DIRECTOR'S REPORT To, The Members, 1.Your Directors have pleasure in presenting their 24th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2015. 2. COMPANY'S PERFORMANCE AFFAIR Your Directors are positive about the Company's operations and making best efforts to implement the cost reduction measures to the extent feasible. 3. DIVIDEND Considering the present financial status of the Company, your directors do not recommend any dividend for the year under report. 4. RESERVES AND SURPLUS The balance of Profit & Loss statement amounting to Rs. 2,66,267/- for Financial Year under review is transferred to reserves. The total reserves for the Financial Year 2014-15 is Rs. (3,39,03,613)/- 5. SHARE CAPITAL The total paid up share capital of the Company as on 31st March, 2015 is Rs. 4,61,03,000/- comprising of 46,10,300 Equity Shares of Rs. 10/- each. The Karnataka High Court vide its order dated 10th July 2015 has approved the scheme of reduction of capital on account of which the equity share capital of company will be reduced from 46,10,300 equity shares of Rs 10 each aggregating Rs 4,61,03,000 to 4,61,030 equity shares of Rs. 10 each aggregating to Rs.46,10,300. Accordingly an amount of Rs. 4,14,92,700 will be reduced from the equity share capital by setting it off against the accumulated losses of the company. The appointed date for the scheme was 1st April 2013. 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to Section 161 of Companies Act, 2013, Ms. Namrata Malu (DIN: 03583659), has been appointed as an Additional Independent Director in the Board Meeting held on 25th March, 2015. Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Shivanna Rajasekharappa has been appointed as Chief Financial Officer in the Board Meeting held on 25th March, 2015. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013. 7. MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year 10 (Ten) Board Meetings and 6 (Six) Audit Committee Meetings were convened and held. The details of which are given as under. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 8. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee. 9. COMMITTEES OF THE BOARD During the year, in accordance with provisions of Companies Act, 2013, the Board of Directors of the Company has re-named the existing committee i.e., Stakeholders Relationship Committee and constituted Nomination and Remuneration Committee. There are currently three committees of the Board, as following: 1) Audit Committee The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect of auditing and accounting matters. It also supervises the Company's financial reporting process. The Audit Committee Comprises of 3 (Three) Directors. The Chairman of the Audit Committee is a Non-executive and Independent Director. The Composition of the Audit Committee is as under: 2) Nomination and Remuneration Committee The Company has constituted Nomination and Remuneration Committee and presently the Remuneration Committee comprises of 3 (Three) Directors. 3) Stakeholders Relationship Committee It was apprised to the Board that pursuant to requirements of Section 178 of the Companies Act, 2013, Company which has more than 1000 (One Thousand) shareholders at any time during a Financial Year shall constitute a 'Stakeholders' Relationship Committee' consisting of a Chairperson who shall be a Non-Executive Director and such other members as may be decided by the Board. In view of above, the 'Shareholders Grievance Committee' formed as per the requirements of the Listing Agreement requires to be re-named/ re-constituted as 'Stakeholders Relationship Committee' and to merge and redesign the Company's 'Share Transfer Committee' along with the Stakeholders' Relationship Committee. The Committee, inter-alia, deals with various matters relating to: • Transfer/transmission of shares; • Issue of duplicate share certificates; • Investors" grievances and redressal mechanism and recommend measures to improve the level of investor services. Details of shares transfer/transmission approved by the Committee and Shareholders'/Investors' grievances are placed at the Board Meetings from time to time. 10. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. 11. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, the directors would like to state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed. b) 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 true and fair view of the state of affairs of the Company for the year under review. c) 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. d) The directors have prepared the annual accounts on a going concern basis. e) 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. f) 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. 