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USG Tech Solutions Ltd.

BSE: 532402 Sector: IT
NSE: N.A. ISIN Code: INE718B01017
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NSE 05:30 | 01 Jan USG Tech Solutions Ltd
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VOLUME 49
52-Week high 2.50
52-Week low 1.61
P/E
Mkt Cap.(Rs cr) 7
Buy Price 1.71
Buy Qty 6011.00
Sell Price 1.76
Sell Qty 90.00
OPEN 1.71
CLOSE 1.71
VOLUME 49
52-Week high 2.50
52-Week low 1.61
P/E
Mkt Cap.(Rs cr) 7
Buy Price 1.71
Buy Qty 6011.00
Sell Price 1.76
Sell Qty 90.00

USG Tech Solutions Ltd. (USGTECH) - Director Report

Company director report

Dear Members

Your directors have pleasure in presenting the 20th Annual Report and the AuditedStatement for the Financial Year ended March 31 2019.

FINANCIAL RESULTS

The Summarized Standalone & Consolidated financial results of the Company for theyear under review are as below:(Rs.in Lacs)

PARTICULARS

Standalone Financials Highlights (in Lacs)

Consolidate Financials Highlights (in Lacs)

Year Ended March 31 2019 Year Ended March 31 2018 Year Ended March 31 2019 Year Ended March 31 2018
Total Income 77.91 124.71 149.51 448.17
Profit (Loss) before depreciation & tax 1.73 50.42 49.14 94.7
Depreciation 2.22 4.85 3.22 7.64
Profit (Loss) before tax & Extra Ordinary Items (0.49) 45.57 45.92 87.06
Exceptional Items - - - 7.66
Profit(Loss) before tax Provision for tax (0.49) 45.57 45.92 79.40
- Current Tax - 0.01 - -
- Deferred Tax (1.15) - (1.15) -
Profit (Loss)after tax 0.65 45.57 47.07 79.40

FINANCIAL PERFORMANCE

The Income of the Company for the year ended 31st March 2019 was Rs.77.91(in lakh)ascompared to Rs. 124.71(in lakh) in the previous year.

CHANGE IN NATURE OF BUSINESS

During the year under review there were no changes in nature of business of thecompany.

DIVIDEND

In order to conserve the resources of the company for the good future prospects andgrowth and as the Company has gained small amount of Profit in the said reporting periodthe Board of Directors taking this view have decided not to distributed any dividend outof the reserve of the Company and therefore the Board of Directors of the company has notrecommended any dividend to the shareholders.

AMOUNT TRANSFERRED TO RESERVE

There is Profit ofamounting of Rs. 0.65 (in lakhs) is transferred to reserves duringthe financial year 2018-2019.

CHANGES IN SHARE CAPITAL

There was no change in the Share Capital of the company during the year under review.

- Disclosure regarding issues of equity shares with differential rights:

The Company has not issues any equity shares with differential rights during the yearunder review.

- Disclosure regarding issues of employee stock options:

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

- Disclosure regarding the issues of sweat equity shares:

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

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the CompaniesAct 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014 for thefinancial year 2018-19 has been enclosed with this report in ANNEXURE- I.

COMPOSITION OF BOARD AND COMMITTEES THE BOARD OF DIRECTORS i. COMPOSITION NAME OFMEMBERS AND CHAIRMAN:

Name of the Board Member Designation
1. Mr. Servesh Gupta Managing Director & Chairman
2. Mrs. Nirmal Garg Independent Director
3. Mr. Deepak Kumar Bansal Independent Director
4. Mrs. Ashima Gupta Executive Director
5. Mr. Manish Kumar Chief Financial Officer

ii. NAME AND DESIGNATION OF COMPLIANCE OFFICER:

Mrs. Jagpreet Kaur Company Secretary was the Compliance officer of the Company for theF.Y. 2018-19 who has resigned from the Company on 31.03.2019.

