DIRECTORS' REPORT The Directors take pleasure in presenting the Thirty Third Annual Report of your Company for the financial year ended 31st March 2015. Financial Results The total income during the year under review was Rs.106.78 lacs. The pre-tax profits were Rs.26.43 lacs after providing for depreciation of Rs.0.12 lacs. A provision of Rs.5.25 lacs has been made for taxation in the current year. After adjusting for deferred tax, the net profit was Rs.21.41 lacs. No amount has been transferred to General Reserves. Dividend In view of the additional financial burden imposed on the Company due to increased requirement of compliances under the Companies Act, 2013 , the Directors do not recommend payment of Dividend for the year ended 31st March 2015. Outlook The global economy continues to be mired in difficulties and challenges, emanating in part from the Greek debt crisis. This has resulted in substantial weakening of the Euro and continuing pressure in the Eurozone. The Chinese economy too has been undergoing a slowdown in growth, resulting in subdued demand for commodities worldwide. On the domestic front, the hopes and expectations from the new Government have yet to translate into a meaningful economic activity, especially in the development of infrastructure. Despite the benefit of reducing petroleum prices, the Indian currency has been weakening, reflecting the higher interest rates in India which are yet to moderate to reasonable levels. Given these circumstances, the Company expects continuing challenges through the year, especially as compliance costs under the new policy environment have gone up substantially. The Company will therefore need to be conservative while exploring new opportunities. Public Deposits The Company has no public deposits. Loans, guarantees and investments The Company has not given any loans, guarantees or made investments under Section 186 of the Companies Act, 2013. Related Party Transactions The Company has not entered into any related party transactions other than in the ordinary course of business and on arm's length basis. Therefore the provisions of Section 188 (1) are not applicable. Board Inductions Mr. Kumar Srinivasan, Whole-time Director will retire by rotation and being eligible, offers himself for re-appointment. Further, his tenure as Whole-time Director of the Company is also expiring on 26th September, 2015. The Board of Directors recommends his re-appointment and the matter is being put forth for shareholders approval at the forthcoming Annual General Meeting. Ms. Rashmi Nagabhushan was appointed as Additional Director of the Company in the Board meeting held on 6th February, 2015. Requisite notice proposing her candidature as Director has been received by the Company. The matter of her appointment is being put forth for shareholders approval at the forthcoming Annual General Meeting. Dr. Navin Kapur and Mr. Swaraj Singh were both appointed as Independent Directors in the previous Annual General Meeting held on 17th September, 2014. Ms. S. Sujatha Lyall was appointed Company Secretary and Compliance Officer effective from 1st September, 2014 and Mr. Amardeep Singh Bedi was appointed Chief Financial Officer effective from 1st March, 2015 Declaration by Independent Directors The Company has received declarations from both the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013. Board Evaluation The evaluation of all the Directors, the Board as a whole and the Committees was conducted based on the criteria adopted by the Board. The Directors expressed their satisfaction with the evaluation process. Committees The Board has three Committees namely, the Audit Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee. Vigil Mechanism/ Whistle Blower Policy The Company has established a Vigil Mechanism / Whistle Blower Policy for the prevention / detection of unethical behaviour, fraud and violation of Company's Code. The Audit Committee oversees the functioning of the Vigil Mechanism/Whistle Blower Policy of the Company. Sexual Harassment Policy The Company has adopted and implemented a policy for prevention of Sexual Harassment of Women at workplace. During the year the Company has not received any complaint of harassment Disclosures under Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. • Excepting the Whole-time Director (WTD), none of the other Directors receive any remuneration apart from Directors' sitting fee. The ratio of WTD's salary to the median employees remuneration is approx 2 : 1. • There was no increase in the remuneration of any Director or KMP in the financial year. • There was 7.5% increase in the remuneration of one employee in the financial year. • There are four permanent employees on the rolls of the Company. • Any future increase in remuneration of Directors, KMP and other employees will be as per the Nomination and Remuneration Policy of the Company. • The remuneration of the KMP has been fixed as per industry standards and the size of the Company. • The market cap of the Company increased from Rs. 4.02 crores as on 31.03.2014 to Rs. 4.07 crores on 31.03.2015. The price earning ratio was 19.05 as on 31.03.2015 as compared to 18.81 as on 31.03.2014. The closing price of the Company's equity shares on BSE was Rs. 14.29 each as on 31.03.2015, thereby making it a 42.9% increase in market price over the IPO price. The details of remuneration of Directors and KMP forms parts of the Extract of the Annual Return in Form MGT 9 attached to this Report as Annexure II. Disclosures under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 The Company has not paid any remuneration attracting the provisions of the above Rule. Hence, no information is appended to this report. Directors' Responsibility Statement The Directors confirm that: i. In preparation of the annual accounts for the financial year ended 31st March 2015 the applicable accounting standards have been followed. ii. Appropriate accounting policies have been selected and the same have been applied consistently and reasonable and prudent judgments and estimates were made 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. iii. Proper and sufficient care has been taken 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 frauds and other irregularities. iv. The accounts have been prepared on a going concern basis. v. Adequate Internal Financial Controls are followed by the Company and these are operating effectively. vi. Proper and adequate systems have been devised to ensure compliance with provisions of all applicable laws and such systems are operating effectively. Auditors Statutory Auditor M/s. Raghu Nath Rai & Co., Chartered Accountants (Firm Regd. No. 000451N), retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. They have furnished a certificate to the effect that the proposed re-appointment, if made, will be in accordance with the applicable provisions of the Companies Act, 2013. Secretarial Audit As required under Section 204 of the Companies Act, 2013 and Rules thereunder, M/s P.S. Soni & Co., Practicing Company Secretaries, had been appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for FY 2014-15 forms part of the Annual Report as Annexure III to the Board's Report. The Board has appointed M/s P.S. Soni and Co., Practicing Company Secretaries as Secretarial Auditor of the Company for the financial year 2015-16. There are no disqualifications, reservations or adverse remarks or disclaimers in the Auditors' and Secretarial Auditors' Reports. Internal Control Systems The Company has proper and adequate system of internal controls, which provide reasonable assurance regarding all financial and operating functions and compliance with statutory provisions. Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo. i. Conservation of Energy; The Company did not carry out any manufacturing activity during the year under review. The consumption of electricity continues to be minimal and adequate measures are taken to conserve power. ii. Technology Absorption; The Company has not purchased or acquired any new technology during the year under review. iii. Research & Development; The Company has not undertaken any new Research & Development activities during the year. iv. Foreign Exchange Earning & Outgo; During the year under review, there was no foreign exchange expenditure or earning. Acknowledgement The Directors place on record their sincere appreciation to the Shareholders, Associates, Bankers, Customers, Vendors, Officers and Staff of the Company and seek their continued cooperation and support for the coming years also. For and on behalf of the Board of Directors Deltron Limited Gurpreet Singh Chairman Place: New Delhi Date: 30th July, 2015 |