DIRECTOR'S REPORT To The Members, USG Tech Solutions Limited Your directors have pleasure in presenting the 16thAnnual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended March 31, 2015. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK: During the year under review, the Company has suffer an loss before tax of Rs.3,21,808.16as compared to Loss of Rs.95,082 during the previous year and has earned a profitafter tax (MAT] of Rs.168883.67as compared to profit of Rs.30,810 during the previous year. The company expects good business and returns in future. CHANGE IN NATURE OF BUSINESS: During the year under review, there were no changes in nature of business of the company. DIVIDEND: In order to conserve the resources of the company for the good future prospects and growth, and as the Company has suffer loss in the said reporting period, the Board of Directors taking this view have decided not to distributed any dividend out of the reserve of the Company and therefore the Board of Directors of the company has not recommended any dividend to the shareholders. AMOUNT TRANSFERRED TO RESERVES: There is no transfer to reserves during the financial year. CHANGES IN SHARE CAPITAL: There was no change in the Share Capital of the company during the year. • Disclosure regarding issues of equity shares with differential rights: The Company has not issues any equity shares with differential rights during the year Under review. • Disclosure regarding issues of employee stock options: The Company has not provided any Stock Option Scheme to the employees during the year under review. • Disclosure regarding the issues of sweat equity shares: The Company has not issued any Sweat Equity Shares during the year under review. EXTRACT OF ANNUAL RETURN: The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3] of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration] Rules, 2014 for the financial year 2014-15 has been enclosed with this report inANNEXURE-1 NUMBER OF MEETINGS OF THE BOARD: During the financial year 2014-15,09 (Nine]meetings of Board of Directors of the Company were held and the intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 (i.e., the maximum interval between any two board meeting did not exceed 120 Days], 5 (Five] Audit Committee Meetings were convened and held and 2 (Two] NRC committee meeting were convened and held. Details of the Meetings (i.e., Date of the Meetings, Number of the Director present etc] is mention in Corporate Governance Report a part of Annual Report. BOARD EVALUATION: Pursuant to the provisions of the Companies Act, 2013, Clause 49 of the Listing Agreement and in line with our corporate governance guidelines, peer evaluation of all Board members, annual performance evaluation of its own performance, as well as the evaluation of the working of its Committees of the Board. This evaluation is led by the Chairman of the Board Governance, Nomination and Compensation Committee with specific focus on the performance and effective functioning of the Board. The evaluation process also considers the time spent by each of the Board members, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise. BOARD INDEPENDENCE: Definition of' Independence' of Directors is derived from Clause 49 ofthe ListingAgreement with Stock Exchanges and Section 149(6] of the Companies Act, 2013. Based on the confirmation /disclosures received from the Directors under Section 149(7] of the Companies Act 2013 and on evaluation of the relationships disclosed, the following Non-Executive Directors are considered as Independent Directors:- a] Mr. Anil Kumar Gupta b] Mr. Umesh Sharma PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013: During the financial year 2014-15, the company has not given any loan, provided guarantee and made investment under section 186 of the Companies Act, 2013. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There was a contract or arrangements made with related parties with arm length pricing as defined under Section 188 of the Companies Act, 2013 during the year under review. INTERNAL AUDIT & CONTROLS The Company continues to engage Mr. Ravi Agarwal as its Internal Auditor. 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. AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS: M/s Udit Aggarwal & Associates, Chartered Accountants (Firm Registration Number 026161N] were appointed as Statutory Auditors for a period of 3 years in the previous Annual General Meeting subject to the ratification in every Annual General Meeting in terms of section 139(1] of the Companies Act, 2013. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. SECRETARIAL AUDIT REPORT: 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 Dharmen-dra Sharma & Associates a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR 3 for the Financial Year ended March 31, 2015 is annexed as Annexure-III to the Report. There are no qualifications, reservations or adverse remarks made by Secretarial Auditor in his report. COST AUDITOR: As per the Cost Audit Orders, Cost Audit is not applicable to the Company's in respect of its product/services. Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the statutory auditors and the practicing company secretary in their secretarial audit report. There was no qualification, reservation or adverse remark made by the Statutory Auditors & Secretarial auditor in their report for FY 2014-15. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY: • During the financial year 2014-15the Company has made alteration in existing object clause in Memorandum of Association of the Company. