DIRECTORS' REPORT Dear Shareholders, Your Directors take pleasure in presenting the 42nd Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2015. OPERATIONS : During the year under review, your Company has achieved a Total Revenue of Rs. 15,359.86 lacs which is 6.81% lower over the corresponding previous financial year total revenue of Rs. 16,482.96 lacs. The Company has achieved an EBIDTA of Rs. 1,301.25 lacs as compared with previous year figure of Rs. 1788.10 lacs. The Profit after Tax worked out Rs. 12.56 lacs as compared with previous year figure of Rs. 41.52 lacs. OUTLOOK : The industrial growth of the Company did not improve at the desired level as envisaged during the year under review. The Company is in the business of transportation and logistics and due to non- improvement in the industrial activity the Company was not able to procure the business at its desired level. The profitability of the Company was affected due to at one hand stagnancy of the offtake and on the other hand increase in the cost at various levels of the Company. Besides, due to low demand for logistics services, there was fierce competition in the market making lower realizations for the services rendered by the Company. Therefore the Company could neither achieve any volume growth nor desired profitability. At the same time, the Company had to incur interest on financed assets and depreciation thereon. The Company is making sustained marketing efforts for its services in infrastructure sector & power sector which is expected to see revival, over the next few years. The Company has also undertaken cost control and reduction to improve its profitability. Accordingly, the performance of the Company in current year as well as coming years shall continue to be highly dependent upon revival of infrastructure sector, power sector, industrial project and procurement of orders. To overcome the situation, the Company has diversified its business activities and has started a new segment viz. Construction Division during the year under review. DIVIDEND Due to paucity of profit during the year under review and to conserve the resources of the Company for long term working capital requirements, the Board of Directors of the Company could not recommend any dividend on the Equity Shares of the Company for the financial year ended 31st March, 2015. TRANSFER TO RESERVES No amount was transferred to reserves during the financial year ended 31st March, 2015. HUMAN RESOURCES Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. Your Company has continuously adopted structures that help attract best external talent and provide internal talent to higher roles and responsibilities. Your Company has a adequate pool of trained and competent human resources which is highly capable to meet the challenges of growing quality perspective and complex logistics requirement of the customers. In view of increased competition, the human resources of the company are able and proved to deliver specialised services of desired quality meet the competition and to satisfy customer requirements. EMPLOYEES STOCK OPTION SCHEME, 2007 Member's approval was obtained at the Annual General Meeting held on July 31, 2007 for introducing of Employees Stock Option Scheme. Employees Stock Option Scheme was approved and implemented by the Company and Options were granted to employees in accordance with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 ('the SEBI Guidelines) and as amended. The Compensation Committee, constituted in accordance with the SEBI Guidelines had administered and monitored the Scheme. The money earlier realized by exercise of options has been utilized in the business of the Company especially for funding capital investments. During the year under review, the Employee's Stock Options Scheme completed its term of 7 years in June, 2014 and as such the tenure of the scheme has been completed. The Compensation committee constituted for the purpose has also been dissolved . DIRECTORS AND KEY MANAGERIAL PERSONNEL i) Appointments : a) Mr. Siddarth Kapoor (DIN 02089141) on recommendation of Nomination and Remuneration Committee has been appointed by the Board as an Additional Director in the category of Non Executive-Independent Director of the Company with effect from March 31, 2015 pursuant to Section 161 of the Companies Act, 2013 and other applicable provisions of the said Act and as per the requirements of clause 49 of the Listing agreement. He has provided declaration of his independence as per Section 149(7) of the Companies Act, 2013. Pursuant to the provisions of Section 161 of the Companies Act, 2013 and rules made there under, the aforesaid Director would hold the office of Directors upto the date of ensuing Annual General Meeting of the Company unless appointed as a Director of the Company by the Shareholders. Amongst other terms, Mr. Siddarth Kapoor, when confirmed by the Shareholders would no longer be required to retire by rotation in view of Section 149(13) of the Companies Act, 2013 and can hold the office up to March 31, 2019 as per Section 149(10) of the said Act and hence his appointment has been proposed accordingly. b) Mrs. Rachana Todi (DIN 00268594) on recommendation of Nomination and Remuneration Committee has been appointed by the Board as an Additional Director in the category of Non Executive-Independent