BOARD’S REPORT Dear Shareholders, Your Directors have pleasure in presenting their Sixth Annual Report together with the Audited Accounts of the Company for the period ended 31st March, 2015. 2. Review of Performance: The Companies growth considering the past few years performance was outstanding. The Company is giving its best for increasing profits from year to year. The total revenue from the operations for the year ended March 31, 2015 amounted to Rs.16.53 Crores, as against Rs.14.30 Crores in a previous financial year 2013-14, and has increased by 15.59% over the last year. Major events during the year: Post completion of financial year 2013-14, the Company got listed on Bombay Stock Exchange under “T” segment vide: BSE Notice No: 20140613-09 dated 13th June 2014 with effect from 17th June 2014 with the scrip Code: 538401 Preferential allotment The Members at their Annual General Meeting held on 22nd December, 2014 passed a special resolution according their consent to the Board for issue and allotment of 4,00,000 equity shares of Rs. 10/- each at a premium of Rs.15/- per share to Mr. Narendra Mahajani, Mr. B.K. Tendulkar, Mrs. Vasundhara Atre, Mr. Vinayak Deshpande and Mr. Bipin Kulkarni. on preferential allotment basis. Accordingly, the Board allotted 4,00,000 equity shares on 10th February, 2015 The Company has complied with all applicable provisions of the Act, listing agreement and SEBI regulation. Dividend: With a view to conserve resources for funding any future business requirements and expansion plans, your Directors have not recommended any dividend for the current period. Directors and Key Managerial Personnel: Mr. B. K. Tendulkar is the Chairman and Managing Director of the Company. Mr. N. P. Mahajani and Dr. N. S. Paranjape are Non Executive Non Independent Directors of the Company. Mr. Murlidharan Nair and Mrs. Vasundhara Atre are Non Executive Independent Directors of the Company. During the year Mrs. Vasundhara Atre was designated and Mr. Ashish Inamdar was appointed as Non Executive Independent Directors for 5 years i.e. upto 21st December, 2019 pursuant to the sections 149, 152 and 160 of the Companies act, 2013 in the Annual General Meeting held on 22nd December, 2014. During the year under consideration, Mr. Ashish Inamdar, Non Executive Independent Director has ceased to be associated with company from 5th March, 2015 due to the sad demise. In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Narendra Prabhakar Mahajani (DIN: 01048676), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has confirmed that he is not disqualified from being appointed as Director in terms of Section 164 of the Companies Act, 2013. A brief resume of Mr. Narendra Prabhakar Mahajani, nature of his expertise in specific functional areas and names of the Companies in which he holds directorship and / or membership / chairmanship of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange/s, is given in the Corporate Governance Report which may be taken as forming part of this Report. All Independent Directors have given declarations that they meet with the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. None of the Non-Executive Directors had any pecuniary relationships or transactions with the Company which may have potential conflict with the interests of the Company at large. Committees of the Board: The Board of Directors of your Company has constituted the following committees in terms of the provisions of the Companies Act, 2013 and the Listing Agreement: Audit Committee Nomination and Remuneration Committee Stakeholders’ Relationship Committee The details regarding composition and meetings of these committees held during the year under review as also the meetings of the Board of Directors are given in the Corporate Governance Report which may be taken as forming part of this Report. Board Evaluation: In accordance with the provisions of the Companies Act, 2013 read with the rules made there under and the Listing Agreement, the Board has carried out formal annual evaluation of its own performance, performance of its various Committees and individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which may be taken as forming part of this Report. Policy on Nomination and Remuneration of Directors, KMPs and other employees: In terms of sub-section 3 of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee of the Company has laid down a policy on the selection and appointment of Directors and the Senior Management of the Company and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters. Extract of Annual Return: The extract of the Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013 in prescribed format is attached as “Annexure A” to this Report. Risk Management: The details of the risk management framework adopted and implemented by the Company are given in the Corporate Governance Report which may be taken as forming part of this Report. Adequacy of Internal Controls with reference to Financial Statements: The company is in process of building up processes and standard operating guidelines in all areas of operations. Standard processes ensure smooth functioning of activities and zero ambiguity in the mind of people who are actually executing the operations. Vigil Mechanism: The Company has established a vigil mechanism to enable directors and employees to report genuine concerns and grievances about any incident of violation / potential violation of law or the Code of Conduct laid down by the Company. The mechanism lays down the overall framework and guidelines for reporting genuine concerns. The details of this mechanism are given in the Corporate Governance Report which may be taken as forming part of this Report. These are also posted on the website of the Company. Particulars of loans, guarantees and investments: Full particulars of loans and guarantees given and investments made under Section 186 of the Companies Act, 2013 are given separately in the financial statements of the Company which may be taken as forming part of this Report. Transactions with related parties: Particulars of contracts or arrangements with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 in prescribed format are attached as “Annexure B” to this Report. Directors’ Responsibility Statement: Pursuant to the requirements under 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed: 1. that in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; 2. that 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 31 st March, 2015 and of the profit of the Company for the year ended as on that date; 3. that 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; 4. that the directors had prepared the annual accounts for the financial year ended 31st March, 2015, on a ‘going concern’ basis. 