12. AUDITORS The Auditor, Mr. Chetan Dedhia, Chartered Accountant, Mumbai, retire at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment for a period from the conclusion of this Annual General Meeting [AGM] till the conclusion of 27th (Twenty Seventh) AGM. 13. AUDITOR'S REPORT The Board has duly examined the Statutory Auditor's report on accounts which is self explanatory and clarifications wherever necessary, have been included in the Notes to Financial Statements of the Annual Report. Regarding Auditor's comment on 'ongoing concern' the Director contend that the Company will be able to continue as going concern, though the Company has not undertaken any business activity, its net worth remains negative and considering the fact that the Company has adequate resources to continue in operational existence for the foreseeable future and taking into account the management assessment of improvement in the economic condition in general and as borne out by AS16 issued by the Council of the ICAI, they continue to adopt the going concern basis in preparing the annual report and accounts. Your Directors, continue to improve the financial viability of the Company and also take such steps as may be required under current laws and regulations in terms of disclosure and reporting required to be made to concerned statutory authorities. 14. SECRETARIAL AUDIT REPORT In terms of Section 204 of the Act and Rules made there under, M/s. S G Parekh & Co., Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure to this report. Secretarial Auditor's observation and Management's explanation to the Auditor's observation - a) Non appointment of Company Secretary The Board would like to bring to your notice that the Company has been trying to recruit a Company Secretary on best efforts basis since a long time but the Company has not been successful. b) Clause 41 - Publication of Results audited and unaudited in news paper The Company has not been doing that since the financial position of the Company does not allow Board to incur such expenditure keeping in mind that the results are made available for investors and market through Stock Exchange. The Company, on timely basis submits the results to the Exchange to bring the information in public domain. c) Non appointment of Internal Auditor Due to financial constraints the Board decided to appoint the Internal Auditor in Next Financial year keeping in mind revival of the Company in near future. d) Delay in compliance with Clause 31 of the Listing Agreement The Board would like to inform that there was a delay of 10 days in complying with the requirements of Clause 31. e) Non filing of certain forms with ROC With regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the Company would ensure in future that all the provisions are complied to the fullest extent. The report of the Secretarial Auditors is enclosed as Annexure II to this report. 15. VIGIL MECHANISM In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.chitradurga.co.in under investors/policy documents/Vigil Mechanism Policy link. 16. RISK MANAGEMENT POLICY A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, this in the opinion of the Board may threaten the existence of the Company. 17. EXTRACT OF ANNUAL RETURN As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT 9 as a part of this Annual Report as ANNEXURE I. 18. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The code laid down by the Board is known as "Code of Business Conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.chitradurga.co.in . 19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of energy, technology absorption, foreign exchange earnings and outgo are nil during the year. 20. INDUSTRIAL RELATIONS: During the year under review, your Company maintained cordial relationship with employees at all levels. 21. LISTING WITH STOCK EXCHANGES The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE Limited where the Company's Shares are listed. 22. OTHER INFORMATION Your Directors hereby states that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. During the year under the review, the Company has not given any new loans and not provided any Guarantees or made Investments under the provisions of Section 186 of the Companies Act, 2013; 2. The Provision of Section 135 of the Act with respect to Corporate Social Responsibility (CSR) is not applicable to the Company, hence, there is no need to develop policy on CSR and take initiative thereon; 3. The Company do not have any subsidiary, joint venture or, associate Company, hence, no need to state anything about the same; 4. The Company has not accepted deposits covered under Chapter V of the Act; 5. No significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. 6. Since, the Company having paid-up capital less than the threshold provided under Clause 49 of the Listing Agreement, hence, the Company need not required to address Reports on Corporate Governance, certificate/s pertains thereto and, Management Discussion and Analysis Report 7. There are no employees who are in receipt of salary in excess of the limits prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 8. The Company has not entered any contracts or arrangements with related parties specified under Section 188 of Companies Act, 2013. 23. ACKNOWLEDGEMENTS An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results. For and on behalf of the Board of Directors S. Rajasekharappa Chairman Place: Challakere Date: 13th August, 2015 |