Director of the Company with effect from March 31, 2015 pursuant to Section 161 of the Companies Act, 2013 and other applicable provisions of the said Act and as per the requirements of clause 49 of the Listing agreement. She has provided declaration of her independence as per Section 149(7) of the Companies Act, 2013. Pursuant to the provisions of Section 161 of the Companies Act, 2013 and rules made thereunder, the aforesaid Director would hold the office of Directors upto the date of ensuing Annual General Meeting of the Company unless appointed as a Director of the Company by the Shareholders. Amongst other terms, Mrs. Rachana Todi, when confirmed by the Shareholders would no longer be required to retire by rotation in view of Section 149(13) of the Companies Act, 2013 and can hold the office upto March 31, 2019 as per Section 149(10) of the said Act and hence her appointment has been proposed accordingly. ii)Retirement by Rotation : Pursuant to the provisions of Section 152(6) and other applicable provisions, of the Companies Act, 2013 Mr. Anand Kumar Agarwal (DIN 00380908), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offered himself for re-appointment. iii)Resignation : Mr. Krishan Arya. Non-Executive Independent Director (DIN 02318774), Mr. Ashok Kumar Surana, NonExecutive Director (DIN 00396036) and Dr. Padam Chand Agarwal, Non-Executive Director (DIN 00407663) have resigned from the office of Directors of the Company with effect from 31st March, 2015. The Board place on record its appreciation of the invaluable contribution made by them during their tenure as Directors of the Company. iv)Appointment of Wholetime- Key Managerial Personnel (KMP): Pursuant to the provisions of Section 203 and other applicable provisions of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 the Board has appointed the following personnel as the designated Wholetime Key Managerial Personnel of the Company within the meaning of the said section. a)Mr. Ashish Agarwal - Managing Director. b)Mr. Sushil Pransukhka - Chief Financial Officer. c)Mr. Sanjay Agarwal - Company Secretary & Compliance Officer. Mr. Arun Kumar Thirani, Company Secretary & Compliance Officer in the category of Key Managerial Personnel has resigned during the year. None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013. The Directors have also made necessary disclosures to the extent as required under provisions of section 184(1) of the Companies Act, 2013. INDEPENDENT DIRECTOR'S DECLARATION Your Company had received the declaration of Independence u/s 149(7) of the Companies Act, 2013 from all the Independent directors of your Company specifying that they meet the criteria of independence as per Section 149(6) of the Companies Act, 2013. AUDITORS AND THEIR REPORTS (i)Statutory Auditor : The Statutory Auditors M/s Agarwal Kejriwal & Co., Chartered Accountants, holds office upto the conclusion of the Annual General Meeting (AGM) to be held for the FY 2016-17, subject to ratification by the shareholders in every AGM. Accordingly, the Board on recommendation of Audit committee has proposed for ratification of their appointment in the office of Statutory Auditors of the Company for the FY 2015-16. The Auditors report does not contain any qualification. Notes to Accounts and Auditors remarks in their Report are self-explanatory and hence do not call for any further explanation. (ii)Cost Auditor : Pursuant to section 148 of the Companies Act, 2013, the Board of Directors on recommendation of the Audit Committee had approved Mr. Debabrota Banerjee as the Cost Auditor of the Company for the financial year 2014-15 and has also appointed M/s Debabrota Banerjee & Associates, Cost Accountants, as the Cost Auditors of the Company for the financial year 2015-16. The Company has received consent and confirmation of eligibility for their appointments as the Cost Auditors of the Company. (iii)Secretarial Auditor : The Board has appointed Mr. Santosh Kumar Tibrewalla, Practising Company Secretary, as the Secretarial Auditor of the Company to carry out the Secretarial Audit for the FY 2014-15 under the provisions of section 204 of the Companies Act, 2013. The report of the Secretarial Auditor for the FY ended 31st March, 2015 is attached as "Annexure -A" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the Directors Responsibility Statement as referred to in section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors hereby confirm that : i)In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii)The Directors have 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 at the end of the financial year and of the profit and loss of the company for that period; 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 safe guarding 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, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and vi)The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. The Company complied with all the applicable provisions of the Company's (Acceptance of Deposits) Rules, 1975 as amended upto date and with the requirements under the Companies Act, 2013 and the related Rules. The details relating to deposits, covered under Chapter V of the Act,- (a)accepted during the year; -NIL (b)remained unpaid or unclaimed as at the end of the year;- NIL (c)whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved-NOT