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES: The Company does not have any subsidiary. HUMAN RESOURCE DEVELOPMENT As a member of The USG Group, your Company's human resource function is aligned to its global HR strategy, with intent to support its business strategy. It therefore derives robust support from the Group in areas of recruitment, training, appraisal, compensation, managing and rewarding performance, etc. Human Resources function ensures that all employees are aligned to the organisation's shared values, management principles and a high performance culture. Your Company strives to embrace best HR practices to become an "Employer of Choice". Your Company aims to maintain its competitive edge by ensuring the right talent for the right job. This is ensured by using multi-pronged selection tools like assessment centres, personality tests and one-on-one interviews. Our recruitment strategy centres on infusing quality talent aligned to the values of Linde with potential to take the organisation to a higher level of performance. Social networking sites are actively used - both as a source of candidate database and also as a platform to create strong employer brand. RISK MANAGEMENT POLICY: The management has taken all necessary steps to identify the elements of risks, if any. The management has implemented an effective and meaningful system to safeguard the assets of the company. The Board has to review the business plan at regular intervals and develop the Risk Management Strategy which shall encompass laying down guiding principles on proactive planning for identifying, analyzing and mitigating all the material risks, both external and internal viz. Environmental, Business, Operational, Financial and others. Communication of Risk Management Strategy to various levels of management for effective implementation is essential for achieving the goals of the organization. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointment Mr. Servesh Gupta, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. During the year, Ms. Nirmal Garg has been appointed as an Independent Directors for term of 5 years with effect from 31.03.2015. Also, Mr. Prem Sharma has been appointed as Chief Financial Officer of the Company with effect from 01st December,2014 respectively. PARTICULARS OF EMPLOYEES: In terms of the provisions of Section 197 of the Companies Act, 2013 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel] Rules, 2014, none of the Company's Employees who were in receipt of a remuneration not less than Rs. 60Lacs during the financial year; or the employee receipt of the remuneration for any part of that year , at a rate which, in aggregate, was notless was Rs.5 lacs per month and hence no particulars are required to be disclosed in this report. 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. The Remuneration Policy is stated in the Corporate Governance Report. Managerial Remuneration: During the financial year the Company has paid remuneration amounting to Rs. 100,000/- (One Lacs only] to Mr.Servesh Gupta Whole Time Director of the company. Receipt of any commission by Managing director / whole time director from a company or for receipt of commission / remuneration from it holding or subsidiary During the financial year the Managing director/ whole time director has not received any commission from the Company, its holding or subsidiary Companies. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL: During the financial year no order has been passed by the authorities which impacts the going concern status and company's operations in future. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS: The management has taken all necessary steps to plug the internal control weaknesses. The management has implemented an effective and meaningful system in place to safeguard the assets of the company. DEPOSITS: The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY: As per the Companies Act, 2013, companies having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or net profit of Rs. 5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR] Committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director and such company shall spend at least 2% of the average net profit of the company's three immediately preceding financial years. During the financial year 2014-15 the Company has not crossed the threshold limit for the Corporate Social Responsibility Committee as required under the Section 135 of the Companies Act, 2013 (as defined above]. So the company has not constituted the CSR committee and not done any activities defined under Schedule VII of the Companies Act, 2013. COMMITTEES OF THE BOARD: (a) Audit Committee The Audit Committee continued working under Chairmanship of Shri Anil Kumar Gupta with Shri Servesh Gupta and Shri Umesh Sharma as co-members. During the year, the sub-committee met onSix occasions with full attendance of all the members. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. Some of the important functions performed by the Committee are: Financial Reporting and Related Processes • Oversight of the Company's financial reporting process and financial information submitted to the Stock Exchanges, regulatory authorities or the public. • Reviewing with the Management the quarterly unaudited financial statements and the Auditors' Limited Review Report thereon/audited annual financial statements and Auditors' Report thereon before submission to the Board for approval. This would, inter alia, include reviewing changes in the accounting policies and reasons for the same, major accounting estimates based on exercise of judgement by the Management, significant adjustments made in the financial statements and / or recommendation, if any, made by the Statutory Auditors in this regard. • Review the Management Discussion & Analysis of financial and operational performance. • Discuss with the Statutory Auditors its judgement about the quality and appropriateness of the Company's accounting principles with reference to the Generally Accepted Accounting Principles in India (IGAAP]. • Review the investments made by the Company. All the Members on the Audit Committee have the requisite qualification for appointment on the Committee and possess sound knowledge of finance, accounting practices and internal controls. During the year under review, the Audit Committee held a separate meeting with the Statutory Auditors and the Chief Internal Auditor to get their inputs on significant matters relating to their areas of audit. (b) Remuneration