DIRECTORS' REPORT To, The Shareholders of SHREENATH INDUSTRIAL INVESTMENT COMPANY LIMITED. The Directors of Your Company are pleased to present the 32nd Annual Report together with the Audited Accounts of the company for the financial year ended on 31st March 2015.: RESULT OF OPERATIONS AND STATE OF AFFAIRS The Year gone by has been a good year with company closing on a profitable note. The total Income of the company for the year under review is Rs. 151.73 Lacs. The Profit before Tax stood at Rs. 4.07 Lacs and Profit After Tax stood at Rs. 2.84 Lacs. Trading in Fabrics and Interest Income from the financing of Project & Advances has continued to yield good results. Your Directors are glad to inform you that financial year 2014-2015 has been a successful year for the company. DIVIDEND Your directors regret to inform you that we do not recommend any dividend for the year to strengthen the position of the company. DIRECTORS Mr. Uday Gherwada & Mr. Bhargav Shah has been appointed on the Board on 22nd September, 2014 and Ms. Priya Shetty has been appointed on the Board on 1st November, 2014 as Additional Director. As per the provisions of Companies Act, 2013 All the Additional Director are to be regularized in the forthcoming Annual General Meeting of the Company. Mr. Uday Gherwada is proposed to be appointed as Independent Director for the terms of 5 year and Mr. Bhargav Shah is proposed to be appointed as Executive Director from the Conclusion of 32nd Annual General Meeting of the Company. Mr. Bhargav Shah Also appointed as CFO of the Company by the Board on its meeting held on 29th January, 2015. Your approval is sought for their appointment as detailed in the Notice convening the Meeting. Ms. Priya S Shetty, who was appointed as an Additional Director on the Board is proposed to be resigned from the board in the 32nd Annual General Meeting due to her pre-occupation. Board appreciate her contribution during his tenure and association with the Company. Also the Company doesn't received any notice under section 160(1) proposing her candidature as Director. Your approval is sought for their appointment as detailed in the Notice convening the Meeting. Due to the resignation of Ms. Priya Shetty from the Board, Company has to appoint one Women Director on the Board as per the provision of Companies Act, 2013. The Board has decided to appoint Mrs. Rani Ajay Jha with effect from 32nd Annual General Meeting, as an Independent Woman Director. Your approval is sought for their appointment as detailed in the Notice convening the Meeting. Mr. Kailash jangid was appointed on the Board of the Company as Managing Director & CEO on its meeting held on 29th January, 2015, with effect from 1st December, 2014 subject to your approval in 32nd Annual General Meeting of the Company at the remuneration recommended by the nomination and remuneration committee and approved by the Board. Your approval is sought for their appointment as detailed in the Notice convening the Meeting. 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 and clause 49 of the Listing Agreement. As required under Clause 49 of the Listing Agreement with the Stock Exchange, the information on the particulars of the Directors proposed for appointment/ re-appointment has been given in the Notice of the Annual General Meeting. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Shareholder Grievance Committee. DEPOSITS The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet or renewed any fixed deposits during the year. LOANS, GUARANTEES AND INVESTMENTS The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (the Act) are given in the notes to the Financial Statements. (Not applicable being a Non-Banking Finance Company. ALTERATION IN PAID-UP SHARE CAPITAL During the year Company has made a preferential allotment of 22,55,000 Equity shares of Rs. 10/- each on 6th may, 2014 and 7,45,000 Equity shares of Rs. 10/- each on 18th September, 2014. The issued, subscribed and paid up share capital of the Company as on 31st March, 2015 stood at Rs. 3,40,00,000/-Comprising of 34,00,000 Equity shares of Rs. 10/- Each. MEETINGS OF THE BOARD During the year under review, Nine meetings of the Board of Directors were held as against the minimum requirement of four meetings. Board meetings were held on6th May, 2014; 22nd July, 2014; 18th September, 2014; 22nd September, 2014; 29th September, 2014; 16th October, 2014; 29th October, 2014; 01st November, 2014 & 29th January, 2015 . The Thirty First Annual General Meeting was held on 14th August, 2014. The maximum time gap between any two consecutive meetings did not exceed 120 days. PARTICUALRS OF EMPLOYEES: Disclosures pertaining to remuneration and other details as 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 are provided in the Annual Report. In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered address of the company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full annual report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the company's website. DIRECTORS' 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 and Clause 49(III)(D)(4)(a) of the listing agreement with Stock Exchanges in the preparation of the annual accounts for the year ended on March 31, 2015 and state that : (i) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any; (ii) That 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 Profit of the Company for the year under review; (iii) That the Directors have 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) That the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a Rs.going concern' basis. (v) The director have laid down internal financial control to be followed by the company and the such internal controls are adequate and are operating effectively; and (v) There is proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. AUDITORS: Statutory Auditor At the Thirty First Annual General Meeting held on 14th August, 2014, M/s. Motilal & Associates, Chartered Accountants, Mumbai, were appointed as the Statutory Auditors of the Company to hold office from the conclusion of that AGM until the conclusion of the 5th Consecutive Annual General Meeting to be held thereafter (subject to ratification of the appointment by the Members at every AGM held after that AGM). In terms of the first proviso to Section 139 of the Act read with the Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, the appointment of the auditor shall be subject to ratification by the Members at every annual general meeting till the expiry of the term of the Auditor. Accordingly, the appointment of M/s. Motilal & Associates, Chartered Accountants, Mumbai, as the Statutory Auditors of the Company, is placed for ratification by the Members. 