DIRECTORS' REPORT To the Members, Your Directors are pleased to present the Thirty Fourth Annual Report of your Company alongwith the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31, 2016. RESULTS FROM OPERATIONS A detailed discussion on the business performance and future outlook is included in the Management Discussion and Analysis which forms part of the Directors' Report. DIVIDEND AND RESERVES During the year under review, your Directors are pleased to recommend a dividend of Rs.0.50 per share (5%) on the face value of Rs.10 each (previous year Rs.0.50 per share (5%)). The dividend payout will aggregate to Rs.86.85 lacs (previous year Rs.86.85 lacs) and the tax on distributed profits payable by the Company would amount to Rs.18.17 lacs (previous year Rs.18.17 lacs). The payment of dividend is subject to the approval of the Members which is being sought at the forthcoming Annual General Meeting and shall be paid to those Members whose name appear in the Register of Members of the Company as on July 30, 2016. Your Directors recommend transferring of Rs.203.01 lacs to special reserve for the financial year 2015-16. SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2016 was Rs.1,737 lacs. During the year under review, the Company has neither issued any shares with differential voting rights nor granted any stock options nor any sweat equity. The Company has increased its authorised share capital from Rs.1,750 lacs to Rs.5,550 lacs during the financial year under review, which consists of authorised equity and preference share capital. The Shareholders have approved this by means of postal ballot. Except Mr. Vijay Choraria, Managing Director of the Company who holds 944,435 equity shares in the Company, none of the other Directors or Key Managerial Personnel of the Company hold shares in the Company. FINANCE Cash and cash equivalents as on March 31, 2016 was Rs.286.80 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters are kept under strict check by continuous monitoring. DEPOSITS The Company has not accepted any deposits which would be covered under Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS The provisions of Section 186 of the Act pertaining to investment and lending activities is not applicable to the Company since the Company is an NBFC whose principal business is acquisition of securities. The particulars of guarantee provided during the financial year are given in the Notes to the financial statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES All related party transactions entered by the Company during the financial year were on an arm's length basis and were carried out in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year under consideration with the Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. All the related party transactions as required under Accounting Standard - 18 are reported in the Notes to the financial statements. All related party transactions are placed before the Audit Committee and also before the Board for its approval. Prior approval of the Audit Committee is obtained on an annual basis specifying the upper ceiling as to the amount for transactions which are of a repetitive nature. The transactions entered into pursuant to the prior approval so granted are placed before the Audit Committee and the Board of Directors on a quarterly basis. In accordance with the Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has in place a Policy on Materiality of Related Party Transactions and a Policy on Dealing With Related Parties. The policy is available on the Company's website at www.crest.co.in . The particulars as required under the Companies Act, 2013 are furnished in Form AOC - 2 which is annexed as "Annexure A" to this report. CORPORATE SOCIAL RESPONSIBILITY In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors of the Company has constituted a Corporate Social Responsibility (CSR) Committee. At present, following are the members of the Committee: 1. Mr. Vasudeo Galkar - Chairman 2. Mr. Vijay Choraria - Member 3. Mr. Rajeev Sharma - Member During the year, the Company undertook a number of CSR initiatives which mainly focused on eradicating hunger, poverty, malnutrition, women empowerment, promoting education and rural development projects. In this connection, the Company during the year under consideration spent an amount of Rs.11.50 lacs. A detailed list of the CSR contribution made is annexed herewith as "Annexure B" and the CSR policy of the Company is uploaded on the Company's website at www.crest.co.in . INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY Information on the operational and financial performance, among others, are given in the Management Discussion and Analysis which is annexed to this report. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an internal control system, commensurate with the size of its operations and nature of its business activities. The Internal Auditor monitors and evaluates 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. The Company's Internal Auditors submit quarterly reports which are placed before the Audit Committee. RISK MANAGEMENT The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the Risk Management Policy for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its efficiency. The policy is available on the Company's website at www.crest.co.in . WHISTLE BLOWER POLICY/ VIGIL MECHANISM As required under Regulation 22 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has an effective Whistle Blower Policy to deal with the instances of fraud and mismanagement. The details of the policy are enumerated in the Corporate Governance Report. The policy is available on the Company's website at www.crest.co.in . The policy provides for adequate safeguard against the victimisation of the employees. The Vigil Mechanism is overseen by the Audit Committee. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary ,trainees) are covered under this policy. There were no cases reported during the financial year ended March 31, 2016. SUBSIDIARIES AND ASSOCIATES The salient features of the financial statement of subsidiaries is annexed to this report as "Annexure C - Part A". The salient features of the financial statement of associate companies is annexed to this report as "Annexure C - Part B". Through the Composite Scheme of Amalgamation, ITI Securities Limited, subsidiary of ITI Capital Holdings Private Limited, merged with ITI Capital Holdings Private Limited from appointed date April 01, 2014 and through the same scheme, the amalgamated ITI Capital Holdings Private Limited, our subsidiary Company merged with the Company from appointed date April 02, 2014. The Hon'ble Bombay High Court on November 30, 2015 approved the Scheme and the Company merged on filing the documents with Registrar of Companies on December 07, 2015 and December 08, 2015. Disclosures pursuant to Section 197(14) of Companies Act 2013 are not applicable to the Company. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company, prepared in accordance with the Companies Act, 2013 and applicable Accounting Standards issued by the Institute of Chartered Accountants of India forms part of this Annual Report. