DIRECTORS REPORT Dear Stakeholders, Your Directors are pleased to present herewith their Report on the business and Operation of the Company together with the Audited financials and Report of Secretarial Auditor for the financial year ended on 31st March, 2015. REVIEW OF OPERATIONS During the year under review the Company has recorded total revenue of Rs. 2538.90 Lacs as compared to Rs. 2092.14 Lacs for the previous year and Net Profit of Rs. 11.19 Lacs for the year as compared to a Profit of Rs. 5.12 Lacs in the previous year. The net profit for this financial year has increased by approximately more than two times on account of increase in the sale volume by 25% and reduction in the Finance cost by 38.07%. The sales for the year under review were Rs. 2344.91 Lacs as compared to Rs. 1880.60 Lacs for the last year. There has been decrease in other income. The other income for the period under review is Rs. 193.99 Lacs whereas the same was Rs. 211.54 - Lacs in the last financial year. Your Company performed better during the year, despite challenging economic conditions, Your Directors is of the opinion that the Company has the immense potential and adequate resources to achieve the rapid rate of growth in the coming years. Your Company hopes to increase its presence in the business in other Geographical Regions in the coming years, which will significantly increase the top line and also its profitability. DIVIDEND The Board of Directors of your Company is of the opinion that during the year Company has not generated much profit and keeping in view the future fund requirements of the Company, your directors do not recommended any dividend for the financial year ended March 31, 2015. The Board assures you to present a much strong financial statements in coming years. CHANGE IN SHARE CAPITAL During the year under consideration there was no change in the Authorised Share Capital of the Company however the Company has allotted Equity shares on the preferential basis to the promoters and non promoters in the month of May in the financial year 2014-15 in respect of which the application money has been received by the Company in 2012. The Equity shares allotted as aforesaid has been listed on the BSE Limited and Delhi Stock Exchange Limited. Your Company has complied with all the applicable laws regarding the issue, allotment and listing of Equity Shares on preferential basis. AUDITORS The Members of the Company had at its 21st Annual General Meeting held on 30th September 2014 approved the appointment of M/s. PVSP & Co., (Formerly Bhatia Praveen & Co.), Chartered Accountants having registration No. 08940N as the Statutory Auditor of the Company, upto the conclusion of Annual General Meeting (AGM) to be held in the financial year 2018-19 and offer themselves for re-appointment. The said Auditors have furnished the Certificate of their eligibility for re-appointment. In view of the rule 3(7) of Companies (Audit and Auditors) Rules, 2014, the existing appointment of M/s. PVSP & Co., (Formerly Bhatia Praveen & Co.), Chartered Accountants, covering the period from the conclusion of this ensuing AGM until the conclusion of the next Annual to be held in the financial year 2016-17, is being placed - for members' ratification. The Board recommends the appointment of M/s PVSP & Co., Chartered Accountants the Statutory Auditors of the Company till the financial Year 2016-17 subject to ratification of their appointment at every AGM. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under, as may be applicable. AUDITOR'S REPORT The Auditor's Report dated 30th May 2015 on the financials statements of the company for the financial year 2014-15. The explanation to the qualification of Statutory Auditor is as follows: Auditors Qualification: We are unable to give our comments on the amount given for purchase of the property of Rs.129.39 lacs & corporate advance of Rs.27.34 lacs due to lack of audit evidence. Management Reply: Management is taking appropriate steps to substantiate the transactions undertaken to the satisfaction of Auditor in respect of which Auditor has provided qualified opinion. SECRETARIAL AUDITOR The Board has appointed MB & Co., Company Secretaries, to conduct Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2014-15. SECRETARIAL AUDITORS' REPORT The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith and marked as Annexure I to this Report. Explanation to the Observation of Secretarial Auditor is as follows: Observation of Auditors: The Board of Directors of the Company is duly constituted and there was no appointment of Company Secretary as required under section 203 of the Companies Act 2013. Directors' Explanation: Company has not appointed Company Secretary as required under section 203 of the Companies Act 2013 and the rules made there under during the year under review, as Company is in process appropriate and competent person to hold the post of Company Secretary. Observation of Auditors: During the audit period, the Company changed the designation of Mr. Yashpal Sharma and