti ons/ Relations hip ||Investmen t made/ Guarantee /Loans Provided ||Opening Balance as on 01/04/2016 ||Transacti ons made during the year ||Closing Balance as on 31/03/2017 |
|Ravi Kumar Distilleries Ltd. ||Non- Current ||Investment Made ||17926033 ||- ||17926033 |
|Bil Energy Ltd. ||Non- Current ||Investment Made ||6868519 ||- ||6868519 |
|PFL Infotech Ltd. ||Non- Current ||Investment Made ||17444039 ||- ||17444039 |
|Risa International Ltd. ||Non- Current ||Investment Made ||5674407 ||- ||5674407 |
|Rutron International Ltd. ||Non- Current ||Investment Made ||3943231 ||- ||39343231 |
|Upsurge Investment & Finance Ltd. ||Non- Current ||Investment Made ||10462339 ||- ||10462339 |
|Lupin Ltd. ||Non- Current ||Investment Made ||1462212 ||1462212 ||0 |
|Trade Services FZE* ||Wholly Owned Subsidiary ||Investment in Share ||1067896 (1 Share of Face Value ||- ||1067896 (1 Share of Face Value |
| || || ||AED || ||AED 65000) |
| || || ||65000) || || |
ECONOMIC SCENARIO AND OUTLOOK
The Indian Pharmaceutical Industry is the 3 largest pharmaceutical market in terms ofvolume and 10 largest in terms of value contributing towards 10% of global production.India holds an important position in the World pharmaceutical market. The India's GDP grewby 7% approx in 2016-17 making the country one of the fastest growing economy amongstG20. The Indian Pharmaceutical market has seen growth of >10% in last one year. Indiandrugs are exported to more than 200 countries in the world and India supply 20 per cent ofglobal generic medicines market exports in terms of volume making the country the largestprovider of generic medicines globally and expected to expand even further in comingyears.
The Pharma Industry in India has remained on a strong growth path over the past fewyears and is expected to increase to USD 48 billion by 2017-18 at a CAGR of 13-14%. TheWorld pharmaceuticals market is forecast to grow with approx 12% percent or more from uptill 2020 which can be increased if companies invest more in drug research sector as wellas promotion. Over the upcoming years the growth will be more as compared to the currentstanding position. The Government of India unveiled 'Pharma Vision 2020' aimed at makingIndia a global leader in end-to-end drug manufacture.
In the Union Budget 2017 the government has demonstrated its commitment to increasehealthcare spending. The National Health plan has been approved by the cabinet and aims atholistic approach to address the healthcare problems of all sectors of society and theirsolutions with participation from private sector as strategic partners in this mission.
Approval time for new facilities has been reduced to boost investments. Further thegovernment introduced mechanisms such as the Drug Price Control Order and the NationalPharmaceutical Pricing Authority to deal with the issue of affordability and availabilityof medicines.
INDUSTRY STRUCTURE AND OPPORTUNITIES
In this economic scenario the Indian Pharmaceuticals Market has seen almost doubledigit growth in last 1-2 year. A compound annual rate growth of 11-12% before 2020 in theIndian Pharmaceutical market is forecasted. By 2020 India is likely to be among the topthree pharmaceutical markets by incremental growth and sixth largest market globally inabsolute size. The Union Cabinet has given its nod for the amendment of the existingForeign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDIup to 100 per cent under the automatic route for manufacturing of medical devices subjectto certain conditions; this will result in rapid growth in the Indian pharma industry.
The Union Budget 2017-18 announced certain changes connected to the healthcare sectorand there was a increase of health outlay in the Financial Year 2017-2018 as compared tothe previous Financial Year. Increase in funding to the National Health Mission will helpstrengthen efforts towards measles vaccination along with reduction in Maternal MortalityRate. Higher medical education will receive a much needed boost by an increase inthe number of post- graduate seats and adding more hospitals to offer the DiplomateNational Board (DNB) degree and enhance specialty care in fields like endocrinology andoncology. In addition primary care's focus will be broadened with the conversion of 1.5lakh health centres into health Wellness Centres.
RISKS & CONCERNS
The company operates in various developed and emerging markets across the world as aresult general global economic and political conditions can affect the business of thecompany similarly as the company is a generic pharmaceutical player operating indifferent countries across the globe there are large number of players in the marketultimately resulting in cut throat competition. This competition constantly puts thepressure on the prices of the generic products which company charges to the customers.During the past few years industry has witnessed various changes. A few other concerns areregulatory risk growth risk litigation risk inflation which ultimately affect thebusiness and volume of the products of the company. The recent amendment was in DPCOpolicy which had number of drug formulations with an increase in price control. The otherremaining formulations will be soon under the price control under new DPCO that will alsopose challenges for pharma companies in the near future.