iii. MEETINGS DURING 2018-2019

Five (5) meetings of Board of Directors of the Company were held and the interveninggap between the Meetings was within the period prescribed under the Companies Act 2013(i.e. the maximum interval between any two board meeting did not exceed 120 Days)

? 22.05.2018
? 30.05.2018
? 13.08.2018
? 05.11.2018
? 13.02.2019

AUDIT COMMITTEE

The restructuring in the Directorship of the Company necessitated restructuring in theAudit Committee. The committee as on date of this report consists of three members namelyMr. Deepak Kumar Bansal Mrs. Nirmal Garg and Mr. Servesh Gupta out of which two areindependent Directors. Mr. Deepak Kumar Bansal is the Chairman of Audit Committee. Allmembers of the Audit Committee possess sufficient knowledge and experience in the field ofFinance and Accounts. The Committee composition is in accordance with the provisions ofCompanies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

i. MEETINGS DURING 2018-2019

? 30.05.2018
? 13.08.2018
? 05.11.2018
? 13.02.2019

STAKEHOLDER RELATIONSHIP COMMITTEE

The restructuring in the directorship of the company necessitated restructuring in thiscommittee. The committee as on date of this report consists of three members.

i. COMPOSITION NAME OF MEMBERS AND CHAIRMAN:

Name of the Committee Member Designation
1. Mr. Deepak Kumar Bansal Chairman
2. Mrs. Nirmal Garg Member
3. Mr. Servesh Gupta Member

ii. MEETINGS DURING 2018-2019

• 22.05.2018 ? 05.11.2018
• 13.08.2018 ? 13.02.2019

NOMINATION AND REMUNERATION COMMITTEE MEETING (NRC)

The restructuring in the directorship of the company necessitated restructuring in thiscommittee. The committee as on date of this report consists of three members. i.COMPOSITION NAME OF MEMBERS AND CHAIRMAN:

Name of the Committee Member Designation
1. Mr. Deepak Kumar Bansal Chairman
2. Mrs. Nirmal Garg Member
3. Mr. Servesh Gupta Member

ii. MEETINGS DURING 2018-2019

• 22.05.2018 ? 13.08.2018
• 30.05.2018 ? 05.11.2018

BOARD EVALUTION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Committees. The Nomination and Remuneration Committee("NRC") has framed the Directors' Performance Evaluation Policy ('Policy') andbased on the recommendation of the NRC. Accordingly the evaluation of Board was carriedout by each Director of each committee by each of its member and of the individualDirector by all other Directors on the Board excepting the concerned Director himself. TheIndependent Directors of the Company positively reviewed the performance ofnon-independent directors and the Board as a whole; reviewed the performance of theChairperson of the company taking into account the views of the executive directors andnon-executive directors; and assessed the quality quantity and timeliness of flow ofinformation between the company management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their Remuneration. The said policy has been uploaded on the websiteof the Company. The key provisions of Nomination and Remuneration policy are appended asan Annexure V11I to the Board's report.

CONSOLIDATED FINANCIAL STATEMENTS

The Company is having two Subsidiary Companies and one Subsidiary LLP;thereforeapplicable provisions of Companies Act2013 and the Accounting Standard AS-21 in relationtoConsolidation of Financial Statements are applicable onthe Company.

SECRETARIAL STANDARDS OF ICSI

The Ministry of Corporate Affairs has mandated SS-1 SS-2 and SS-3 with respect toboard meetings general meetings and payment of dividend respectively. The Company is incompliance with the same.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

All new independent directors inducted into the Board attend an orientation program.The details of training and familiarization program are provided in the corporategovernance report at the time of the appointment of an independent director the Companyissues a formal letter of appointment outlining his / her role function duties andresponsibilities.(http://www.usgtechsolutions.com/wp-content/uploads/2016/04/Familiarisation-Programme.pdf)

