BOARD'S REPORT TO THE MEMBERS, Your Directors have pleasure in presenting the 28th Annual Report of the company together with the Audited Financial Accounts for the year ended 31st March, 2015. REVIEW OF BUSINESS OPERATION AND FUTURE PROSPECTS: During the year the Company has made Net turnover of Rs. 221.23 Lacs/- in comparison to previous year of Rs. 207.34 Lacs i.e increased by 6.70% and the company has incurred loss of Rs. 3,18.94 Lacs /- in comparison to Profit after tax of previous year of Rs. 12.02 Lacs/Company has incurred loss due to change in depreciation system and Bad Debt written off. DIVIDEND As the Company has incurred loss during the year, your Directors do not recommend any dividend. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Your Company has not made transaction forming part of section 186 of the Companies Act, 2013. TRANSFER TO RESERVES Company has not transferred any amount of Reserves DEPOSITS We have not accepted any deposit and as such no amount of Principal or interest was Outstanding as of the Balance Sheet PARTICULARS OF CONTRACT OR ARRANGEMENTS MADE WITH RELATED PARTIES Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 03 to the Board's report MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT No material changes and commitment affecting the financial position of the Company occurred between the end of financial year to which this financial statement relate and the date of this report. INTERNAL FINANCIAL CONTROLS 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 was observed INSURANCE The assets of the company including buildings, plant & machinery, stocks, etc. Wherever necessary and to the extent required have been adequately insured against various risk. SEGMENT REPORTING The Company is engaged in manufacturing of Auto Components and therefore there is only one segment, hence disclosures requirement in accordance with the Accounting standards on segment reporting AS-17 are not applicable INDUSTRIAL RELATIONS & HUMAN RESOURCES: The company treats its all manpower as a valuable assets and growth of the company is possible through entire workforce working in the company. The industrial relation with workmen and staff continued to be extremely cordial during the year under review. The Board wishes to take place on record its appreciation for the valuable services rendered by its entire workforce PARTICULARS OF EMPLOYEES Disclosures pertaining to remuneration and other details as required under Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is not applicable to the Company as the Company have no such Employees who were drawing remuneration in excess of the limits prescribed. Particulars of Employees are attached with this report as Annexure 04. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management discussion and analysis report for the year under review, as stipulated under clause 49 of the Listing Agreement, is presented in separate section and forms part of the Annual Report CORPORATE GOVERNANCE CORPORATE GOVERNANCE is a system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community and considering the importance of Corporate Governance, your Company is committed to maintaining the highest standards of corporate governance and adheres to the corporate governance requirement set out by SEBI. All conditions of corporate governance as required under clause 49 of the listing agreements with stock exchanges have been complies with and duly audited. A certificate from the statutory auditors of the company regarding compliance of conditions of corporate governance has been obtained and is enclosed to the report of corporate governance CEO CERTIFICATION Pursuant to the provisions of clause 49 of the Listing Agreement, the CEO Certification for preparation of financial statements etc. is annexed in this report. NUMBER OF MEETINGS OF THE BOARD The Board has met Six(6) times during the financial year, the details of which are given in the Corporate Governance Report and forms part of Annual Report. DIRECTORS Shri Rameshkumar Durlabhjibhai Virani (DIN 00313236) retires at the ensuing Annual General Meeting pursuant to provision of section 152(6) of the Companies Act, 2013 and being eligible offer themselves for re-appointment. Mrs. Aarti C. Sodha appointed as Independent Women director on the Board of the Company w.e.f 12th September, 2014 DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessary Declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets with the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Corporate Governance Report which forms part of this report as Annexure 02. Further, information about directors' sitting fees has also explained in the same report. BOARD EVALUATION As per Companies Act, 2013 Board has made annual evaluation of its own performance and also of its committees and Individual Directors. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. Policy describing the manner of Evaluation is furnished in Corporate Governance Report which forms part of this report as Annexure 02. COMMITTEES OF THE BOARD At present the Company is having 5(Five Committees) as mentioned below: - AUDIT COMMITTEE: The Company has an adequately qualified Audit Committee constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and clause 49 of the listing agreement. The details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report. - NOMINATION AND REMUNERATION COMMITTEE: The Company has also constituted Nomination and Remuneration Committee Pursuant to provision of section 178 of the Companies Act, 2013 and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report. - STAKEHOLDERS RELATONSHIP COMMITTEE: To consider and resolve the Grievances of Stakeholders, the Company has framed Stakeholders Relationship Committee in accordance with the provision of section 178 of the Companies Act, 2013 and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report. - CORPORATE SOCIAL RESOPONSIBILIY COMMITTEE: The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the Company and the details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report. - RISK MANAGEMENT COMMITTEE The Company has framed Risk Management Committee which mainly aims at Identification of Risk level at various stages of Business operation/ activities and to manage the Risk and evaluation of RMS i.e Risk Management System. The details of composition of Committee and other relevant details is given in the Corporate Governance Report which forms part of this Annual Report. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement as enumerated under:- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed; (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 at the end of the financial year and of the profit and 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 this Act 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; and (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 systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS Pursuant to provision of section 139 of the Companies Act, 2013, Arun M. Kothari, Chartered Accountants (Membership No. 108669), Statutory Auditors of the Company have been appointed to hold office till the conclusion of Annual General Meeting of the Financial year 2016-17, subject to ratification by the Members at the ensuing Annual General Meeting and Arun M. Kothari, being eligible offers their services to continue to act as a Auditors of the Company. STATUTORY AUDITORS' REPORT The observations of Auditors in their report read with the relevant note to accounts in schedule are self-explanatory and do not require further explanation. The Audit Report does not contain any qualification, reservation or adverse remark SECRETARIAL AUDITOR Pursuant to Provision of section 204(1) of the Companies Act, 2013,the Board has appointed M/s. K. P. Rachchh & Co., Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. SECRETARIAL AUDITORS' REPORT The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith to this Report. The qualifications put up in the Secretarial Audit Report are self explanatory. Secretarial Auditors' Report in the prescribed format i.e. MR-3 in attached in this report as Annexure 05 EXTRACT OF ANNUAL RETURN The extracts of Annual Return as provided under Section 134(3)(a) and sub-section (3) of section 92 read with Rule 12(1) of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 06 and is attached to this Report. CORPORATE SOCIAL RESPONSIBILITY The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of the Company. However in this year as company has incurred loss, it is not possible for company to carry out any CSR Activities but your company understands the value of CSR and definitely will work for the betterment of Society. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 07 attached to this report. WHISTLE BLOWER POLICY (VIGIL MECHANISM) The Company has in place a whistleblower policy, to support the Code of Business Ethics. This policy documents the Company's commitment to maintain an open work environment in which employees, consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected fraud or any violation of Company's Code of Business Ethics at a significantly senior level without fear of intimidation or retaliation. The said policy is placed on the website of the company. ACKNOWLEDGMENT: Your Directors wish to place on record their sincere appreciation for the continued cooperation, guidance, support and assistance during the year under report by our Bankers, all the customers, suppliers of the Company including Government agencies. The Board of Directors also wishes to express its appreciation for the efforts and contribution made by the employees at all levels during the year under report. For and on behalf of, Sar Auto Products Ltd. Rameshkumar D. Virani Chairman - Managing Director (DIN: 00313236) Date : 31st July, 2015 Place: Rajkot |