A few other concerns are low per capita consumption of medicines unstable politicalenvironment in developing and under developed countries including India currencyfluctuations regulatory issues inflation which has resulted in an all round increase ininput costs.
Syncom has a Risk Management Policy in force to review and mitigate risks relevant toenvironmental operational & business risks to safeguard its interest. Syncom'scontinued investments in manufacturing facilities and its strategy to remain a verticallyintegrated pharmaceutical business is a critical differentiator to create sustainablecompetitive advantage not only for products launched in international markets but also forcontractual supplies to global generic companies with a conscious endeavor for market andcustomer diversification. The government introduced mechanisms like Drug Price ControlOrder and the National Pharmaceutical Pricing Authority to deal with the issue ofaffordability and availability of medicines. Also there is a talk of separate PharmaMinistry for the sector for better coordination of the work.
In view of the profits and turnover of Syncom during the previous three years it isrequired to undertake social responsibility (CSR) projects during the year 2016-17 underthe provisions of the section 135 of the Companies Act 2013 and the rules made thereunder. As part of its initiatives under CSR Syncom has undertaken projects in the areasof Education and Health. These projects are largely in accordance with Schedule VII of theCompanies Act 2013.
The Annual Report on CSR activities is annexed herewith as "Annexure A"and the CSR policy is available at the website of the Company at www.sfil.in. TheBoard confirms that the Company has obtained the responsibility statement of the CSRCommittee on the implementation and monitoring of the CSR Policy during the year asenclosed to the Board Report.
OCCUPATIONAL HEALTH & SAFETY (OH&S)
This initiative involved and positively engaged all levels of personnel on the plantand the Company's business. With regard to employee's safety two key areas of focusidentified were Facility Management for the employees and Equipment Tools & MaterialManagement. The Facility Management initiative was implemented to ensure adequate welfarefacilities for the employees such as wash rooms with bathing facilities rest roomsavailability of drinking water etc. The Equipment Tools & Material Management programensured that the tools used by the employee were safe. The process of screening ofcontractors was made more stringent to ensure that the employees were aligned with theCompany's objectives to ensure Zero Harm'.
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
Syncom's HR processes such as hiring and on-boarding fair transparent onlineperformance evaluation and talent management process state-of-the-art workmen developmentprocess and market aligned policies have been seen as benchmark practices in theIndustry. During the year under review the following Human Resources initiatives receivedgreater focus:
Employer of Choice: Employees are encouraged to express their views and areempowered to work independently. Employees are given the opportunity to learn throughvarious small projects which make them look at initiatives from different perspectives andthus provide them with a platform to become result oriented. This has helped greatly inoverall development of the employee and has significantly arrested the attrition rate.
Leadership Development: As a part of leadership development talented employeeshave been seconded to the senior leadership team to mentor them and prepare them for thenext higher role.
Gender Equality: Syncom as a company has a policy to promote Gender Equality Wehire female employees and mentor and groom them to take higher managerial positions. Wealso encourage our female employee to have a good work life balance. Disclosure under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013The Company has in place an Anti-Sexual Harassment Policy in line with the requirements ofThe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. No complaint was received during the year underreview.
RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY
Syncom has in place a mechanism to identify assess monitor and mitigate various risksto key business objectives. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of Syncom.Syncom has an Internal Control System commensurate with the size scale and complexity ofits operations. To maintain its objectivity and independence the Internal Audit functionreports to the Chairman of the Audit Committee of the Board.
Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard. The risk management policy of the Company is available at the website atwww.sfil.in.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Syncom has a vigil mechanism named vigil mechanism/whistle blower Policy to deal withinstance of fraud and mismanagement if any. The details of the Risk Management Policy isexplained in the Corporate Governance Report and also posted on the website at www.sfil.in.Vigil mechanism/whistle blower Policy is attached with the Annual Report as"Annexure B".
AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S SUBSIDIARY
As on 31st March 2017 Syncom has Trade Services FZE foreign subsidiary which is 100%Wholly Owned Subsidiary Company however the same ceased to be in existence w.e.f. 25thApril 2017. Except that the Company does not have any associate or joint venture companyat the beginning or any time during the year 2016-17.
There has been no change in the number of subsidiaries or in the nature of business ofthe subsidiaries during the year under review. In accordance with Section 129(3) of theCompanies Act 2013 your Company has prepared a consolidated financial statement ofSyncom which is forming part of the Annual Report. A statement containing salient featuresof the financial statements of the subsidiary company in the Form AOC-1 is also includedin the Annual Report as the "Annexure C".