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 VKM and Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith marked as Annexure II to this Report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark. The notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further Comments. The auditor's report does not contain any qualification, reservation and adverse remark. DISCLOSURES Audit Committee The Board of Director of the Company at its meeting held on 29th January, 2015 reconstitute the Audit Committee of the Company. The Audit Committee comprises of Mr. Rajesh Agarwal(Chairman), Mr. Kailash Jangid and Mr. Uday Gherwada as other members. The Audit Committee played an important role during the year. It coordinated with the Statutory Auditors, Internal Auditors and other key personnel of the Company and has rendered guidance in the areas of internal audit and control, finance and accounts. All the recommendations made by the Audit Committee were accepted by the Board. Four meetings of the Audit Committee were held during the year. Nomination & Remuneration Committee The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Key Managerial Personnel, Directors and the remuneration packages payable to them and other employees. The Nomination and Remuneration Committee met Three times during the year. Shareholders/Investor Grievance Committee During the year Board of Director of the Company at its meeting held on 29th January, 2015 constitute the Shareholders/ Investor Grievance Committee comprise of Mr Rajesh Agarwal as a chairman, Mr. Kailash jangid & Ms. Priya shetty as other member of the Committee. There is no complaints notice during the year. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and that the provisions of Section 188 of the Companies Act 2013 are not attracted. Thus, disclosure in form AOC-2 is not required. Further, there are no materially significant related party transactions made by the Company with Promoters and Directors or other designated persons which may have a potential conflict with the interest of the Company at large. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure I. RISK MANAGEMENT POLICY The Company follows a proactive risk management policy, aimed at protecting its assets and employees while at the same time ensuring growth and continuity of its business. The Company has put in place adequate risk identification, risk management and mitigation processes to keep any such trade-off at bay. Regular updates are made available to Board at the Board Meetings and in special cases on ad-hoc basis. Nevertheless, there are certain fundamental risks glued to lending business such as Credit Risk, Business/Market Risk and Operational Risks. The Company has instituted clear strategies to mitigate these: Credit Risk The Company maintains a well-diversified and balanced credit portfolio with a low risk profile, wherein the entire loan book is fully collateralized and spread across sectors and lending segments. Selection of borrowers after thorough screening of creditworthiness and then exhaustive credit appraisal mitigates the credit risk to the bare minimum. Credit risk does not end at good pre-sanction appraisal. To maintain the asset quality throughout the tenor of the loan, and to avoid delinquencies, the post disbursement monitoring of the loan account is equally important. The Company continues to monitor credit exposure post disbursement through a very active monitoring mechanism via dedicated teams, in both the business verticals, to ensure end use of funds lent, maintenance of asset financed, monitoring continuity/ progress of project/business underwritten and timely recovery of principal and interest. Business Risk Business risk pertains to bearing of peripheral factors on business profitability and continuity. These risks are basically Interest Rate Risk, Eco-political Risk and Competition Risk. Our Management Committee meets time to time to take stock of the developments in economy, financial markets, including trends in interest rates and its impact on the portfolio. The Company has a dedicated research team, which keeps a constant vigil on the developments in the market and the economy. Operational Risk The business model in the Company is such that there are enough checks and balances to ward off any operational risks. The Company has in place systems and procedures that enable monitoring of all activities on a real time basis. All operations are fully computerized, leaving very little scope for human error or intervention. IT architecture / infrastructure put in place ensure seamless operations on a continuing basis. Attrition at the Company is much below the industry average. The Company stringently adheres to regulatory guidelines and proactively prepares for any impending changes INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has in place adequate internal controls commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor report to the Chairman of the Audit Committee of the Board. Internal Auditor monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. DISCLOSURE UNDER THE PREVENTION OF SEXUAL HARASSMENT ACT There were no complaints reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. LISTING WITH STOCK EXCHANGES: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to Ahmedhdabad Stock Exchange where the Company's Shares are listed. Your company has received Listing and trading approval from BSE Limited on 14th July, 2015 (Notice no. 20150714-24 dated July 14, 2015) The Equity Shares of the Company is Listed on BSE Limited w.e.f. 16th July, 2015 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO: During the year under review, the Company has not carried out any manufacturing activity and hence the Directors have nothing to report under Section 134 (3) (m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with reference to Conservation of Energy and Technology Absorption. There was no foreign exchange earnings and outgo during the year under review. ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, Banks, Government authorities, customers vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the company's executives, staff and workers. For and on behalf of the Board of Directors Kailash Jangid Managing Director DIN: 03377929 Uday Gherwada Director DIN: 06741691 |