DIRECTORS' REPORT DEAR MEMBERS, Your Directors have pleasure in presenting before you their 32nd tAnnual Report together with the Audited Accounts of the Company for the year ended 31st March, 2015 . STATE OF COMPANY'S AFFAIRS/ BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/HIGHLIGHTS/OPERATIONS Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this report. DIVIDEND:- As the company has recently gained some profits because of the Merger your Directors have decided to invest the earnings in the growth of business and for this reason, have decided to not to declare any Dividend for the year under review. RESERVES:- Your Directors propose to transfer the amount of Net Profit After Tax to General Reserve for the financial year ended March 31, 2015 as no dividend is declared during the year keeping in view the requirement to plough back the funds for internal growth of the company. SHARE CAPITAL:- No share capital was issued during the year. The company has not issued any equity shares with differential rights, bonus shares, Sweat Equity Shares, Employee stock options or shares under right issue. DIRECTORS:- In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. R K Batra (DIN 00161631) ,Director of the Company retire by rotation in the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Ms. Maniza Khan (DIN: 07146123) had been appointed as an additional Directors, designated as Independent Directors of the Company by the Board of Directors. They hold office upto the date of the ensuing Annual General Meeting and are proposed to be appointed as an Independent Director by the Members. The Company has received requisite notices in writing from members proposing them for appointment as Independent Directors. In the opinion of the Board, Ms. Maniza Khan (DIN: 07146123) fulfill the conditions for their appointment as Independent Directors as specified in the Act and the Listing Agreement. Ms. Maniza Khan (DIN: 07146123) is independent of the management. The Brief Resumes and other details relating to the Directors who are proposed to appointed/re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement, form part of the Notice of Annual General Meeting. KEY MANAGERIAL PERSONNEL The Key Managerial Personnel (KMP) in the Company as perSection 2(51) and 203 of the Companies Act, 2013 are as follows: Sh. Ranjan kapoor Who le Time director MATERIAL CHANGES AND COMMITMENTS There are no material changes or commitments, effecting the Financial position of the Company happening between the end of the Financial Year of the Company and date of this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO The requisite information has been given by way of an Annexure D-1 to this Report. CHANGES HAPPENING DURING THE FINANCIAL YEAR Your Directors wish to inform that there have not been any changes during the Financial Year under review: a.In the nature of Company's business b.Generally in the class of business in which the Company has an interest Further, the Company has no Subsidiary and therefore information regarding any change in subsidiaries or in the nature of business carried on by them is not applicable to the Company. BUSINESS RESPONSIBILITY REPORT Clause 55 of the Listing Agreement is not applicable to the Company. POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria fordetermining qualifications, positive attributes, independenceof a Director and the policy on remuneration of Directors,KMP and other employees is attached as Annexure D-2, which forms part of this report. PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES:- In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees falling in the bracket as defined in Rule 5 (2) Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure D-4 which forms part of this report. NUMBER OF MEETINGS OF BOARD During the year 2014-15, 5 (Five) Board Meetings were held and 1 (One) Independent Directors meeting was held on 11.02.2015 as required under Schedule IV of Companies Act, 2013 and as per Clause 49 of the Listing Agreement. The dates on which the Board Meetings were held are 30-05-2014, 13-08-2014, 02-09-2014, 14-112014 and 17-03-2015. STATUTORY AUDITORS & AUDITORS REPORT:- M/s B Aggarwal & Company, Chartered Accountants, New Delhi, was appointed as Statutory Auditors of the Company in the last Annual General Meeting. As their term expires at the ensuring Annual General Meeting, they have offered themselves for re- appointment as they are eligible for re-appointment. They are proposed to be reappointed from the conclusion of this Annual General Meeting till the conclusion of the Annual General Meeting of the Company for the Financial year 2018-2019. The Company has obtained a Certificate from the Auditors under Rule 4 (1) of The Companies (Audit and Auditors) Rules, 2014. They have also issued a Certificate to the effect that they satisfy the criteria provided in Section 141 of the Companies Act, 2013.The Auditors have vide their letter dated August 31st, 2015 also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India(ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI. The Auditors' Report being self-explanatory require no comments from the Directors. Further, there are no reservations, qualifications or adverse remarks in the Audit Report given by them in respect of