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of your Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company www.sfil.in. Furtheras per fourth proviso of the said section audited annual accounts of the subsidiarycompany have also been placed on the website of the Company www.sfil.in . Shareholdersinterested in obtaining a copy of the audited annual accounts of the subsidiary companymay write to the Company Secretary at the Company's registered office.
BOARD OF DIRECTORS KMPs AND MEETINGS OF THE BOARD Independent Directors
At the Annual General Meeting (AGM) of Syncom held on September 22nd Sept. 2014 theMembers had re-appointed all the existing independent directors viz Shri Krishna DasNeema (DIN 02294270) Shri Vinod Kumar Kabra (DIN 01816189) and Shri
Praveen Jindal (05327830) under the Companies Act 2013 for a term of 5 years witheffect from 1st April 2014 and they are not liable to retire by rotation.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013. Further thatthe Board confirmed that all the independent directors fulfill the criteria laid under theCompanies Act 2013 and the SEBI (LODR) Regulations 2015.
Directors seeking re-appointment
In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association of the Company Mr. Kedarmal Bankda (DIN 00023050) director isliable to retire by rotation and he is eligible for re-appointment. Your Board recommendsto pass necessary resolution for his re-appointment.
Change in the Key Managerial Personnel's
CS Nafisa Vakil was performing the duties of Company Secretary & Compliance officerhad resigned from the post of company Secretary w.e.f. 13th February 2017. The Companyhas appointed CS Prachi Rathore w.e.f. 13th February 2017 as the company SecretaryCompliance Officer and the Key Managerial Personnel of the company. Prachi Rathore hasalso resigned w.e.f. 14th August 2017 and the Company has appointed CS Karishma Kakkarw.e.f. 16th August 2017 in the meeting held on 14th August 2017 as the company Secretaryand Compliance Officer as the Key Managerial Personnel of the company. Except that thereis no change in the key managerial personnel's of the Company.
Key Managerial Personnel's
Syncom is having 4 (Four) Key Managerial Personnel's viz Shri Ankit Kedarmal BankdaChief Financial Officer Shri Vijay Shankarlal Bankda Managing Director and Shri KedarmalShankarlal Bankda Whole-time director and CS Prachi Rathore are functioning as the KeyManagerial Personnel under section 203 of the Companies Act 2013 as on 31st March 2017.
Composition of the Board
Syncom is having total 6 (Six) directors in the Board including 3 (Three) independentdirectors and meeting the requirement of the Companies Act 2013 and the SEBI (LODR)Regulations 2015 as applicable to the Company Shri Kedarmal Bankda is the Chairman of theBoard and the Company's meetings.
Number of meetings of the Board
The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other Board business. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulationas permitted by law which are confirmed in the subsequent Board meeting. The notice ofBoard meeting is given well in advance to all the Directors. Usually meetings of theBoard are held at the Corporate Office at Indore (M.P.). The Agenda of the Board/Committeemeetings is circulated at least a week prior to the date of the meeting. The Agenda forthe Board and Committee meetings includes detailed notes on the items to be discussed atthe meeting to enable the Directors to take an informed decision. The Board met 4(four) times in financial year 2016-17 viz. on 30th May 2016 30th July 201614th Nov. 2016 and 13th Feb. 2017. The maximum interval between any two meetings didnot exceed 120 days. The Company has complied with all the requirements of the SecretarialStandard-1 in respect of the Board and the Committee Meetings.
The definition of Independence' of Directors is derived from SEBI (LODR)Regulations 2015 and section 149(6) of the Companies Act 2013. Based on theconfirmation/disclosures received from the Independent Directors and on evaluation of therelationships disclosed Shri Krishna Das Neema Shri Praveen Jindal and Shri Vinod KumarKabra are the Non-Executive and Independent Directors in terms of Regulation 17(10) of theSEBI (LODR) Regulations 2015 and section 149(6) of the Companies Act 2013.
Policy on Directors' appointment and remuneration
The Policy of Syncom on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under section 178(3) is appended as "Annexure D" to thisReport and has also placed on the website at www.sfil.in.