USG TECH SOLUTIONS LIMITED CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and theapplicable US Securities laws. The Insider Trading Policy of the Company lays downguidelines and procedures to be followed and disclosures to be made while dealing withshares of the Company as well as the consequences of violation. The policy has beenformulated to regulate monitor and ensure reporting of deals by employees and to maintainthe highest ethical standards of dealing in Company securities. The Insider Trading Policyof the Company covering code of practices and procedures for fair disclosure ofunpublished price sensitive information and code of conduct for the prevention of insidertrading is available on our website: (http://www.usgtechsolutions.com/wp-content/uploads/2016/03/Code-of-Conduct.pdf)

POLICIES

We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our corporate governance policies are available on ourwebsite: http:// www.usgtechsolutions.com/investors/ .

The policies are reviewed periodically by the Board and updated based on need and newcompliance requirement. - Annual Evaluation Policy - Archive Policy - Board DiversityPolicy - Policy On Determination Of Materiality Of Events - Policy On MaterialSubsidiaries - Preservation Of Records - Related Party Transaction Policy

- Vigil Mechanism Policy BOARD INDEPENDENCE

Definition of 'Independence' of Directors is derived from Regulation-25 of SEBI (LODR)Regulations 2015 and Section 149(6) of the Companies Act 2013. Based on the confirmation/disclosures received from the Directors under Section 149(7) of the Companies Act 2013and on evaluation of the relationships disclosed. The following Non-Executive Directorsare considered as Independent Directors as on 31st March 2019: a) Mr. Deepak Kumar Bansalb) Mrs. Nirmal Garg

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013

In accordance with Section 134(3) (g) of the Companies Act 2013 the particulars ofloans guarantees and investments under Section 186 of the Companies Act 2013 are providedin notes to financial statements read with respective heads to the Financial Statementswhich forms part of this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in subsection (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso there to shall bedisclosed in Form No. AOC-2as ANNEXURE- II.

INTERNAL AUDITOR INTERNAL AUDIT & CONTROLS

The Company has well equipped internal audit mechanism. Their scope of work includesreview of processes for safeguarding the assets of the Company review of operationalefficiency effectiveness of systems and processes and assessing the internal controlstrengths in all areas. Internal Auditors findings are discussed with the process ownersand suitable corrective actions taken as per the directions of Audit Committee on anongoing basis to improve efficiency in operations.

AUDITORS AND AUDITOR'S REPORT STATUTORY AUDITORS:

M/s Ravinder Gupta & Associates Chartered Accountants (Firm Registration Number:0009102N) were appointed as Statutory Auditors for a period of 5 years from the 19thAnnual General Meeting who shall hold the office till the conclusion of 24thAnnual GeneralMeeting of the company as per the section 139(1) of the Companies Act 2013. (Theratification of Auditors Appointment has been omitted by via a section 40 of Companies(Amendment) Act 2017 on 07th May 2018).

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/S Atiuttam Singh & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit inForm MR-3 for the Financial Year ended March 31 2019 is annexed as ANNEXURE-III to theReport. There are qualifications reservations or remarks made by Secretarial Auditor Inhis report.

Copy of report placed before Board of Director after the Detailed Discussion on thepoints raised by the Secretarial Auditor in his report the following remarks has given bythe management of the Company.

Observation by Secretarial Auditor Remarks by Management
1. Company has failed to disclose in the Board's report as required under the provisions of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Based on the observation of the Secretarial Auditor we have disclosed the necessary information as required under the provisions of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in the Board Report for the F.Y. 18-19
2. Company has failed to comply the provisions of Section 139 of Companies Act 2013 relating to appointment of Auditors. Company has passed the EGM Resolution on 28.02.2018 for appointment of Statutory Auditor in case of casual vacancy upto the date of Upcoming Annual General Meeting held for the FY 17-18 but mistakenly mentioned period of accounts of 5 years in ADT-1 filed for casual vacancy. It is clerical error although we have again filed the ADT-1 after re- appointment of Statutory Auditor in duly convened AGM on 28.09.2018
3. There are certain instances of delayed submission of reports/statements/intimations to BSE under the provisions of Securities and Exchange Board (Listing Obligations and Disclosure Requirements) Regulations 2015 Delayed Submissions were mostly for the quarter and financial year ended 31.03.2019 as the Company Secretary of the Company was resigned on 31.03.2019. Although for Compliances management has also taken the services of Practicing Professional to comply with the provisions of Companies Act 2013 and Listed Compliances.

