DIRECTOR'S REPORT Dear Members, We are pleased to present the report on our business and operations for the year ended 31st March, 2015. a. Review of operations and affairs of the Company: Standalone: During the year under review, the Company has earned a profit before Interest, Depreciation & Tax of Rs. 10.40 lacs as compared to previous year Rs. 16.07 lacs. The net profit for the year under review has been Rs.3.70 lacs as compared to the previous year net profit Rs. 1.72 lacs. Your Directors are continuously looking for avenues for future growth of the Company in Commercial Trading & Distribution Industry. Consolidated: During the year under review, the Company has earned a profit before Interest, Depreciation & Tax of Rs. 10.15 lacs as compared to previous year Rs. 16.20 lacs. The net profit for the year under review has been Rs.3.44 lacs as compared to the previous year net profit Rs. 1.81 lacs. Your Directors are continuously looking for avenues for future growth of the Company in Commercial Trading & Distribution Industry. b. Dividend: Your Directors do not recommend any dividend for the year under review, and has decided to retain the surplus with the company for furthering the growth of the Company. c. Transfer to Reserves: The entire net profit of the company for the FY 2014-2015 is retained as Surplus. The Company has not proposed to transfer any amount to any reserve. d. Deposits: During the year under review, your company has not accepted any deposits from the public within the meaning of section 76 of the Companies Act 2013 and the rules there under. There are no public deposits, which are pending for repayment. e. Particulars of loans, guarantees or investments: Loans and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. Further it is informed that the Company has neither given any guarantees nor provided any security during the Financial Year under review. f. Particulars of contracts or arrangements made with related parties: The company has not entered in to any contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, during the financial year under review. The Policy on Related Party Transaction is available on our website www.carewellindustriesltd.com g. Variation in market Capitalization: The Company during the financial year 2014-2015 came out with Initial Public Offer at the BSE SME Platform; subsequently the post issue Equity Share Capital of the Company was listed and admitted to dealing at BSE Limited- SME segment w.e.f., 12th August, 2014. h. Management's Discussion and Analysis: Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 52 of the Listing Agreement with the Stock Exchanges, is appended as Annexure I to this report. i. Director's Responsibility Statement: Pursuant to Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; (ii) the directors have 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 have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (erstwhile Companies Act, 1956) for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the directors have prepared the annual accounts on a going concern basis; (v) the directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; (vi) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. j. Recommendations of the Audit Committee: During the year under review, all the recommendations made by the Audit Committee were accepted by the Board. 2. Human Resource Management: To ensure good human resources management at Carewell Industries Limited, we focus on all aspects of the employee lifecycle. This provides a holistic experience for the employee as well. During their tenure at the Company, employees are motivated through various skill-development, engagement and volunteering programs. All the while, we create effective dialogs through our communication channels to ensure that the feedback reach the relevant teams, including the leadership. a. Particulars of employees: The table containing the details of remuneration of Directors and Employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure II to this report. There are no employees who were in receipt of remuneration in excess of the ceiling prescribed in the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company currently does not provide any Employee Stock Option Scheme/Employee Stock Purchase Scheme to its employees. b. Key Managerial Personnel: i. Managing Director or Chief Executive Officer or Manager and in their absence, a Whole-Time Director: > Mr. Kesavan Suresh Kumar (DIN:06805795) was the Executive Director of the Company from 05th February, 2014 till 31st May, 2015. > Mr. Baskaran Sathya Prakash (DIN:01786634) is the Managing Director of the Company w.e.f., 01st June, 2015 till the date of this Report. ii. Company Secretary: > Ms. Megha Agarwal was functioning as the Company Secretary of the Company till, 06th December, 2014. The Board is in the Process of identifying a suitable candidate for the position of Company Secretary. iii. Chief Financial Officer: > Mr. M. Suguna has been appointed as the CFO of the Company w.e.f., 15th May, 2014. 3. Corporate Governance: Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders' expectations. At Carewell Industries Limited, it is imperative that our company affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of our stakeholders. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The Report on corporate governance as stipulated under Clause 52 of the Listing Agreement is appended as Annexure III to this report. a. Auditors' certificate on corporate governance: As required by Clause 52 of the Listing Agreement, the auditors' certificate on corporate governance is appended as Annexure IV to this report. b. Compliance Department: During the year under review, following changes took place with respect to the Compliance Officer of the Company: > Ms. Megha Agarwal was functioning as the Company Secretary cum Compliance Officer of the Company till, 06th December, 2014 > Subsequently Mr. Kesavan Suresh Kumar (DIN: 06805795), Executive Director of the Company was appointed as the Compliance Officer of the Company at the Board Meeting held on 06th December, 2014. > Mr. Kesavan Suresh Kumar (DIN: 06805795), Executive Director of the Company resigned from the Directorship of the Company with effect from 31st May, 2015, thus also vacating the position of Compliance Officer. > Mr. Baskaran Sathya Prakash (DIN: 01786634) was appointed as the Managing Director of the Company with effect from 01st June, 2015 at the Board meeting held on 30thMay, 2015, further at the same meeting he was also appointed as the Compliance Officer of the Company with effect from 1st June, 2015 > The Board is in the Process of identifying a suitable candidate for the position of Company Secretary cum Compliance Officer. The compliance department of the company is responsible for independently ensuring that the operating and business units comply with regulatory and internal guidelines. New instructions/guidelines issued by the regulatory authorities were disseminated across the company to ensure that the business and business units operate within the boundaries set by the regulators and that compliance risks are suitably monitored and mitigated in course of their activities & processes. c. Information on the Board of Directors of the Company: During the year under review, following changes took place in the Composition of Board of Directors of the Company; (i) The Board of Directors of the Company at the Meeting held on 15th May, 2014 approved the following; a. Appointment of Mr. Balaji (DIN: 05276267) as the Additional Director cum Independent Director w.e.f., 15th May, 2014 to hold office till the conclusion of the ensuing Annual General Meeting. b. Taking on record the resignation of Mr. Sundaram Sankaranarayanan (DIN: 00975329), from the Directorship of the Company with effect from 10th May, 2014. (ii) The Shareholders at the Annual General Meeting of the Company held on 05th August, 2014 approved the following; a. Re-appointment of Mrs. Rathinamala (DIN: 02711992), Director who retied by rotation at the Annual General Meeting. b. Regularization and Appointment of Mr. Kesavan Suresh Kumar as Executive Director of the company for a period from 05th February, 2014 to 04th February, 2017 c. Regularization and Appointment of Mr. Murari Lal Kanodia (DIN: 05353299), as Independent Director of the Company to hold office for five consecutive years, for a term upto 31st March 2019 d. Regularization and Appointment of Mr. Balaji (DIN:05276267) as Independent Director of the Company to hold office for five consecutive years, for a term upto 14th May, 2019 (iii) The Board of Directors of the Company at the Meeting held on 30th May, 2015 approved the following; a. Appointment of Mr. Baskaran Sathya Prakash (DIN: 01786634), as the Additional Director w.e.f., 30th May, 2015 to hold office till the conclusion of the ensuing Annual General Meeting. b. Taking on record the resignation tender by Mr. Kesavan Suresh Kumar (DIN:06805795), Executive Director of the Company expressing his inability to continue as Executive Director of the Company and the same was accepted by the Board and he was relieved from the Directorship of the Company with effect from 31st May, 2015. c. Appointment of Mr. BaskaranSathya Prakash (DIN: 01786634), as the Managing Director of the Company for a period of three years with effect from 01st June, 2015 to 31st May, 2018 subject to the approval of the shareholders of the Company. In compliance with the Companies Act, 2013 the following directors are proposed to be appointed as Director/Independent Directors/Executive Director of the Company by the approval of the Share Holders of the Company; (i) Mr. BaskaranSathya Prakash (DIN: 01786634) be regularized as the Director of the Company and further his appointment as Managing Director of the company for a period Three years with effect from 01st June, 2015 till 31st May, 2018 be approved by the shareholders of the Company. d. Board Diversity: The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website www.carewellindustriesltd.com e. Details with regards to meeting of Board of Directors of the Company: During the FY 2014-2015, 10 (Ten) meetings of the Board of Directors of the Company were held. For further details with regards to the meeting of Board of Directors, please refer to the Corporate Governance Report which forms part of this Report. f. Policy on directors' appointment and remuneration: The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on the date of this report, the Board consists of 4 Members, 1 of whom is an Executive Director and 1 of whom is an Non-Executive Director and the 2 are Independent Directors. The Board periodically evaluates the need for change in its composition and size. The Policy of the Company on Director's appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of director and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board, is appended as Annexure V to this report. We affirm that the remuneration paid to the director is as per the terms laid out in the said policy. g. Declaration by Independent Directors: The Company has received necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 52 of the Listing Agreement. h. Training