the Financial Year 2014-15. SECRETARIAL AUDITORS AND THEIR REPORT Mr. Kapil Chaand (ACS 36673), a Company Secretary in practice having CP no. 13654, was appointed as Secretarial Auditor of the Company forthe financial year 2014-15 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by him in the prescribed form MR- 3 is attached as Annexure D-5 and forms part of this report. There are no qualifications or observations or other remarks ofthe Secretarial Auditors in the Report issued by them for the financial year 2014-15 which call for any explanation from theBoard of Directors. FRAUDS REPORTED BY AUDITORS There are no frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government. COST AUDIT As per the Cost Audit Orders, Cost Audit is not applicable to the Company. CONSOLIDATED FINANCIAL STATEMENTS In terms of Rule 6 of Companies (Accounts) Rules, 2014, nothing contained in the said rule shall, subject to any other law or regulation, apply for the financial year commencing from the 1st day of April, 2014 and ending on the 31* March, 2015, in case of a company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both, for the consolidation of financial statement in respect of associate companies or joint ventures or both, as the case may be. As the Company does not have any Subsidiary, the accounts have not been consolidated for the FY 2014-15. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY According to Section 134(5)(e) of the Companies Act, 2013 theterm Internal Financial Control (IFC) means the policies andprocedures adopted by the company for ensuring the orderlyand efficient conduct of its business, including adherenceto company's policies, the safeguarding of its assets, theprevention and detection of frauds and errors, the accuracyand completeness of the accounting records, and the timelypreparation of reliable financial information. The Company has a well placed, proper and adequate internal financial control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal Audit function is well defined in the Organization. The internal financial control system ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company's policies and Standard Operating Procedures (SOPs) and audit and compliance byin-house Internal Audit Division, supplemented by Concurrent and Statutory Audit. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms .Independence of the audit and compliance is ensured by regular supervision of the Audit Committee over Internal Audit. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically. During the year, as per the requirements of Listing Agreement with the Stock Exchanges, a Risk Management Committee was constituted by the Board of Directors with responsibility of preparation of Risk Management Policy, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to update the Risk management on quarterly basis, to report key changes in critical risks to the Board on an ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. The Committee holds quarterly meetings to review the critical risks identified. The risks faced by the Company and their minimization procedures are assessed categorically under the broad heads of High, Medium and Low risks. Further, the Company identifies risks, and control systems are instituted to ensure that the risks in each business process are mitigated. The Board provides oversight and reviews the Risk Management Policy on a regular basis .In the opinion of the Board there has been no identification of elements of risk that may threaten the existence of the Company. SUBSIDIARIES/ASSOCIATES/JOINT VENTURES The Company has no subsidiaries or Associates as defined in the Companies Act, 2013. DEPOSITS The Company has neither accepted nor renewed any deposits during the Financial Year 2014-15 in terms of Chapter V of the Companies Act, 2013. Information in this regard, therefore, is nil. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Company's operations in future CODE OF CONDUCT The Company continues to place emphasis on inclusive growth and has adopted a voluntary code of conduct for affirmative action. AUDIT COMMITTEE Your Directors wish to inform that in Compliance with Section 177 of the Companies Act, 2013 and Clause 49 of listing agreement with the stock exchange, an audit committee has been duly constituted. The Audit Committee as on March 31, 2015 comprises of the following Independent Directors: Details of the Audit Committee have been separately given in the corporate governance report. Further, all recommendations of Audit Committee were accepted by the Board of Directors. NOMINATION & REMUNERATION COMMITTEE, STAKEHOLDERS RELATIONSHIP COMMITTEE, In terms of Clause 49 of the Listing Agreement and pursuant to the provisions of Companies Act, 2013, the details pertaining to Nomination & Remuneration Committee. The Nomination & Remuneration Committee as on March 31, 2015 comprises of the following Directors: The details of Remuneration Policy and the Committee are furnished in the Report on Corporate Governance, which is annexed herewith. CORPORATE SOCIAL RESPONSIBILITY (CSR )COMMITTEE In terms of Section 135 of the Companies Act, 2013, the Company doesn't fall under the requirements of CSR. So there was no CSR Committee. CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES a) In the above financials, the effect of the scheme of arrangement for internal reorganisation of the Company and amalgamation of M/s. KVR Rail Infra Projects Pvt. Ltd. with the company, has been considered, as the scheme of arrangement has been approved by the Hon'ble High Court of Hyderabad (for the state of Telangana and Andhra Pradesh), vide order dated 30th October, 2014. The said order has been filed with the office of the Registrar of Companies, Andhra Pradesh and Telangana on 10th January, 2015, being the effective date for the scheme of arrangement which shall be operative from the Appointed Date i.e. 1st April 2012. In accordance with the said scheme of arrangement, the Share Capital of the Company has been reduced by 75% and all the assets and liabilities of M/s. KVR Rail Infra Projects Pvt. Ltd., the transferor company has been taken over at its existing book value., EXTRACTOFANNUALRETURN The extract of Annual Return as on March 31, 2015 in the prescribed Form No. MGT-9, pursuant to Section 92(3) ofthe Companies Act, 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules, 2014 is attachedherewith as Annexure D-8 and forms part of this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2014-15 are attached as Annexure D-9 which forms part of this report. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013 With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm's length basis. Hence, provisions of Section 18 (1) are not applicable. However, as these transactions were in the ordinary course of business and on an arm's length basis, in the opinion of the Board these transactions are justified to be executed. During the year, the Company had not entered into any contract or arrangement with related parties which could beconsidered 'material' according to the policy of the Company on Materiality of Related Party Transactions .Your attention is drawn to the Related Party disclosures set outin Note no. 32 of the Financial Statements. VIGIL MECHANISM The Company has established a Vigil Mechanism in terms of Section 177 (10) of the Companies Act, 2013 and also in terms of Clause 49 of the Listing Agreement. The details of the Vigil Mechanism is given in the Corporate Governance Section, which is annexed herewith. The Vigil Mechanism cum Whistle Blower Policy is also available on the Company's website www.paulmerchants.net DIRECTORS' RESPONSIBILITY STATEMENT:- (a)in the preparation of the annual accounts, 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 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; (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. INDUSTRIAL RELATIONSHIPS:- Relations between the Management and the employees at all levels have been cordial and the Directors wish to express their appreciation for the cooperation and dedication of the employees of the Company. COMPLIANCE The company has devised proper systems to ensure compliance of all laws applicable to the company and the compliance reports issued by the Departmental Heads are placed before the Board every Quarter confirming compliance by the Company with all applicable Laws. LISTING AND LISTING AGREEMENT :- The equity shares of the company are listed at BSE with the sole intent of providing liquidity to the existing Shareholders The company has already paid listing fees for the year 2015-2016 to the Bombay Stock Exchange. DEMATERIALIZATION OF SHARES As mentioned in Company's earlier Annual Reports, the Company's equity shares are in compulsory Demat mode in terms of SEBI Guidelines. This has been facilitated through arrangement with NSDL and CdSl. M/s Beetal Computer & Financial Services Private Limited is acting as the Registrar and Share Transfer Agents for this purpose and acts as common share agency in terms of SEBI Guidelines. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 3009- 2014) with the Ministry of Corporate Affairs. FINANCIAL STATEMENTS Full version of the Annual Report 2014-15 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to theCompanies Act, 2013, Directors' Report (including Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report) are being sent via email to all shareholders who have provided their email address(es). To others, the Full version of the Annual Report is being sent by post. Full version of Annual Report 2014-15 is also available forinspection at the registered office of the Company during working hours upto the date of ensuing Annual General Meeting (AGM). It is also available at the Company's websitewww.axisrailindia.com. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2014-15, upon receipt of written request from you, as a member of the Company. 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 requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15: No. of Complaints received : Nil No. of Complaints disposed off: Nil ACKNOWLEDGEMENT:- The Directors sincerely acknowledge the trust and confidence that has been placed by the employees, shareholders and investors in the Company. The Directors are thabkful to all the employees and the officers of the Company, for their dedication, support and co-operation. For & On Behalf of the Board For & On Behalf of the Board (RANJAN KAPOOR) WHOLE TIME DIRECTOR DIRECTOR (DIN 00479483) PLACE: SECUNDERABAD Date: September 03 , 2015 |