COST AUDITOR

As per the Cost Audit Orders Cost Audit is not applicable to the Company's in respectof its product/services.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standard of corporate Governance beingFountain head of Value Creation for all Stakeholders especially shareholders. The Companyhas in place a well-defined Corporate Governance Mechanism which considers the interest ofthe entire stakeholder. Separate report on corporate governance forming part of the BoardReport Along with Auditor's Certificate is ANNEXURE -IV

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

As required by SEBI (Listing Obligations and Disclosure Requirements) regulations2015 the auditors' certificate on corporate governance is enclosed as ANNEXURE - V to theboard's report. The auditors' certificate does not contain any qualification reservationor adverse remark.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management's discussion and analysis report on company's performance - industrytrends and other material changes with respect to the company and its subsidiarieswherever applicable are presented in this annual report

ANNEXURE- VI

DECLARATION BY INDEPENDENT DIRECTOR(S)

The Independent Directors comply with the definition of Independent Director as givenunder Section 149(6) of the Companies Act 2013. While appointing/ re-appointing anyIndependent Directors on the Board the Committee considers the criteria as laid down inthe Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. All the Independent Directors give a certificate confirming that theymeet the "independence criteria" as mentioned in Section 149(6) of the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

All independent director have given the Declaration that they meet the criteria ofindependence as laid down under the Companies Act 2013 and SEBI (LODR) Regulations 2015

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

There are no significant and material orders passed by the regulators or tribunalsimpacting the going concern status and Company's operations in future.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129 of the Companies Act 2013 Consolidated FinancialStatements are attached and form part of the Annual Report and the same shall be laidbefore the ensuing AGM along with the Financial Statements of the Company.

SUBSIDIARY COMPANIES JOINT VENTURES & ASSOCIATE COMPANIES

The Company is having two wholly owned subsidiary company and one subsidiary LLP. TheDetails of same is provided as under:

S.NO NAME OF COMPANY/LLP RELATIONSHIP WITH HOLDING COMPANY
1. Retails Information Systems Pty Ltd Foreign Wholly Owned Subsidiary
2. Niskarsh Properties Pvt Ltd Wholly Owned Subsidiary
3. Zeal Appartment LLP Subsidiary

LISTING

The Equity shares continue to be listed on the BSE Ltd. (BSE) and the Calcutta StockExchange of India Ltd. (CSE).

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOCONSERVATION OF ENERGY:

The core activity of the company is civil construction which is not an energy intensiveactivity however all steps are taken to conserve energy at all levels of operationswherever possible. There are no particulars required to be disclosed as required under thenew provisions of Companies Act 2013 & rules made there under.

TECHNOLOGY ABSORPTION

During the year there was no Technology Absorption as your Company has not undertakenany research and development activity in any manufacturing activity nor any specifictechnology is obtained from any external sources which need to be absorbed or adapted.There are no particulars required to be disclosed as required under the new provisions ofCompanies Act 2013 & rules made thereunder. Innovation is a culture in the Company toachieve cost efficiency in the construction activity to be more and more competitive inthe prevailing environment and the effect of the same cannot be quantified.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

The foreign exchange earning/outgo during the year are as under: Foreign ExchangeEarnings/ Outgo: (in Indian Rs)

Earnings Nil
Outgo Nil

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act the Board of Directors herebystate that:

A. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; B. Thedirectors 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 fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; C. The directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities D. The directors had prepared the annual accounts on agoing concern basis; and E. The directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

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

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

As per the Companies Act 2013 companies having net worth of Rs. 500 crore or more orturnover of Rs. 1000 crore or more or net profit of Rs. 5 crore or more during anyfinancial year are required to constitute a Corporate Social Responsibility (CSR)Committee of the Board of Directors comprising three or more directors at least one ofwhom should be an independent director and such company shall spend at least 2% of theaverage net profit of the company's three immediately preceding financial years.