Annual evaluation by the Board
The evaluation frame work for assessing the performance of Directors comprises of thefollowing key areas: i. Attendance of Board Meetings and Board Committee Meetings ii.Quality of contribution to Board deliberations iii. Strategic perspectives or inputsregarding future growth of Company and its performance iv. Providing perspectives andfeedback going beyond information provided by the management v. Commitment to shareholderand other stakeholder interests
The evaluation involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis/her evaluation.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in Note 27.21 of the Standalone Notes tothe Financial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31st 2017 and of the profit ofthe Company for the year ended on that date;
c. that proper and sufficient care has been taken 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. that the annual financial statements have been prepared on a going concern basis; e.that proper internal financial controls were in place and that the financial controls wereadequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
COMMITTEES OF THE BOARD
During the year the Board has the five Committees as required under the CompaniesAct 2013 and SEBI (LODR) Regulations 2015 as follows: (a) Audit Committee (b) CSRCommittee (c) Nomination and Remuneration Committee (d) Stakeholders' RelationshipCommittee (e) Risk management Committee Details of all the Committees along with theircharters composition and meetings held during the year are provided in the "Reporton Corporate Governance" a part of this Annual Report and placed on the website atwww.sfil.in
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by Syncom with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of Syncom. Therefore there is no requirement to furnish any details in theForm AOC-2.
All Related Party Transactions are placed before the Audit Committee and the Committeehas accorded its Omni Bus Approval and also reviewed the same periodically also the Boardfor approval on a quarterly basis. The statement is supported by a Certificate from the MDand the CFO. The Company has developed a Related Party Transactions Policy StandardOperating Procedures for purpose of identification and monitoring of such transactions.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at www.sfil.in
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders were passed by the Regulators/Courts which would impactthe going concern status of the Company and its future operations of the Company duringthe year under review.
However the SEBI has issued an Ex-Party Ad- Interim Order No. WTM/RKA/ISD/2014 dated19th December 2014 in the matter of First Financial Services Limited and has restrainthe company to access the capital market till the further order.
The Company has also filed an application before the SEBI Appellate Tribunal fordeletion of the name of the Company. SEBI has also granted an Interim Relief vide letterSEBI/HO/ISD/ISD/OW/P/2016/0000001565 dated 22nd January 2016 in the aforesaid matter andfurther orders was issued by the SEBI on 25th August 2016 for providing reliefs for saleof the investments as per conditions stipulated therein. The Company is complying with theterms and conditions of the same
The Board takes pleasure in stating that no such observation has been made by theAuditors in their report which needs any further explanation by the Board. According toapplicable provisions of the Companies Act 2013 M/s S.P. Moondra & Co. CharteredAccountant were appointed as statutory auditors of the company for a period of three yearsat the Annual General Meeting of the Company held on 22nd Sept. 2014 accordingly theywill retire at the forthcoming AGM of the company. The Audit Committee at their meetingheld on 14th August 2017 has recommended and the Board of Directors has proposed theappointment of M/s Sanjay Mehta & Associates Chartered Accountants (Firm RegistrationNo. 011524C) as Statutory Auditors of the company for a period of 5 years' subject toapproval of the members of the company in forthcoming General Meeting in place M/s S.P.Moondra & Co. Chartered Accountants whose tenure is expiring on forthcoming AGM. Theyhave confirmed their eligibility under Section 141(3)(g) of the Companies Act 2013 andthe Rules framed there under for appointment as Auditors of the Company. The Company hasobtained their eligibility letter as required under the Companies Act 2013. Your Boardrecommend their appointment and pass necessary resolution as set out in the notice.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its drug formulation activity is required to be audited. Your Directors hadon the recommendation of the Audit Committee appointed M/s M. Goyal & Co. CostAccountants to audit the cost accounts of the Company for the financial year 2017-18 on aremuneration of Rs. 25 000/-plus GST as required under the Companies Act 2013 theremuneration payable to the cost auditor is required to be placed before the Members in ageneral meeting for their ratification. Accordingly a Resolution seeking Member'sratification for the remuneration payable to M/s M. Goyal & Co Cost Auditors isincluded at Item No. 5 of the Notice convening the Annual General Meeting.
Your Company has filed the Cost Audit Report for the year 2015-16 to the CentralGovernment on 05/01/2017 which was self-explanatory and needs no comments. The Company isin process to file the Cost Audit Report for the year 2016-17. Further that there is noqualification and observation raised by the auditors which needs clarification by theBoard.
Pursuant to the provisions of section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Boardof directors has appointed M/s D.K. Jain &Co. Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report is annexedhere with as "Annexure E". The Secretarial Audit Report for the Financial Yearended March 31 2017 is self explanatory and needs no comments as such except thefollowing comments: (a) Persons associated with the promoters has sold 72119081 equityshares of Rs. 1/- each consisting of 9.24% of the total paid up capital during thefinancial year 2016-17 without complying with the Regulation 5 of SEBI (Prohibition ofInsider Trading) Regulations 2015 relating to submission of the Trading Plans and mattersrelated thereto.
