Directors' Report To, The Members Tarmat Limited 1.Your Directors have pleasure in presenting their 30th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015. 2. Performance of the company: The turnover during the year ending 31 st March 2015 was Rs. 6,620.51 lacs against Rs.10,531.95 lacs for the previous year ended 31 st March 2014. The overall infrastructure scenario in India seems to be in turmoil, due to which projects are not being sanctioned, and projects previously sanctioned are finding it hard to get the necessary clearances from statutory authorities. Due to this various clearances issues on ongoing projects, has caused an extreme delay in payment receivables, which in turn has caused a substantial increase on overall debt, causing a serious increase in interest cost. Due to this substantial increase in finance cost, the bottom line of the organization to taken a hard hit. Future prospects A consistent endeavor is made in acquiring of specialized projects such as Airfield pavements in which the organization specializes, and with government proposing huge investments in the Infrastructure scenario especially regional Airports, we expect our organization to acquire substantial number of projects in our portfolio. Capital and Finance: A Major concern for the origination is the high interest cost, which was found extremely difficult to match with the previous trend in delayed payment receipts. In order to reduce the overall debt, the organization has identified certain key assets, which can be en cashed, and would bring in a substantial amount of capital, further helping in reduction of interest. 3. Dividend: As you are aware, during the year 2014-15 the performance did not match expectation. Cash flow has not substantially improved as the company did not receive disbursements from customers on timely basis. To regularise the funds flow, your directors decided to retain the resources and hence do not recommend any dividend for this year too. 4. Reserves: There are no transfers to Reserves during the current Financial year. 5. Directors and Key Managerial Personnel: Mrs Saramma Varghese, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer herself for reappointment. During the year, Mr. Pratul Dube has been appointed as an Additional Director w.e.f 14th February, 2015. Mr. Anil G Joshi has resigned as Director of the Company w.e.f. 11th December, 2014. Mr. Pratul Dube holds office up to the date of ensuing Annual General Meeting of the Company. The company has received notice from the member of the company for his appointment as a Director of the Company. Mr. Pratul Dube meets the criteria of independence, hence he can be appointed as an independent Director not liable to retire by rotation. Mr. Shreekumar Nair has resigned as Company Secretary with effect from 31st May 2014. Mr. S. Chakraborty has been appointed as Company Secretary with effect from 12th August, 2014. Mr. Anindya Mitra has resigned as Chief Financial Officer. Further Mr. Shridhar Shetty has been appointed as a CFO w.e.f. 23rd August, 2014 6. Material changes affecting the Nature of Business and Financial position of the Company: There were no material changes affecting the nature of business and financial position of the Company during the year under review expect default in repayment of interest due to Vijay Bank which has classified the account as "Non Performing Asset". 7. Particulars of Employees: The table containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Companies act, 2013, with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as ANNEXURE -II. There are no employees in the company during the year under review who is in receipt of remuneration of Rs.60,00,000 p.a. or Rs. 5,00,000 p.m. if employed during the part of the year. 8. Meetings: During the year Four Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 9. Declaration by an Independent Directors The Board of Directors declare that the Independent Directors Mr. Chandrakant Sanghavi Shantilal, Mr. Ramesh Chander Gupta and Mr. Pratul Govind Dube are: a) in the opinion of the Board, are persons of integrity and possesses relevant expertise and experience; b) (i) who were or were not a promoter of the company or its holding, subsidiary or associate company (ii) who are not related to promoters or directors in the company, its holding, subsidiary or associate Company; c) Who have or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year; d) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company or their promoters, or directors, amounting to two percent or more of its gross turnover of total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; e) Who, either himself nor any of his relatives - (i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial year immediately preceding the financial year in which he is proposed to be appointed; (ii) is or has been an employee or propriety or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of - 1. a firm of auditors or company secretaries in practice or cost auditors or the company or its holding, subsidiary or associate company; or 2. any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of the gross turnover of such firm; (iii) holds together with his relative two per cent, or more of the total voting power of the company; or (iv)is a Chief Executive or director, by whatever name called, of any nonprofit organization that receives twenty-five percent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or f) Who possesses such other qualification as may be prescribed. 10. Familiarisation programme for Independent Directors: The Company proactively keeps its Directors informed of the activities of the Company, its management and operation and provides an overall industry perspective as well as issues being faced by the industry. The details of various familiarisation programmes provided to the Directors of the Company is available on the Company's website. 