of Independent Directors: Every new Independent Director at the time of appointment is issued a detailed Appointment Letter incorporating the role, duties and responsibilities, remuneration and performance evaluation process, Code of Conduct and obligations on disclosures. Further every new Independent Director is provided with copy of latest Annual Report, the Code of Conduct, the Code of Conduct for Internal Procedures and to Regulate, Monitor and Report Trading by Insiders ("Code of Conduct - PIT") and the Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information (the "Fair Practice Code"), Tentative Schedule of upcoming Board and Committee meetings. The Company through its Executive Directors / Key Managerial Personnel conducts programs / presentations periodically to familiarize the Independent Directors with the strategy, operations and functions of the Company. Thus such programs / presentations provides an opportunity to the Independent Directors to interact with the senior leadership team of the Company and help them to understand the Company's strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management and such other areas as may arise from time to time. The Policy on the Familiarization Program for Independent Directors is available on our website www.carewellindustriesltd.com i. Board's Committees: Currently, the Board has three committees: the Audit Committee, the Nomination and Remuneration Committee, and the Stakeholders Relationship Committee. All Committees are appropriately constituted. A detailed note on the Board and its committees, including the details on the dates of Committee Meetings is provided under the Corporate Governance report which forms part of this Report. The composition of the committees and compliances, as per the applicable provisions of the Act and Rules, are as follows: j. Board Evaluation: The board of directors has carried out an annual evaluation of its "own performance", "Board committees" and "individual directors" pursuant to the section 134(3) of the Companies Act, 2013. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole was evaluated, The same was discussed in the board meeting that followed the meeting of the independent Directors at which the report as submitted by the Independent Directors was taken on record and discussed. k. Listing: Your Directors takes immense pleasure in informing you that, the Initial Public Offer as brought out by the Company during the FY 2014-2015 was successful and consequently the post issue Equity Shares of your Company were listed and admitted for dealing at BSE SME Platform w.e.f 12th August, 2014. The Scrip Code for the Script of your Company at BSE is "538579" Your Company paid the Listing Fees to the Exchange for the year 2014-15 as well as 2015-16 in terms of listing agreement entered with the said Stock Exchange. l. Utilization of the Proceeds from IPO: The Object for which the funds were raised by the Company by way of IPO is as follow; i. Brand Building ii. Meeting Additional Working Capital Requirements iii. Meeting Public Issue Expenses The other Objects of the Issue also include creating a public trading market for the Equity Shares of our Company by listing them on BSE. We believe that the listing of our Equity Shares will enhance our visibility and brand name and enable us to avail of future growth opportunities. The estimated cost of Brand Building was Rs. 208.28 lacs, out of which the Company has utilized Rs. 49 lacs towards the Brand Building. Further the requirement of working capital was estimated at Rs. 240.00 lacs and out of which the Company has utilized Rs. 80.00 lacs towards advances for materials and Rs. 44.57 for the purchase of shares. Further the Company has instead of keeping the funds ideal, has employed the balance funds for timing being in Loan and Fixed Deposits for negating the diminution in the value of money. m. Information in terms of Section II of Part II of the Schedule V of the Companies Act, 2013: (i) Elements of remuneration Package of all the Director: The details with regards to the remuneration Package of Director(s) is provided in "Point No. VI" of the Extract of Annual Return in the prescribed format prepared in accordance with Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 and appended as Annexure VI to this report. (ii) Details of Fixed Component and Performance linked incentives along with the performance criteria: The Company currently pays remuneration to only the Executive Director. The Company does not pay any remuneration by whatever name so called to its NonExecutive Director. Currently the entire remuneration being paid to the Executive Director contains only Fixed Component. (iii) Service Contract, Notice Period and Severance Fees: The Company has not entered in to any Service Contract with the Mr. Baskaran Sathya Prakash, Managing Director of the Company. Thus there is no Fixed Notice Period or Severance Fees. (iv) Stock Options, if any: The Company currently do not have any stock option scheme for its Employees or Directors. 4. Auditors: a. Statutory Auditor: At the Annual General Meeting held on 05th August, 2014, M/s. N. Kanodia & Co., Chartered Accountants (Firm Registration No. 327668E), were appointed as statutory auditors of the Company from the conclusion of the 30th Annual General Meeting of the Company held on 05th August, 2014 till the conclusion of the 34th Annual General Meeting to be held in the year 2018. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. N. Kanodia & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regards, the Company has received a certificate from the Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. b. Secretarial Auditors: Vishal Garg & Associations, Company Secretaries, were appointed to conduct the Secretarial Audit of the Company for the FY 2014-2015, as required under the Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the FY 20142015 is appended as Annexure VII to this report c. Comments of the Board on the qualification/reservation/adverse remarks/disclosure made: (i) by the Statutory Auditors in the Audit Report: The Auditors' report do not contain any qualifications, reservations or adverse remarks (ii) by the Secretarial Auditors in the Secretarial Audit Report: The Auditors' report does not contain any qualifications, reservations or adverse remarks. d. Internal Financial Control The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. e. Risk Management: The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Company has identified various risks and also has mitigation plans for each risk identified. The Risk Management Policy of the Company is available on our website www.carewellindustriesltd.com f. Vigil Mechanism: The Company has established a mechanism for Director's and employee's to report their concerns relating to fraud, malpractice or any other activity or event which is against the interest of the Company. The same has been disclosed in the corporate governance report under the heading Whistle Blower Policy, which forms part of the directors' report. The Whistle Blower Policy is available on our website www.carewellindustriesltd.com g. Statement on Material Subsidiary: The Company throughout the FY 2014-2015 had only one Subsidiary Company i.e., M/s. CKM Homecare Solutions Private Limited. Our Subsidiary Company, CKM Homecare Solutions Private Limited, purchased the trade mark "ROOSTER" from Sun-Up Botanics Private Limited, Mumbai vide Deed of Assignment dated July 21, 2011. An application was made to the Registrar of Trademarks for entering the name of CKM Homecare Solutions Private Limited in the Register of Trade Marks as proprietor of the trademark "ROOSTER". Currently, CKM Homecare Solutions Private Limited is the proprietor of the trade mark "ROOSTER" bearing no. 365452 in respect of "Insect Repellent Preparations" included in Class 5. The registration is valid up to August 28, 2018. During the FY 2014-2015, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company with that of its subsidiary, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure VIII to the Board's report. The statement also provides the details of performance, financial position of the subsidiary. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of our subsidiary, are available on our website www.carewellindustriesltd.com These documents will also be available for inspection during business hours at our registered office in Chennai, India. The Policy on Identification of Material Subsidiaries is available on our website www.carewellindustriesltd.com 5. Corporate Social Responsibility: The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of Section 135 of the Companies Act, 2013 is not applicable to the company. a. Particulars on conservation of energy, research and development, technology absorption and foreign exchange earnings and outgo: (i) Energy Conservation: Conservation of energy continues to receive increased emphasis and steps are being taken to reduce the consumption of energy at all levels. The Company has taken steps to conserve energy in its office use, consequent to which energy consumption had been minimized. No additional Proposals/ Investments were made to conserve energy. Since the Company has not carried on industrial activities, disclosure regarding impact of measures on cost of production of goods, total energy consumption, etc, are not applicable. (ii) Foreign Exchange Earnings and Outgo: The Company has not earned or spent any foreign exchange during the year under review. (iii) Research and Development & Technology Absorption: The Company has not adopted any technology for its business and hence no reporting is required to be furnished under this heading. The Company will adopt necessary technology as and when required in the furtherance of the business. 6. Others: a. Extract of Annual Return: In accordance with Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure VI to this Report. b. Significant and Material Orders: There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. c. Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act 2013: The Company has in place an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act 2013. All the employees (permanent, Contractual, temporary, Trainees) are covered under this policy. During the year under review, no complaints were received falling under the category of Sexual Harassment of Women. d. Other Disclosures: Your Directors state that no disclosure or reporting is required in respect to the following items as there were no transactions on these items during the year under review: (i) Issue of equity shares with differential rights as to dividend, voting, or otherwise. (ii) Issue of shares (including sweat equity shares) to employees of the company under any scheme. (iii) Redemption of Preference Shares and/or Debentures. 7. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels but for whose hard work, and support, your company's achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the company. By Order of the Board of Directors For CAREWELL INDUSTRIES LIMITED BASKARAN SATHYA (DIN: 01786634) Managing Director PRAKASH R. RATHINAMALA (DIN: 02711992) Director Date: 31.07. 2015 Place: Chennai |