5. that the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; 6. that 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. Management Discussion and Analysis Report: The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is given separately which may be taken as forming part as “Annexure C” to this Report. Report on Corporate Governance: A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report and a Certificate from the Auditors of the Company, confirming compliance with the provisions of Corporate Governance, is attached “Annexure D” to this Report. Statutory Auditors and its Report: M/s DMKH & Co, Chartered Accountants, Mumbai, (Registration Number – 116886W) the Statutory Auditors of the Company hold office until the conclusion of the Annual General Meeting of the Company for the year ended 2018-2019 (subject to ratification of appointment by the members at every Annual General Meeting held after this Annual General Meeting) The Statutory Auditors viz. DMKH & Co, Chartered Accountants, Mumbai, (Registration Number – 116886W) have confirmed for their ratification, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 139 of the said Act. Observations of Statutory Auditors for the year ended 31st March 2015: Point iv. of Annexure To Independent Auditors’ Report : In our opinion and according to the information and explanations given to us there are not adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to the purchase of inventory, sale of goods and services, Trade Payable and Trade Receivable. During the course of our audit, other than aforesaid we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. Management Reply: The Company is in the process of setting up adequate internal control commensurate with the size of the Company and the nature of its business with regards to the purchase of inventory, sale of goods and services, Trade Payable and Trade Receivable. Point vii. (a). of Annexure to Independent Auditors’ Report : According to the information and explanation given to us the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including income tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable except in case of deduction and depositing of Professional tax of Company. Management Reply: The Company is regular in depositing its statutory dues with appropriate authorities and takes appropriates measures for the payment within the statutory period. However, due to pendency of some statutory approval and inadvertently delay, the Company could not complied with statutory provisions relating to professional tax. However, the Company ensures to comply with the said provisions in ensuing financial year. Secretarial Auditor and its Report: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Vijay Kumar Tiwari & Associates, Company Secretary in Practice to undertake the secretarial audit of the Company. The Secretarial Audit Report given by the Secretarial Auditor is attached as “Annexure E” to this Report. Observations of Secretarial Auditors for the year ended 31st March 2015 and Management Reply: Observation: a. The Companies has not appointed Internal Auditor which is required to be appointed under sec. 138 of the Companies Act, 2013. b. The Company has also not appointed Company Secretary in whole time employment of the Company and Chief Financial Officer (CFO) which is required to be appointed as per Sec. 203 of the Companies Act, 2013. Reply: The Company is in the process of finding appropriate candidate for the position of Company secretary and Chief Financial Officer and it will ensure to appoint such persons at the earliest in ensuing financial year. Further, with regards to appointment of internal auditor as per sec. 138 of the Companies Act, 2013, Company will take adequate measures for the same. Public Deposits: During the year under review, your Company has not accepted or invited any deposits from public within the meaning of Chapter V of the Companies Act, 2013 and applicable rules made there under or any amendment or re-enactment thereof. Particulars of remuneration to employees, etc.: The particulars of remuneration to directors and employees and other related information required to be disclosed under Section 197 (12) of the Companies Act, 2013 and the Rules made there under are given in “Annexure F” to this Report. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: (a) Conservation of Energy Technology Absorption: 1. Steps taken or impact on conservation of energy: All the manufacturing facilities continued their efforts to reduce the specific energy consumption. Specific and total energy consumption is tracked at individual factory/block level and also at consolidated manufacturing level. Apart from regular practices and measures for energy conservation, many new initiatives were driven across the units. Some of them are mentioned below • Use of natural Lightning and natural ventilation • LED Lights in office in place of CFL in offices • Encouraging Go Green Initiatives 2. The steps taken by the company for utilizing alternate sources of energy: The manufacturing units continue to put in effort to reduce specific energy consumption. The Company is evaluating other sources of energy. 3. Capital investment on energy conservation equipments: N.A (b) Technology Absorption Efforts made towards technology absorption, adaptation and innovation and Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development, import substitution, etc The Company is in Process of Developing the ways for technology a bsorption, adaptation and innovation. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year) : N.A Expenditure Incurred on Research and Development : N.A (c) Foreign Exchange Earnings and Outgo: The Information on 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 furnished in the Notes to Accounts. Significant and material orders passed by the Regulators, etc.: There are no significant and material orders passed by the Regulators / Courts / Tribunals which would impact on the going concern status of the Company and its future operations. Acknowledgements: Your Directors take this opportunity to express their appreciation to the Investors, Banks, Financial Institutions, Clients, Vendors, Central and State Governments and other Regulatory Authorities for their assistance, continued support, co-operation and guidance. For and on behalf of the Board of Directors For Maestros Electronics & Telecommunications Systems Limited Sd/- B. K. Tendulkar Managing Director Place: Navi Mumbai Date: 28.08.2015 |