Management Comments: The promoters and their associates have obtained opinion of theLead Manager Hence it can be concluded that the persons who are not in possession ofunpublished price sensitive information and the persons other than persons who by virtueof his/her designation in the company are perpetually in possession of unpublished pricesensitive information can trade in securities of such listed company without complying theRegulation 5 of SEBI (Prohibition of Insider Trading) Regulations 2015 relating to theTrading Plan.
(b) SEBI has issued an Interim Order in 2014 in the matter of First Financial Serviceson 19th Dec.2014 However relaxation for dealing in the investment is provided by theSEBI by order of August 2016 to the company subject to certain conditions.
Management Comments: The Company is complying the terms and conditions as provided inthe relaxation given for dealing in the investments. However the Company has also made anappeal before the SEBI Appellate Tribunal for set aside the orders of the SEBI against theCompany which is process with the SEBI Appellate Tribunal.
Pursuant to the provisions of section 138 of the Companies Act 2013 the Board ofDirectors of the company at their Board Meeting held on 14th August 2017 has appointedM/s Bansal & Agrawal Chartered Accountants (FRN: 010803C) as recommend by the AuditCommittee of the Company as the internal auditors of the company in place of existinginternal Auditors of the company M/s Biyani Mittal & Co. who have shown theirunwillingness to act as internal auditors of the company.
ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stake holders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive as set and resource base and nurturing overall corporatereputation. Syncom is also committed to creating value for its other stake holders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
As per SEBI (LODR) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report "Annexure F".
MD & CFO certification
Certificate obtained from Shri Vijay Bankda Managing Director and Mr. Ankit KedarmalBankda Chief Financial Officer pursuant to Regulation 17(8) of SEBI (LODR)) Regulations2015 and for the year under review was placed before the Board at its meeting held on 30th`May 2017.
A copy of the certificate on the financial statements for the financial year endedMarch 31 2017 is annexed along with this Report as "Annexure G".
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23and AS 27 issued by the ICAI form partof this Annual Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed here with as "AnnexureH".
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL STATUS OF THE COMPANY
The Company has commenced two more business segments relating to renting of propertyand merchant trading of commodities during the year under review except that there havebeen no material changes and commitments if any affecting the financial position of theCompany as well as after the close of financial year i.e. since 31st March 2017.
APPLICABILITY OF THE IND -AS
Rule 4(1)(iii)(a) of the Companies (Indian Accounting Standards) Rules 2015 notifiedvide Notification No.G.S.R.111(E) on 16th Feb. 2015 provides that if the company is alisted company or having a net worth of less than Rs. 500 Crore then Company is requiredto comply with the Indian Accounting Standards (IND AS) w.e.f. 1st April 2017. Thereforethe company has complied the same w.e.f. 1st April 2017.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return for the year 2016-17 inForm MGT-9 is annexed here with as "Annexure I".
RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'S REMUNERATION ANDPARTICULARS OF EMPLOYEES.
Pursuant to provision of section 197(12) of Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and thedetails of Top 10 employees given in the "Annexure J".
During the year none of the employees received remuneration in excess of Rs. One CroreTwo Lakhs or more per annum or Rs. Eighty Lakhs Fifty Thousand per month for the part ofthe year. Therefore there is no information to disclose in terms of the provisions of theCompanies Act 2013.
FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has in place a Familiarisation Program for Independent Directors to provideinsights into the company to enable the Independent Directors to understand its businessin depth and contribute significantly to the company's success. The Company has devisedand adopted a policy on Familiarisation Program for Independent Directors and is alsoavailable at the company's website at www.sfil.in and the weblink for the policy anddetails of the Familiarisation Program imparted to the Independent Directors during theFinancial year at h t t p: / / w w w. s y nc om f o r m ul a t io n s . c om / in d ex . ph p? o pt i on = c o m d o cman&task=cat_view&gid=66&Itemid=105.
PREVENTION OF INSIDER TRADING
In view of the SEBI (Prohibition of Insider Trading) Regulation 2015 the Company hasadopted a Code of Conduct for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company. The Codeprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed.
The statements made in this Report and Management Discussion and Analysis Reportrelating to the Company's objectives projections outlook expectations and others may be"forward looking statements" within the meaning of applicable laws andregulations. Actual results may differ from expectations those expressed or implied. Somefactors could make difference to the Company's operations that may be due to change ingovernment policies global market conditions foreign exchange fluctuations naturaldisasters etc.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continuous 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. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
| ||For and on behalf of the Board |
| ||KEDARMAL BANKDA |
|Place: Indore ||Chairman & Whole time Director |
|Date : 14th August 2017 ||DIN 00023050 |