11. 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. 12. Composition of Audit Committee: The Audit Committee comprises of four members: Mr. A.G. Joshi, Chairman, Mr. C.S. Sanghavi and Mr. R.C. Gupta, independent directors, Mrs. Saramma Varghese, Executive Director and Mr. Pratul Dube Independent Director. Mr. S. Chakraborty, Company Secretary also acts as the Secretary to the Audit Committee. On resignation of Mr. A.G. Joshi from the Board of the company he ceased to be the member of the Audit committee and Mr. Pratul Dube the new Independent Director has been appointed in his place. 13. Internal Financial Control: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. 14. Auditors: The Auditors, M/s. Hegde & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment from the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM. They have submitted a certificate to the effect that the proposed re-appointment if made will be in accordance with Section 141 of the Companies Act, 2013. 15. Auditors' Report: The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 16. Disclosure about Cost Audit: As per the Cost Audit Orders, Cost Audit is applicable to the Company for the FY 2015-16. In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Mr. Satish Ramanlal Shah, Cost Accountants have been appointed as Cost Auditors to conduct the audit of cost records of your company for the financial year 2015-16. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM. The Company submits its Cost Audit Report with the Ministry of Corporate Affairs. 17. Secretarial Audit Report: In terms of Section 204 of the Act and Rules made there under, M/s. Prashant Diwan, Practicing Company Secretary was appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as ANNEXURE III to this report. The Company has received the Secretarial Audit report with two observations on which the management replies are as below. 1. Notice as required under Law was obtained from a shareholder for election of the Director but without Deposit. However since the director was duly elected by the shareholders at the last AGM the observation has become redundant. 2. The amount of Rs.1,77,000 will be transferred to the appropriate Fund during the current year. 18. Details of Subsidiary, Associates & Joint Ventures: The Company does not have any Subsidiary, Associates and Joint Ventures. 19. 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 policy of Vigil Mechanism and Whistle Blower can be accessed at www.tarmat.in . 20. Risk Management: The company has devised and implemented a mechanism for risk management and has developed a Risk Management policy. The policy provides for constitution of a Risk Management Committee which will work towards creating a Risk Register, identifying internal and external risks and implementing risk mitigation steps. The committee will on a quarterly basis provide status update to the Board of Directors of the Company. 21. 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. 22. Deposits: The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 23. Particulars of loans, guarantees or investments under section 186 The Company has not made any Loans and Guarantee pursuant to Section 186 of the Companies Act, 2013. Further, there is no new investment made by the Company during the year pursuant to Section 186 of the Companies Act, 2013, however details of investments made are detailed in Note 12 of the Financial Statements for the year ended 31st March, 2015. 24. Particulars of contracts or arrangements with related parties: The Company has not entered into any contracts or arrangements with related parties referred to in Section 188(3) of the Companies Act, 2013. 25. Corporate Governance: As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis, and the Auditor's Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. 26. Conservation of energy, technology absorption and foreign exchange earnings and outgo: The information as required under Section 134(3) (m) of The Companies Act, 2013 read with Rule" 8(3) of The Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings is given below: i. Conservation of energy:- a) Improvisation and continuous monitoring of Power Factor and replacement of weak capacitors by conducting periodical checking of capacitors. b) The Company has endeavored to optimize the use of energy resources and taken adequate steps to avoid wastage and use latest production technology and equipment. c) Though the Company is making adequate use of energy resources it is looking forward to setup necessary energy conservation equipments in near future. ii. Technology Absorption:- a) The Company continues to use the latest technologies for improving the productivity and quality of its services and products. b) The Company's operations do not require significant import of technology. iii. Foreign exchange earnings and Outgo:- The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is NIL 27. Directors' Responsibility Statement: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that— (i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) 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 at the end of the financial year and of the profit and loss of the company for that period; (iii)the directors had 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; (iv)the directors had prepared the annual accounts on a going concern basis; (v) the directors, further state that they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (vi)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. 28. Orders passed by the Regulators or Courts or Tribunals:- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company's operation in future. 29. 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: Sd/-CHAIRMAN Date: 08th August, 2015 Place: Mumbai. |