DIRECTORS' REPORT TO SHAREHOLDERS To the Members, The Directors have great pleasure in presenting their 24th Report along with the audited financial statement for the financial year ended March 31 , 2015. PERFORMANCE OF THE COMPANY During the year, the Company has incurred loss of Rs. 12.25 Lakhs. The Board of Directors expect better performance in its operations in the ensuing financial years. BUSINESS PROSPECTS The Company is looking for new business opportunities and is exploring all possible avenues to increase its operations and profitability. DIVIDEND Due to non-availability of profits during the financial year, your Directors do not recommend any dividend for the financial year 201 4-201 5. SHARE CAPITAL During the year, your Company has not made any allotment, subsequent to which there is no change in the share capital of the Company. TRANSFER TO RESERVES The Company has incurred loss and has carried the losses to Profit & Loss Account and hence no transfer to General Reserve was made during the Year. FINANCE Cash and cash equivalent as at March 31 , 201 5 amounted to Rs.1 ,31 ,735/-. DEPOSITS The total amount of fixed deposits from public outstanding and unclaimed as at 31st March, 2015, was Rs.30,42,916/- PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 During the year the Company has not given any loans. The outstanding loans and advances which includes a sum of Rs.216.92 lakhs (Rs.216.92 lakhs) advanced to certain companies out of which a sum of Rs.117.01 lakhs (Rs. 117.01 lakhs) is to a subsidiary company. Particulars of investments covered under Section 186 form part of the notes on financial statements provided in this Annual Report. The Company has not made fresh investments during the year. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board has not appointed any directors during the financial year. Neither any of the Directors has resigned during the financial year. Re-appointments As per provisions of the Companies Act, 2013, Mr. R.Ramesh is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment. Mr. K.Chandrasekaran has been proposed to be appointed as Managing Director of the Company for a period of five years with effect from 1 * October, 2015. The Board recommends his appointment. Declaration by Independent Directors The Company has received declarations from all its Independent Directors 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 in respect of the financial year ended March 31,2015. BOARD MEETINGS HELD DURING THE FINANCIAL YEAR During the year 5 (Five) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. BOARD COMMITTEES Currently the Board has three committees; the Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee. Details of recommendations of Audit Committee which were not accepted by the board along with reasons The Audit Committee generally make certain recommendations to the Board of Directors of the Company during their meetings held to consider any financial results (Unaudited and Audited) and such other matters placed before the Audit Committee as per the Companies Act 2013 and Listing Agreement from time to time. During the year the Board of Directors has considered all the recommendations made by the Audit Committee and has accepted and carried on the recommendations suggested by the Committee to its satisfaction. Hence there are no recommendations unaccepted by the Board of Directors of the Company during the year under review. DETAILS OF POLICIES DEVELOPED BY THE COMPANY (i) Nomination and Remuneration Policy The Company has formulated the Nomination and Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Clause 49 of the Listing Agreement, as amended from time to time. The objective of this policy is to ensure: • The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully; • Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and • Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance with short and long-term performance objectives appropriate to the working of the Company and its goals. This policy is being governed by the Nomination and Remuneration Committee comprising of three members of the Board, all of whom are Non-Executive and Independent Directors. The policy lays down the standards to be followed by the Nomination and Remuneration Committee with respect to the appointment, remuneration and evaluation of Directors and Key Management Personnel. (ii) Board Diversity The Company recognizes and values the importance of a diverse board as part of its corporate governance and success. The Company believes that a truly diverse Board will leverage differences in ideas, knowledge, thought,' perspective, experience, skill sets, age, ethnicity, religion and gender which will go a long way in retaining its competitive advantage. The Board has on the recommendation of the Nomination and Remuneration Committee, adopted a Board Diversity Policy which sets out the approach to diversity of the Board of Directors. (iii)Whistle-Blower Policy-Vigil Mechanism The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism provides a channel to the Employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or Policy. The mechanism provides for adequate safeguards against victimization of employees and directors to avail of the mechanism and also provide for direct access to the Chairman of the Board/Chairman of the Audit Committee in exceptional cases. In line with the statutory requirements, the Company has formulated a Whistle Blower Policy/Vigil Mechanism, which covers malpractices and events which have taken place / suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, violation of Company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is or is likely to be affected and formally reported by whistle blowers concerning its employees. STERLING HOLIDAY FINANCIAL SERVICES LIMITED The Managing Director is responsible for the administration, interpretation, application and review of this policy. The Managing Director is also empowered to bring about necessary changes to this Policy, if required at any stage with the concurrence of the Audit Committee. The mechanism also provides for access to the Chairman of the Audit Committee in required circumstances. EVALUATION OF BOARD, COMMITTEE AND DIRECTORS The Company on getting members approval for appointment of Independent Directors, will do formal evaluation of the Board during the calendar year 2015. TRAINING AND FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS The Company on getting members approval for appointment of Independent Directors, will arrange to provide training and familiarization programme. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR. During the year, no company has become or ceased to be the subsidiary, joint venture or associate company, Whereas, the detailed report on Subsidiaries and Associate Companies is attached as Annexure • 1 in Form AOC-1 and forms part of this report. AUDITORS Financial Auditors At the Annual General Meeting held on 27* September, 2014, Mr. P.Chandrasekar, Chartered Accountants (Firm Registration Number 000580S), Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the matter of appointment of the auditors shall be placed for ratification at every Annual General Meeting of the Company. Accordingly, the appointment of Mr. P.Chandrasekar, Chartered Accountants (Firm Registration Number 000580S), as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that their appointment is ratified by the shareholders, it would be in accordance with the provisions of Section 141. Explanation to Statutory Auditor's remarks With reference to the observations made by the Auditors in their report, your Directors wish to explain and clarify the position hereunder: 1. In respect of advances aggregating to Rs. 216.92 lakhs towards investment in shares in certain companies including subsidiary company, the Company is considering all the proposed investments as long-term investments. In the opinion of the Directors, no provision is therefore considered necessary and wherever possible, steps are being taken to recover the amounts. 