Committee In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as the "Nomination and Remuneration Committee". (C)Risk Management Committee Business Risk Evaluation and Management is an on-going process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. The objectives and scope of the Risk Management Committee broadly comprises: • Oversight of risk management performed by the executive management; • Reviewing the BRM policy and framework in line with local legal requirements and SEBI guidelines; • Reviewing risks and evaluate treatment including initiating mitigation actions and ownership as per a pre-defined cycle; Defining framework for identification, assessment, monitoring, mitigation and reporting of risks. (D) Stakeholders' Relationship Committee In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Listing Agreement, the Board has renamed the existing "Shareholders'/Investors' Grievance Committee" as the "Stakeholders' Relationship Committee". The terms of reference of the Committee are: • transfer/transmission of shares/debentures and such other securities as may be issued by the Company from time to time; • issue of duplicate share certificates for shares/debentures and other securities reported lost, defaced or destroyed, as per the laid down procedure; • issue new certificates against subdivision of shares, renewal, split or consolidation of share certificates / certificates relating to other securities; • issue and allot right shares / bonus shares pursuant to a Rights Issue / Bonus Issue made by the Company, subject to such approvals as may be required; • to grant Employee Stock Options pursuant to approved Employees' Stock Option Scheme(s], if any, and to allot shares pursuant to options exercised; • to issue and allot debentures, bonds and other securities, subject to such approvals as may be required; • to approve and monitor dematerialization of shares / debentures / other securities and all matters incidental or related thereto; • to authorize the Company Secretary and Head Compliance / other Officers of the Share Department to attend to matters relating to non-receipt of annual reports, notices, non-receipt of declared dividend / interest, change of address for correspondence etc. and to monitor action taken; • monitoring expeditious redressal of investors / stakeholders grievances; • all other matters incidental or related to shares, debenture. (f) Independent Directors' Meeting During the year under review, the Independent Directors met on 31.03.2015 inter alia, to discuss: • Evaluation of the performance of Non-independent Directors and the Board of Directors as a whole. • Evaluation of the performance of the chairman of the Company, taking into account the views of the Executive and Non-executive directors. • Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties. • All the Independent Directors were present at the Meeting. NOMINATION & REMUNERATION COMMITTEE POLICY: The provisions of Section 178(1] relating to constitution of Nomination and Remuneration Committee. The committee frames the policy to translate the following business: • Succession planning of the Board of Directors and Senior Management Employees; • Identifying and selection of candidates for appointment as Directors / Independent Directors based on certain laid down criteria; • Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions; • Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and senior management employees and their remuneration; Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM: The provisions of Section 177 subsection 10 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers] Rules, 2013 is not applicable to the Company. CORPORATE GOVERNANCE: As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by your Company, together with a certificate from Mr. Udit Aggarwal, Chartered Accountants on compliance with Clause 49 of the Listing Agreement with Indian Stock Exchanges. This certificate is given in Annual Report in Annexure IV MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Management's Discussion and Analysis Report on Company's performance - industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable, are presented in this Annual Report. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &REDRESSAL) ACT, 2013: The Company has adequate system for prevention of Sexual Harassment of Women at workplace and has set up cell for the same. During the year Company has not received any complaint of harassment. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5] of the Companies Act 2013, your directors confirm that: a] in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b] the directors had 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 31st March, 2015 and of the profit /loss of the Company for that period; c] the directors had 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; d] the directors had prepared the annual accounts on a going concern basis; e] As required under Section 134(5](f] of the Companies Act, 2013, and according to the information and explanations presented to us, based on the review done by the Audit/Risk and Compliance Committee and as recommended by it, we, the Board of Directors, hereby, state that adequate systems and processes, commensurate with the size of the Company and the nature of its business, have been put in place by the Company, to ensure compliance with the provisions of all applicable laws as per the Company's Global Statutory Compliance Policy and that such systems and processes are operating effectively. f] the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT: The Board place on record their appreciations of the whole hearted and sincere co-operation received by the Company during the year from the employees, customers/ clients, bankers and various Government authorities at all levels. For and on behalf of the Board of Directors of USG Tech Solutions Limited Sd/- Satish Kumar Gupta Director DIN-01451050 Address : 4A/1,RAJ NARAIN ROAD, CIVIL LINES, DELHI, 110054, Delhi, INDIA Date: 04/09/2015 Place: Noida |