During the financial year 2018-19 the Company has not crossed the threshold limit forthe Corporate Social Responsibility Committee as required under the Section 135 of theCompanies Act 2013 (as defined above). So the company has not constituted the CSRcommittee and not done any activities defined under Schedule VII of the Companies Act2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board

Mr. Servesh Gupta Managing Director is Chairman of the Board.

Inductions

During the year the Board has made appointment of Mr Servesh Gupta as AdditionalExectutive Director on 22nd May 2018 and appointed as managing Director & Chairman on30th May 2018 based on the recommendations of the nomination and remuneration committee.

Re-Appointments

As per the provisions of the companies act 2013 Mr. Servesh Gupta retires by rotationat the ensuing annual general meeting and being eligible seeks re-appointment. The boardrecommends his re-appointment.

Retirements Resignations & vacation

Mr. Servesh Gupta has resigned from the post of CEO w.e.f. 21st May 2018

Mrs. Jagpreet Kaur has resigned from the post of Company Secretary w.e.f. 31st March2019.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION&REDRESSAL) ACT 2013:

The Company has adequate system for prevention of Sexual Harassment of Women atworkplace and has set up cell for the same. During the year Company has not received anycomplaint of harassment.

PARTICULAR OF EMPLOYEES

The Information required pursuant to Section 197 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is form integral partof this report. The Details which are required to disclose in annexure is as under: Thename of every employee whoa. If employed throughout the financial year was in receipt ofremuneration for that year which in the aggregate was not less than one crore and twolakh rupees (1.02 Crore p.a.);NIL b. If employed for a part of the financial year was inreceipt of remuneration for any part of that year at a rate which in the aggregate wasnot less than eight lakh and fifty thousand rupees per month (8.5 lac p.m.). NIL c. Ifemployed throughout the financial year or part thereof was in receipt of remuneration inthat year which in the aggregate or as the case may be at a rate which in theaggregate is in excess of that drawn by the managing director or whole-time director ormanager and holds by himself or along with his spouse and dependent children not lessthan two percent of the equity shares of the company. NIL

The Details related to Remuneration of employees (Managing Director ExecutiveDirector Chief Financial Officer and Company Secretary) is appended in ANNEXURE-VII.

DISCLOSURE WITH RESPECT TO DMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT

No DMAT suspense account /unclaimed suspenseaccount reported by RTA NSDL and CDSL tothecompany.

DISCLOSURE OF DETAILS OF ANY APPLICATIONFILED FOR CORPORATE INSOLVENCYRESOLUTIONPROCESS BY A FINANCIAL OR OPERATIONALCREDITOR OR BY THE COMPANY ITSELF UNDERTHEIBC BEFORE THE NCLT;

No application has been filed for corporate insolvencyresolution process by afinancial or operational creditoror by the company itself under the IBC before the NCLT

ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record their appreciation towardsbankers clients and all the business associates for their continuous support to theCompany and to the shareholders for the confidence reposed in the Company management. Thedirectors also convey their appreciation to the employees at all levels for their enormouspersonal efforts as well as collective contribution.

For and on behalf of the Board of Directors of

USG Tech Solutions Limited

SD/- SD/-
Mr. Servesh Gupta Mrs. Ashima Gupta
Managing Director Director
DIN- 01451093 DIN- 07795866
Address: 4A/1Raj Narain Road Civil Lines Address : 4A/1Raj Narain Road Civil Lines
Delhi-110054 Delhi-110054
Place: New Delhi
Date: 14.08.2019

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