Mr. Pankaj Gupta at its Annual General Meeting but no form regarding change in designation of the said directors has been found at the MCA Site, Ministry of Corporate Affairs, Government of India. Directors' Explanation: Mr. Yashpal Sharma and Mr. Pankaj Gupta were appointed as the Independent Directors of the Company on 1st October 2003. After the implementation Companies Act 2013 there appointment was formalized by fixing the tenure of independent directors with the approval of Shareholders in the Annual General Meeting held on 30.09.2014 and there was no change in designation of the said directors was made. Therefore no form was required to be filed with Registrar of the Companies. Observation of Auditors: During the audit period, the Company had availed loans from - Banks and/ or Financial Institutions but the forms with respect to creation/ modification and/ or satisfaction of charges were not found at the MCA Site, Ministry of Corporate Affairs, Government of India. Directors' Explanation: The Management is taking necessary steps to file the required with Registrar of Companies which was missed out inadvertently. INTERNAL AUDITORS Company has appointed Mr. Rajiv Kumar Rattan, Chartered Accountants, Ghaziabad having Membership No. 510170 as the internal auditor for the purpose of conducting of the operation of the Company. DIRECTORS AND KEY MMANAGERIAL PERSONELL APPOINTMENT AND RESIGNATION During the financial year 2014-15, Mrs. Megha Agarwal was appointed as additional Non Executive Director of your Company at the meeting of the Board of Directors held on 23rd March, 2015 and her tenure was upto the ensuing AGM and subsequently to be appointed as a Non Executive Director by the shareholders at the AGM to be held on 30th September, 2015. Further during the year Mr. Dinesh Kumar Dwivedi has resigned from the Directorship of the Company on 4th September 2014. In accordance with the requirements of the Companies Act, 2013 the Directors liable to retire by rotation shall not include Independent Directors and Additional Director, hence the number of Directors whose office is liable to retire at the annual general meeting are 3 namely: 1. J.B. Aggarwal 2. Shailesh Gupta 3. Tarun Aggarwal Mr. Shailesh Gupta the Director of the Company retires by rotation and being eligible offer himself for Re- appointment. CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY Pursuant to the provisions of Section 203 of the Companies Act, 2013, Company has Designated Mr. Tarun Aggarwal Whole Time Director of the Company as the Chief Financial Officer of the Company but Company has not appointed any Company Secretary during the Year. Please refer to the explanation to the Observation offered by Secretarial Auditor. BOARD EVALUATION The Board of Directors has carried out an annual evaluation of its own performance and individual directors pursuant to the provisions of the Companies Act, 2013. The performance of the Board was evaluated by the Board on the basis of the criteria such as the Board composition and structure, effectiveness of Board process, information and functioning etc. The Board and Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of individual director to the Board and committee meetings like preparedness on the issue to be discuss, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent directors, performance of non-independent director, performance of the Board as a whole and performance of Chairman was evaluated. EFFICIENT INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY - Adequate internal controls have been laid down by the Company to safeguard and protect its assets as well as to improve the overall productivity of its operations. All the transactions are properly authorized, recorded and reported to the management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The detailed process of review not only ensures reliability of control systems and legal compliances with applicable legislation, defined policies and processes but also reviews efficiency of systems and ensures safeguarding of tangible and intangible assets. NOMINATION & REMUNERATION POLICY The Board of Directors, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration as required under Section 178 of the Companies Act, 2013. The Nomination & Remuneration Policy of the Company is annexed herewith and marked as Annexure II to this Report. RISK MANAGEMENT The Company has a Risk Management Manual in place that defines the policies, lays out the strategies and methodology to decide on the risk taking ability of the organization. The Company constantly reviews its exposure to various types of risk, whether it be regulatory, operational, environmental, financial or political. The Company has in place adequate systems to ensure compliance with all regulatory and statutory matters, reviews the same on a periodic basis and takes appropriate corrective action when necessary. DIRECTOR'S RESPONSIBILITY STATEMENT The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of the annual accounts for the year ended 31st March, 