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of each subsidiary are available on the website of the Company www.crest.co.in . DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) a) RETIREMENT BY ROTATION In terms of the provisions of Section 152(6) of the Companies Act, 2013, Mr. Mahesh Shirodkar, Director (DIN: 00897249), retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himself for re-appointment. In accordance with Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable provisions of the Companies Act, 2013, brief profile of the Director to be re-appointed is included in the Notice which forms part of this Annual Report. b) APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Mr. Rajeev Sharma was appointed as an Additional Independent Director w.e.f. November 02, 2015 to hold office until the next Annual General Meeting. His confirmation as Independent Director at the ensuing AGM is recommended. Ms. Manasi Modak was appointed as the Company Secretary and Mr. Arvind Jain was appointed as the Chief Financial Officer of the Company both w.e.f. May 14, 2016. c) RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Mr. Rohan Gavas resigned as the Company Secretary of the Company w.e.f. April 13, 2016, Mr. Vishal Mehta resigned as the Chief Financial Officer of the Company w.e.f. May 13, 2016 and Mr. Manish Goswami resigned as Director w.e.f. August 07, 2015. DECLARATION BY INDEPENDENT DIRECTORS All Independent Directors have furnished the declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. BOARD AND COMMITTEE MEETINGS During the year ended March 31, 2016, the Board met 5 (five) times and the gap between two Board Meetings did not exceed 120 days and atleast one meeting has been held in each Quarter. Details of the Board Meetings and Meetings of its Committees are given in the Corporate Governance Report. BOARD'S EVALUATION Pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Board has framed an Evaluation Policy for evaluating the performance of the Board, Chairman, Managing Director, Executive Directors, Independent Directors, Non - Executive Directors and its Committees. Based on the same, the Board carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, CSR Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report. A meeting of the Independent Directors was held during the year under review. The Policy, inter alia, provides the criteria for performance evaluation such as Board effectiveness, quality of discussion, contribution at the meetings, business acumen, strategic thinking, corporate governance practices, contribution of the Committees to the Board in discharging its functions, etc. TRAINING IMPARTED TO THE INDEPENDENT DIRECTORS As required under Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, every new Independent Director of the Board is familiarised by the Executive Directors/ Senior Managerial Personnel about the Company's strategy, operations, organisation structure, human resources, quality, finance and risk management. Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/ her role, functions, duties and responsibilities as a director. The terms and conditions of letter of appointment is available on the Company's website at www.crest.co.in . POLICY FOR DETERMINATION OF MATERIALITY OF EVENTS OR INFORMATION As required under Regulation 30(4)(ii) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the Policy for Determination of Materiality of Events or Information and has placed on the website of the Company at www.crest.co.in . POLICY FOR DETERMINATION OF MATERIAL SUBSIDIARIES As required under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the Policy for Determination of Material Subsidiaries and has placed it on the website of the Company at www.crest.co.in . COMPANY'S REMUNERATION POLICY Pursuant to applicable Regulations of the SEBI Listing Regulations and Section 178 (3) of the Companies Act, 2013, the Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and fixing their remuneration. The Remuneration Policy is provided in the Corporate Governance Report, which forms part of this Annual Report and has also been hosted on the website of the Company at www.crest.co.in . DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, your Directors hereby confirm that: i. In the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; ii. They had in consultation with Statutory Auditors, 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, 2016 and of the profit of the Company for the year ended on that date; iii. They 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. They have prepared the annual accounts on a 'going concern' basis; v. They have laid down internal financial controls, which are adequate and operating effectively; vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There were no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. STATUTORY AUDITORS The Members at the Thirty Second Annual General Meeting approved the appointment of M/s. Chaturvedi and Shah, Chartered Accountants (Firm Registration No. 101720W), as Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 to hold office for a period of three years from the conclusion of Thirty Second Annual General Meeting till the conclusion of the Thirty Fifth Annual General Meeting to be held in the year 2017 subject to ratification by the Shareholders at each Annual General Meeting. M/s. Chaturvedi and Shah, Chartered Accountants have confirmed that they continue to be eligible to act as Auditors of the Company under Section 141 of the Companies Act, 2013 and the Rules framed thereunder. As required by the Companies Act, 2013, the Members are requested to ratify their appointment as Statutory Auditors for the financial year 2016-17. 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 had appointed CS Ajit Sathe, Proprietor of M/s. A.Y. Sathe and Co., Practising Company Secretary (FCS: 2899 / COP: 738) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2015-16 forms part as "Annexure D" to this Report. STATUTORY AND SECRETARIAL AUDITOR OBSERVATION The Statutory Auditors of the Company have not reported any fraud as specified under the Second provision of Section 143 (12) of the Companies Act, 2013 (including any Statutory modification(s) or re-enactment(s) for the time being in force). There are no adverse remarks, observations or disclaimer remarks by the Statutory Auditors. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Your Company is not engaged in any manufacturing activities and therefore, no particulars are required to be disclosed under the Rule 8(3) of the Companies (Accounts) Rules, 2014, in respect of conservation of energy and technology absorption. Further, there were no foreign exchange earnings and outgo during the year under review. CORPORATE GOVERNANCE In compliance with Regulations 17 to 27 and 34 read with Schedule V of SEBI Listing Regulations, as applicable, the Corporate Governance Report is annexed and forms part of the Annual Report. The report is duly certified by the Statutory Auditors of the Company. EXTRACT OF THE ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT - 9 is annexed herewith as "Annexure E". PARTICULARS OF EMPLOYEES The disclosures required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is provided as "Annexure F" to this report. Further disclosure under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company. PERSONNEL The relations between the employees' and the management of your Company continue to be cordial. ACKNOWLEDGEMENT Your Directors wish to place on record the appreciation of the dedicated efforts by the employees at all levels. The Directors also wish to place on record their word of sincere appreciation to the bankers and financial institutions, the investors, the vendors, the customers and all other business associates for their continued support. For and on behalf of the Board of Directors Vasudeo Galkar Chairman DIN: 00009177 Place : Mumbai Date : July 06, 2016 |