APPLICABLE (i)at the beginning of the year;- Rs. 1,77,56,000/- (ii)maximum during the year;- Rs. 1,77,56,000/- (iii)at the end of the year;- NIL The outstanding balance of principal amount of public deposits has been fully repaid along with the interest due thereon upto 31.03.2015. There is no outstanding balance of Public Deposit as on 31st March, 2015 barring unencashed amount by the respective deposit holders. DETAILS RELATING TO REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES The particulars and information of the Directors/employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 of your Company is attached as "Annexure-B" to this report. None of the employees of the Company were in receipt of the remuneration exceeding limits pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Information related to conservation of energy, Research & Development, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 and Rule 8 (3) of Companies (Accounts) Rules, 2014 are as follows: (a)Conservation of energy The Company's operation involves no energy consumption. (b)Technology absorption i.The Company does not have any R & D Division and Company's Operations does not require this type of establishment. ii.Technology absorption, adoption and innovation: The Company has not imported any technology due to its nature of operation. (c)Foreign exchange Earnings and Outgo During the year, the total foreign exchange earned was Rs. 10,48,868/- (Previous Year Rs. 6,50,280/-) and the total foreign exchange used was Rs. 38,32,523/- (Previous Year Rs. 22,64,557/-). CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The Board has constituted the Corporate Social Responsibility Committee under the Chairmanship of Mr. Vijay Kumar Jain. As the Company is not falling under the purview of Section 135 of the Companies Act, 2013 and the relevant rules made thereunder are not applicable for the time being, the Committee was not required to formulate and recommend to the Board a Corporate Social Responsibility Policy. Complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Board's Report. INTERNAL AUDIT & CONTROLS The Company continues to engage Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS No significant and material order has been passed by the Regulators, Courts, Tribunals impacting the going concern status and Company's operations in future. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has placed adequate internal financial controls as required under section 134(5)(e) of the Companies Act, 2013. During the year under review, such controls were tested and no reportable material weakness in the formulation or operations were observed. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING In terms of the SEBI (Prohibition of Insider Trading) Regulations, 1992, your Company has already adopted the Code of Conduct for prevention of Insider Trading. Further, in accordance with the provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company at their meeting held on May 26, 2015 have approved and adopted the code of practices and procedure for fair disclosure of Unpublished Price Sensitive Information and formulated the code of conduct of the Company. DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT i)Related Party Transactions All transactions entered with related parties during the FY 2014-15 were on an arm's length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. There have been no materially significant related party transactions with the Company's Promoters, Directors and others as defined in section 2(76) of the Companies Act, 2013 and the listing agreement which may have potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. The necessary disclosures regarding the transactions are given in the notes to accounts. The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the audit committee and Board of directors were taken wherever required in accordance with the policy. ii)Number of Board Meetings The Board of Directors met 6 (six) times in the FY 2014-15. The Details of the Board meeting and attendance of the Directors are provided in the Corporate Governance Report, attached as Annexure to this Board's Report. iii)Composition of Audit Committee The Board has constituted the Audit Committee under the Chairmanship of Mr. Debasis Sengupta. Complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Board's Report. iv)Extracts of Annual Return The details forming part of the extract of the Annual Return in Form No. MGT-9 as required under section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached as "Annexure-C" to this report. v)Risk Analysis The Company has in place a mechanism to inform the Board members about the Risk assessment and mitigation plans and periodical reviews to ensure that the critical risks are controlled by the executive management. vi)Loans, Guarantees and Investments There has been no loans, guarantees and investments under Section 186 of the Companies Act, 2013 during the FY 2014-15. vii)Post Balance Sheet events There is no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relates and the date of this report. viii)Subsidiaries, Associates or Joint Ventures Your Company does not have any subsidiaries, associates or joint ventures. M/s. ABC Skyline Ltd., as on 31st March, 2015 have ceased to be the Company's Subsidiary. ix)Evaluation of the Board's Performance During the year under review, the Board, in compliance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, has adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board, as a whole and the Chairman, who were evaluated on parameters such as their participation, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholders interest etc. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors in their separate meeting. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. x)Nomination, Remuneration and Evaluation Policy The Company on recommendation of its Nomination & Remuneration Committee has laid down a Nomination, Remuneration and Evaluation Policy, in compliance with the provisions of the Companies Act, 2013 read with the Rules made therein and the Listing Agreement with the stock exchanges (as amended from time to time). This Policy is formulated to provide a framework and set standards in relation to the followings and details on the same are given in the Corporate Governance Report, attached as Annexure to this Board's Report: a. Criteria for appointment and removal of Directors, Key Managerial Personnel (KMP) and Senior Management Executives of the Company. B .Remuneration payable to the Directors, KMPs and Senior Management Executives. c. Evaluation of the performance of the Directors. D .Criteria for determining qualifications, positive attributes and independence of a Director. xi) Vigil Mechanism (Whistle Blower Policy) Your Company has formulated a Whistle Blower Policy and employees of the Company are encouraged to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in any way. The Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith. Details of establishment of the Vigil Mechanism have been uploaded on the Company's website: www.abcindia.com and also set out in the Corporate Governance Report attached as Annexure to this Board's Report. COMPANY'S WEBSITE The website of your Company, www.abcindia.com has been designed to present the Company's businesses upfront on the home page. The site carries a comprehensive database of information of all the services rendered including the Financial Results of your Company, Shareholding pattern, Corporate profile, details of Board Committees, Corporate Policies and business activities of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013 and Companies Rules 2014 and as per the Listing agreement has been uploaded. CORPORATE GOVERNANCE Your Company has practiced sound Corporate Governance and takes necessary actions at appropriate times for enhancing and meeting stakeholders' expectations while continuing to comply with the mandatory provisions of Corporate Governance. Your Company has complied with the requirements of revised Clause 49 of the Listing Agreement as issued by Securities and Exchange Board of India and as amended from time to time. Your Company has given its deliberations to provide all the information in the Directors Report and the Corporate Governance Report as per the requirements of Companies Act, 2013 and the Listing Agreement entered by the Company with the Stock Exchanges, as a matter of prudence and good governance. A Report on Corporate Governance along with a certificate from M/s. Agarwal Kejriwal & Co., the statutory Auditors of the Company regarding compliance of conditions of Corporate Governance and certification by CEO i.e. the Managing Director of the Company and CFO are given in "Annexure- D, E & F" to this report. CODE OF CONDUCT The Code of Conduct for Directors, KMPs and Senior Executive of the Company is already in force and the same has been placed on the Company's website: www.abcindia.com. All Board Members, KMPs and members of Senior Management have confirmed compliance with the code of conduct. A declaration to this effect has been signed by Mr. Ashish Agarwal, Managing Director is given as "Annexure G" to this Report. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT A report on Management Discussion & Analysis is given as "Annexure H" to this report. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). LISTING WITH STOCK EXCHANGES The Company confirms that it has paid the Annual Listing Fees for the FY 2015-16 to Bombay Stock Exchange and Calcutta Stock Exchange where the Company's Shares are listed. INVESTOR SERVICES In compliance to the requirements of clause 54 of the Listing Agreements with Stock exchanges, the Company has dedicated a column for investor services in its website www.abcindia.com. The Company would keep on updating these particulars as and when necessary. CAUTIONARY NOTE The statements forming part of the Directors' Report may contain certain forward looking statements within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements. APPRECIATION Your Directors take this opportunity to place on record their gratitude to the Central and State Governments, Bankers and Investors for their continuous support, cooperation and their valuable guidance to the Company and for their trust reposed in the Company's management. The Directors also commend the continuing commitment and dedication of the employees at all levels and the Directors look forward to their continued support in future. For and on behalf of the Board of Directors Anand Kumar Agarwal Executive Chairman DIN : 00380908 Place : Kolkata Dated : 14th August, 2015 |