2015 and state that: a. in the preparation of the annual accounts for the financial year ended on 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. the directors had 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 profit and loss of the company for that period; c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. the directors had prepared the annual accounts on a going concern basis; e. the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. PARTICULARS OF EMPLOYEES During the year under review no employee is covered as per rules 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, therefore no statement is required be given showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are - not applicable. PARTICULARS OF REMUNERATION The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15: ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2014-15: Company has not appointed any Company secretary during the year under review. Mr. Tarun Aggarwal is Director Finance and Compliance officer of the Company. iii) the percentage increase in the median remuneration of employees in the financial year 2014-15: 37.50% iv) the number of permanent employees on the rolls of company: 27 v) the explanation on the relationship between average increase in remuneration and company performance: During the period under review the increase in the remuneration is 25.54% and the revenue of the Company increased by 25% and the net profit has been increased to two time in comparison to profit in previous financial year ended on 31.03.2014. vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: The Remuneration is being paid in Key Managerial personnel to Mr. Jai Bhagwan Aggarwal, Managing Director of the Company and Mr. Tarun Aggarwal, Whole Time Director (Finance). Remuneration paid to Mr. Jai Bhagwan Aggarwal and Mr. Tarun Aggarwal during the period under review is Rs. 600000 and Rs. 480000. The Performance of the Company has improved drastically during the period. Total Revenue of the Company increased by 21.38% whereas the profit before tax and after tax has been almost doubled. vii) variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer, the variations in the net worth of the Company as at the close of the current financial year and previous financial year: viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The average percentage increase in the remuneration of the employees other than Key Managerial Personnel is 37.50 and the increase in the remuneration of Key Managerial Personnel is 33.33%. ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company: xi) the ratio of remuneration of the highest paid Director to that of the employees who are not Directors but receivable remuneration in excess of the highest paid director during the year: There is no employee in the Company who is in receipt of the remuneration more than Director. xii) affirmation that the remuneration is as per the remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the Nomination and Remuneration Policy of the Company. LISTING ON THE STOCK EXCHANGE The Equity shares of the Company are listed at BSE Limited and Delhi Stock Exchange Limited. The trading in to the equity shares of the Company is active on the BSE Limited under B Group. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There were no contracts or arrangements entered into by the Company in accordance with the Section 188 of the Companies Act, 2013. However, there were related party transactions. All related party transactions that were entered by the Company during the financial year were on an arm's length basis. All related party transactions are presented to the Audit Committee and the Board for approval. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board can be accessed on the Company's website at the link: www.Kuwerindustries.com The details of the transactions with related party are provided in the accompanying financial statements. CORPORATE GOVERNANCE Your Company believes and preached the Corporate Governance practices which are in line with legal requirements of Clause 49 of listing agreement and Companies Act 2013. The Company has adopted the practices which are prevalent in the industry. Further Securities and Exchange Board of India vide its Circular (Circular No. CIR/CFD/Policy Cell/7/2014) dated 15th September 2014 has exempted certain Companies from mandatory Compliance of provision of clause 49 of listing agreement entered in to with the Stock Exchange where the Share of the Company are listed. In terms of said circular every Company which has paid up capital less than Rs. 10 Crore and Net worth less than Rs. 25 Crore are exempted from complying with the provisions of clause 49 of listing agreement. The Paid up capital of you company is Rs. 9.08 Crore and Net worth is Rs. 16.84 Crore therefore your Company is exempted from the complying with the provision of clause 49, however your director assure you that your company will continue to follow the good corporate governance practices. The separate section on corporate