DIRECTORS' REPORT TO, THE MEMBERS SPARC SYSTEMS LIMITED The Directors present the Annual Report together with the Audited Statement of Accounts of the Company for the year ended March 31, 2015. Financial summary of the Company is as below RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS The Company's line of business involves Software and Hardware Electronic Security Solutions. The Company has reported a gross income of Rs.6.95 lacs for the current year as compared to Rs. 18.44 lacs in the previous year. The Company has incurred a net loss amounting Rs. 67.13 in the current year as compared to Rs. 23.79 in the previous year. The Management intends to continue to pursue its product lines. The Company continues to leverage its exiting technologies and continues to add several new clients covering different industry segments. Due to the various reforms undertaken by the Government, the economy is expected to do well over next several years and the industry expects that markets in India will do well and the Directors are also optimistic about Company's business and hopeful of better performance in next year. CHANGE IN THE NATURE OF BUSINESS There is no change in the nature of the business of the Company. DIVIDEND No dividend was declared for the current financial year due to loss incurred by the Company. TRANSFER TO RESERVES The Company has not transferred any amount to reserves. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND The Company was not required to transfer any amount to unclaimed dividend to investor education and protection fund. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE During the year under review there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. STATUTORY AUDITOR M/s. R Soni & Co., Chartered Accountants, Mumbai (ICAI Registration Number 130349W), were appointed as Statutory Auditors at the 25th Annual General Meeting of the Company, for a term of three consecutive financial years i.e. for 2014-2015 to 2016-2017 and they shall hold office till the conclusion of the 28th Annual General Meeting of the Company to be held in the year 2017, subject to ratification by the shareholders at every Annual General Meeting. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORT There was no qualifications, reservations or adverse remarks made by the Auditors in their report. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Ms. Alka Jain, Practicing Company Secretary (ACS 17219; CP No. 5519), Mumbai, has been appointed to conduct a Secretarial Audit of the Company's Secretarial and related records for the year ended March 31, 2015. The Practicing Company Secretary has submitted her Report on the Secretarial Audit conducted by her which is annexed to this Report. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE SECRETARIAL AUDITOR IN THEIR REPORT The Board has noted that pursuant to the provisions of Section 203 of The Companies Act, 2013, the Company was required to appoint Whole-time Company Secretary however the same has not been complied with as yet. Management is under process of appointing a suitable company secretary for compliance of said provision of Companies Act. CASH FLOW STATEMENT The Cash Flow Statement for the period ended 31st March, 2015, in conformity with the provisions of Clause 32 of the Listing Agreement entered with the Stock Exchanges, is annexed hereto. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. J T D'souza, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Mr. Amit Bothra, (DIN: 01269396) Non-Executive Independent Director of the Company, has tendered his resignation from the Board of the Company with effect from July 31, 2015. The Board at its meeting held on August 13, 2015 took note of the same. The Board wishes to place on record appreciation of the valuable services rendered by Mr. Amit Bothra during his tenure. Mr. Ashok Jain (DIN: 03013476), was appointed as an Additional Independent Director on the Board of the Company on August 13, 2015. In accordance with the requirements of Section 149 and 152 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, his continuation as an Independent Director on the Board of the Company will have to be approved by the Members of the Company. The requisite resolutions for the appointment of Mr. Ashok Jain as Independent Director, are being proposed in the Notice of the ensuing Annual General Meeting for approval of the Members. As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of the Directors proposed for appointment has been provided in the Notice of the Annual General Meeting. The Board recommends for shareholders' approval, the re-appointment of Mr. J. T. D'souza as Managing Director and Ms. Punit Neb, as Whole-time Director to be liable to determination by rotation for 3 years w.e.f. December 1, 2015. DECLARATION BY INDEPENDENT DIRECTORS The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013. The Company has also provided suitable training to the Independent Directors. DEPOSITS The Company has not invited / accepted any deposits from the public during the year ended March 31, 2015. There were no unclaimed or unpaid deposits as on March 31, 2015. CORPORATE SOCIAL RESPONSIBILITY The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013. NUMBER OF BOARD MEETINGS The Board met 6 times in financial year 2014 - 2015. The maximum interval between any two meetings did not exceed 120 days. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under section 134(3)(C) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that: i. In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. 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 as at March 31, 2015 and of the profit and loss of the Company for that period; iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv. The Directors had prepared the annual accounts on a going concern basis; and v. They have laid down internal financial controls in the Company that are adequate and are operating effectively; and vi. 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. NOMINATION AND REMUNERATION COMMITTEE AND ITS POLICY The Nomination and Remuneration Committee, constituted by the Board of Directors pursuant to Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. consists of three Directors namely Mr. Santosh Shetty Chairman, Mr. Bharat Jain and Mr. Anand Jain, Members. Mr. Santosh Shetty and Mr. Bharat Jain are Independent Directors. The committee is responsible to identify persons who are qualified to become directors or senior management employees and recommend to the Board their appointment/removal, oversee and administer executive compensation etc. The Company has formulated the remuneration policy. The details of this policy are available on the Company's website www.sparcsys.com PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 During the year under review, the Company has not advanced any loans, nor given any guarantees nor made any investments. PARTICULARS OF EMPLOYEES None of the employee has received remuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. EXTRACT OF THE ANNUAL RETURN IN FORM MGT - 9 Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014. is annexed and forms a part of this report. RELATED PARTY TRANSACTIONS There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed and forms a part of this report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint Venture or Associate Company as on March 31, 2015. RISK MANAGEMENT POLICY The Company has in place adequate controls with reference to implementation, monitoring, assessing and resolving risk management policy. For each o the risk identified, corresponding controls are assessed and policies and procedure are in place for monitoring, mitigating and reporting risk on a periodic basis. In the opinion of the Board, none of the risks faced by the Company threaten its existence. ADEQUACY OF INTERNAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation were observed. AUDIT COMMITTEE The details pertaining to composition of Audit Committee and its members are included in the Corporate Governance Report which is annexed and forms a part of this Report. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has an established mechanism for Directors / Employees to report concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or ethics policy. It also provides for adequate safeguards against victimization of directors/employees who avail of the mechanism. The Company affirms that no personnel has been denied access to the audit committee. The Company has formulated a Policy of Vigil Mechanism and has established a mechanism that any personnel may raise Reportable Matters within 60 days after becoming aware of the same. All suspected violations and reportable matters are reported to the Chairman of the Audit Committee. The key actions / directions are informed to the Managing Director of the Company. LISTING FEES The Company has paid the listing fees for the year 2014-2015 to Bombay Stock Exchange Ltd. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A report on Management Discussion and Analysis for the year under review is annexed and forms a part of this report. CORPORATE GOVERNANCE Detailed notes on Corporate Governance and other such disclosures as are required to be made under the Listing Agreement with the Stock Exchanges, are annexed and form part of this Report. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is annexed and forms a part of this Report. SHARES During the year under review, the Company has not increased its share capital, bought back securities, issued sweat equity, bonus shares or employees stock option plan. ACKNOWLEDGMENTS The Directors acknowledge with gratitude the co-operation and assistance extended to the Company by Shareholders, Employees, Customers, Bankers, Auditors, Company Secretaries, Registrar & Share Transfer Agents and Vendors. For and on behalf of the Board J. T. D'souza Chairman & Managing Director DIN 00958844 Place : Mumbai, date : August 13, 2015 |