DIRECTORS' REPORT To, The Members, Your Directors have pleasure in presenting their 31st Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015. 2. PERFORMANCE REVIEW: The overall income from Franchisee operations for 2014-15 is 38.30 Lakhs as compared to in 38.48 Lakhs in 2013-14 which is same as last year & warehousing income is 86.98 Lakhs. Thus, total income for 2014-15 amounts to 1.25 crores. For the year ended 31.3.2015 company is into overall Net loss of 17.34 Lakhs as compared to Net profit of 24 Lakhs last year. The major reasons for the loss are: 1. Loan written off of Andhra Pradesh Power Tools Ltd of 25 Lakhs. We had already written off the interest of both the companies ie Andhra Pradesh Power Tools Ltd and Elar Fashion. Now we have written off the principal amount of one company and and will write off the other in the current year to clean off our books of all our old liabilities. 2. Old assets written off as per new companies act amounting to 10.40 Lakhs which belong to period prior to 2007. As can be seen above if these 2 items were excluded we would have been in profits similar to 2013-14. 3. DIVIDEND: In view of the losses suffered by the Company, the Directors regret their inability to recommend dividend for the year under review. 4. OUTLOOK FOR 2015 - 2016: We will be continuing with our Franchisee & warehousing operations and expect to overall grow by at least 25% in the new year. With infrastructure and real estate sector due to grow in the current year with the thrust given by the government the expectation of growth both in franchise and warehouse operations is very high. We have also been very conscious of our expenses, which will be controlled further to bring the company again into profitability state. 5. FIXED DEPOSITS: Your Company has not accepted any deposits from the public or its employees during the year under review. 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. Krishna Prakash Bhardwaj (DIN 00276699) and Ms. Mona Menon (DIN 00117025), Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. During the year, Ms. Rekha Pradeep Nagori (DIN 06945982), has been appointed as an Independent Director for a term of 5 years. Details relating to her appointment is mentioned in the Statement annexed to the Notice under Section 102 of the Companies Act, 2013. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Ms. Mona Menon (DIN 00117025) has been designated as the Chief Financial Officer of the Company as per the definition of Key Managerial Person under section 2(51) and Section 203 of the Act . 7. DETAILS PERTAINING TO EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013: There were no employees covered under provisions under Section 197(12) of the Companies Act, 2013. 8. MEETINGS: This information has been furnished under Report on Corporate Governance, which is annexed 9. BOARD EVALUATION: Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 10. AUDITORS: The members of the Company had, at the 30th Annual General Meeting ("AGM") approved the appointment of M/s Lakhani & Lakhani, Chartered Accountants, Mumbai, bearing ICAI Registration No. 115728W for a period of three years. Ratification of the appointment of Statutory Auditors is to be sought from the members of the Company at the ensuing AGM. In view of the above, the existing appointment of M/s Lakhani & Lakhani, Chartered Accountants, covering the period from the conclusion of the ensuing AGM until the conclusion of the next AGM to be held in the 2016-2017 is being placed for member's ratification. M/s Lakhani & Lakhani, Chartered Accountants, Mumbai, have confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139(1) of the Act read with Companies (Audit and Auditors) Rules, 2014 and that they satisfy the criteria given under Section 141 of the Act. The Audit Committee and Board of Directors recommend the aforesaid appointment. 11. AUDITORS' REPORT: The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 12. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form No. MGT 9 as a part of this Annual Report as Annexure I 13. INTERNAL AUDIT & CONTROLS: During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time. 14. WHISTLE BLOWER POLICY / VIGIL MECHANISM: In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism Policy to deal with instances of fraud and mismanagement. The Vigil Mechanism Policy has been uploaded on the website of the Company. 15. RISK MANAGEMENT POLICY: Risk management policy of the Company promotes a proactive approach in reporting, evaluating and resolving risks associated with the business. Identified risks are used as one of the key inputs for the development of strategy and business plan. The risks are assessed on a periodical basis and it assists the Board of Directors in overseeing the Company's risk management processes and controls. 16. SECRETARIALAUDIT: In terms of Section 204 of the Act and Rules made there under, M/s. JC & Associates, Practicing Company Secretaries have been appointed Secretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure II to this report. The report is self-explanatory and do not call for any further comments. 17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto are disclosed in Form No. AOC-2 as a part of this Annual Report as Annexure III. 18. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS : The provisions of Section 135 of the Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) is not applicable to the Company. 19. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment. 20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows: In view of the nature of activities which are being carried on by the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of Energy and Technology absorption respectively, are not applicable. 21. CORPORATE SOCIAL RESPONSIBILITY (CSR): The provisions of Section 135 of the Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) is not applicable to the Company. 22. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that- 1. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; 2. that your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year; 3. that your Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. that your Directors have prepared the annual accounts on a going concern basis. 5. that your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. 6. that your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 23. LISTING WITH STOCK EXCHANGES: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to the Bombay Stock Exchange, where the Company's Shares are listed. 24. ACKNOWLEDGEMENTS: Your Directors record their grateful appreciation for the encouragement, assistance, co-operation and consistent support received from Members, Dealers, Government Authorities, Dealers, Banks, Financial institutions, Business Partners and Customers. The Board wishes to place on record its appreciation to the contribution made by employees of the Company during the year under review. Your Directors are thankful to all the Stakeholders for their continued patronage. By Order of the Board For Gratex Industries Limited Karan Sharma Managing Director (DIN: 00117188) Place : Mumbai Date : 29.05.2015 |