governance is being discontinued and director shall inform the stakeholders in the Board Report section. COMMITTEES OF THE BOARD The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the Board function according to their respective roles and defined scope: • Audit Committee • Nomination and Remuneration Committee - • Stakeholder Relationship Committee DISCLOSURES: A) EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure-III to this Report. B) MEETINGS OF THE BOARD During the financial year ended March 31, 2015, 10 meetings of the Board of Directors were held as against the statutory minimum requirement of 4 times. None of the two Board Meetings have a gap of more than 120 days between them. The dates of meetings are mentioned below: C) COMPOSITION OF AUDIT COMMITTEE The Audit Committee as on date comprises of three members, including one is Whole-Time-Director viz. Tarun Gupta and two are Non executive Independent director viz. Yashpal Sharma, Mr. Pankaj Gupta. Mr. Pankaj Gupta is heading the Committee. D) VIGIL MACHANISM/WHISTLE BLOWER POLICY Pursuant to Section 177 of the Companies Act, 2013, the Board of Directors at its meeting held on 30th May, 2014 has adopted a vigil mechanism/whistle blower policy of the Company. The policy provides a framework for directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. Protected disclosures can be made by a whistle blower through an email or to the Chairman of the Audit Committee. The vigil mechanism/whistle blower policy can be accessed on the Company's website at the link: www.Kuwerindustries.com. E) DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance towards sexual harassment at workplace and during the year under review, your Board has constituted an Internal Complaints Committee to consider and redress complaints of sexual harassment & also adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2014-15, the Company has received no complaints on sexual harassment. F) PATICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN AND SECURITY PROVIDED Particulars of loans given, investments made, guarantees given and securities provided in the financial statements. G) GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Companies Act, 2013. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. The Managing Directors of the Company did not receive any remuneration or commission from subsidiary. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. SUBSIDIARY & ASSOCIATE COMPANY The Company does not have any subsidiary and associate Company. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO. Information required to be given pursuant to section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 and forming part of the Director's report for the year ended 31st March, 2015 are given below : A. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION The provisions related conservation of energy does not apply to the Company, therefore, the information as provided in Performa given in Form A under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is not given. However, the Company is conscious about its responsibility to conserve energy, power and other energy sources wherever possible. We emphasis towards a safe and clean environment and continue to adhere to all regulatory requirements and guidelines. The Company has been taking energy saving measures viz., Use of energy saver electrical equipments, CFL fittings are provided inside the building for common area lighting in the projects of the Company, Efficient ventilation system in offices and the projects of the Company. Moreover, your company emphasis towards a safe and clean environment and continue to adhere to all regulatory requirements and guidelines. B. RESEARCH & DEVELOPMENT Your company has not undertaken any research and development work during the year 2014-15. However, in order to minimize its cost and increase the quality of its projects, your Company is trying to maintain highest standard of quality. APPRECIATION Directors wish to place on record their deep thanks and gratitude to; a) The Central and State Government as well as their respective Departments and Development Authorities connected with the business of the Company, Bankers of the Company, Housing Finance as well as other Institutions for their co-operation and continued support. b) The Shareholders, Depositors, Suppliers and Contractors for the trust and confidence reposed and to the Customers for their valued patronage. c) The Board also takes this opportunity to express its sincere appreciation for the efforts put in by the officers and employees at all levels in achieving the results and hopes that they would continue their sincere and dedicated Endeavour towards attainment of better working results during the current year. For & on the behalf of the Board of Directors of Kuwer Industries Limited Regd. Office: D-1004, Ist Floor New Friends Colony, New Delhi 110065 Date: 02.09.2015 Place: New Delhi Sd/-Tarun Aggarwal Whole Time Director DIN:01320462 Sd/-J.B. Aggarwal Managing Director DIN:00315184 |