2. In respect of investments in quoted and unquoted shares, the investments are long term in nature and hence valued at cost. Hence no provision for diminution in value is considered necessary. 3. The Company has initiated legal action for recovery of its dues and is confident of recovery. Hence, provisioning has not been considered necessary to the extent required as per RBI guidelines. 4. The observation on non provisioning of interest on deposits is self explanatory. 5. In view of the current financial position of M/s. Sterling Holiday Resorts (India) Limited and its plan to refurbishing the existing resorts and completion of new resorts your Company is confident in realizing the amount invested in Sterling Happy Vista Timeshare units allotted by them in settlement of Hire Purchase facilities extended to them. 6. The Company is planning to revive the business and is taking steps to improve its profitability in the ensuing years. Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mis. S Dhanapal & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2014-2015 is annexed herewith as marked as Annexure - 2 and forms part of this report. Explanation to Secretarial Auditors' Remarks The Company does not have any operations and hence has not appointed a Company Secretary, Internal Auditor. Once the operational performance of the Company improves, it will appoint company secretary and internal auditor. The Company has appointed women director on the Board at its meeting held on 03.09.2015. The Company is bringing resolution in the current AGM for getting their approval for appointment of Independent Directors. Once Independent directors are appointed, formal evaluation of Board by Independent Director and training programme for Independent Directors will be organised by the Company. With regard to certain delay in filings, non filings and advertisements to be given under various regulations, the Company will take necessary steps to ensure that such events are not happening in future. PARTICULARS OF EMPLOYEES AND REMUNERATION Details as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below: (i) Details of the employees employed throughout the year and drawing remuneration which in the aggregate exceeds Rupees Sixty Lakhs or more per annum, during the financial year. During the year, no employees were in receipt of remuneration exceeding Rupees Sixty Lakhs in aggregate, per annum. (ii) None of the employees employed for a part of the financial year, was in receipt of remuneration for any part of that year, which, in the aggregate exceeds Rupees Five Lakhs per month, during the financial year. (iii) None of the employees except Managing Director hold by himself or along with his/her spouse and dependent children, more than two per cent of the equity shares of the Company. Number of permanent employees on the rolls of the company as on 31.03.2015 The number of permanent employees on the rolls of the Company as on 31" March, 2015 stood at 2 employees. Explanation on relationship between average increase in remuneration and Company performance Since there was no increase in remuneration given during the year to employees it does not have impact on Company's performance. Variations in Market Capitalisation of the Company There has been no trading in the shares on any of the stock exchanges during the year under review and hence this data has not been provided. 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 There was no increment found in salaries of the employees in your Company during the financial year. Key parameters for any variable component of remuneration availed by the directors During the year, none of the directors were in receipt of remuneration. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year There are no employees who receive remuneration in excess of the highest paid Director during the year. Percentage increase in the median remuneration of employees in the financial year During the year, none of the employees were in receipt of remuneration. Details of pecuniary relationship or transactions of the non-executive directors vis-a-vis the Company (required as per clause 49 of listing agreement) Directors are not getting any sitting fee till now and they do not have any pecuniary relationship or transactions with the Company. ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Company does not have any operations during the year and hence this may not be applicable to the Company. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company does not have any female employee and hence this may not be applicable to the Company. 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 there are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2015 TILL THE DATE OF THIS REPORT There are no material Changes and commitments affecting the financial position of the Company which has occurred since 31.03.2015 till the date of this report. EXTRACT OF ANNUAL RETURN An extract of the Annual Return in form MGT-9 is annexed herewith as marked as Annexure - 3 and forms part of this report. RELATED PARTY TRANSACTIONS As required under clause 49 of the Listing Agreement, the Company has developed a policy on dealing with Related Party Transactions. The details of Related Party Transactions are provided in the Notes to the Accounts. CORPORATE GOVERNANCE The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the listing agreement with the stock exchanges. A report on Corporate Governance including Management Discussion and Analysis report under the Listing Agreement along with a certificate from Mis. S Dhanapal Associates, a firm of Practising Company Secretaries, confirming the compliance is annexed herewith marked as Annexure - 4 and forms part of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The details on Conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed herewith as marked as Annexure -5 and forms part of this report. DIRECTOR'S RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i. In the preparation of the annual accounts, the applicable accounting standards have been followed. ii. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. iii. The directors have 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. iv. The directors have prepared the annual accounts on a going concern basis. v. 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. vi. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. DEPOSITORY SYSTEM As the members are aware, your Company's shares are in physical form and the Company does not have connectivity with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Once the operations are improved, the Company will establish connectivity and make the shares available in electronic form. ACKNOWLEDGEMENTS The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, bankers and other Central and State Government Agencies for the continued support given by them to the Company and their confidence reposed in the management. The Directors appreciate and value the contributions made by every member of the Company. For and On behalf of the Board of Directors K CHANDRASEKARAN MANAGING DIRECTOR K. PURUSHOTHAMAN DIRECTOR Chennai 3rd September, 2015 |