BOARD'S REPORT To, The Members, Your Directors have pleasure in present, twenty third Annual Report on the business and operations of the Company together with the audited accounts for the Financial Year ended March 31, 2015. Dividend Your Directors have approved an interim dividend of 50% i.e. Rs. 5 per equity share for the financial year 2014-15. Reserves During the financial year 2014-15, your Directors have proposed to transfer an amount of Rs 1,250.00 Lacs in the general reserve. Operations During the year under review the Company has closed the year with total standalone revenue of Rs. 78,870.14 Lacs. On Consolidated basis the total revenue is Rs. 102,883.06 Lacs. The Company has made total Profit Before Tax on Standalone basis of Rs. 10,167.25 Lacs and on Consolidated basis of Rs. 10,885.21. During the financial year under review most of the divisions has done quite well. Drum Closure division has seen strong revenue growth and the total revenue in the Drum Closure division has been Rs. 26,933.25 Lacs and Profit Before Interest and Tax has been Rs. 7136.94 Lacs. Scaffolding division has also seen a very good growth and revenue of Rs. 31874.78 Lacs and posted Profit Before Interest and Tax of Rs. 3306.55 Lacs. Garment division unfortunately has not done very well this year and that is why the total Profit Before Tax of the Company is reduced as compared to last year. Last year for March'2014 total Profit Before Tax was Rs. 12,071.37 Lacs and this year has been Rs. 10,167.25 Lacs that is because the Garment division this year has posted a loss of Rs. 509.30 Lacs versus a profit of Rs. 2,031.15 Lacs last year. Power division has also seen a very good growth in the revenue of i.e. Rs. 3,636.40 Lacs and posted Profit Before Interest and Tax of Rs. 513.36 Lacs as compare to loss of Rs. 436.66 lacs. Subsidiaries: As on March 31, 2015 there were 11 subsidiaries of the Company: Direct Indian subsidiaries: 1. Technosoft Engineering Projects Limited 2. Technocraft Tabla Formwork Systems Private Limited Limited Liability Partnership: 3. Shreyan Infra & Power LLP Direct foreign Subsidiaries: 4. Technocraft International Limited, UK (WOS of the Company) 5. Technocraft Spolka Zoo, Poland (WOS of the Company) 6. Technocraft Australia Pty. Australia) (WOS of the Company) 7. Anhui Reliable Steel Technology Co Ltd, China (WOS of the Company) First step down subsidiaries: 8. Technosoft Engineering, Inc, USA (WOS of Technosoft Engineering Projects Limited) 9. Swift Engineering Inc, Canada, (Subsidiary of Technosoft Engineering Projects Limited) 10. Highmark International Trading FZE, UAE(WOS of Technocraft International Limited, UK) Second step down subsidiaries 11. Swift Projects Inc, USA (WOS of Swift Engineering Inc. Canada) Highmark International Trading FZE, UAE has become subsidiary during the year, except this no other company has become/ ceased to be a subsidiary, Joint venture or associate during the financial year 2014-15. A report on the performance and financial position of the each of the subsidiaries as per the first proviso to sub-section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2014 in the prescribed format AOC-1 is annexed to the report and hence not repeated here for the sake of brevity, under Rule 8 of the Companies (Accounts) Rules, 2014. The Company has also formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.technocraftgroup.com <http://www.technocraftgroup.com> and can be accessed at <http://www.technocraftgroup.com/pdf/Policy-For->Determining-Material-Subsidiary-Companies.pdf Deposits During the year, your Company has not accepted any deposits under Section 73 of the Companies Act, 2013. Conservation of energy, technology absorption and foreign exchange earnings and outgo The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure-I forming part of this Report Statutory Auditors The Members of the Company had, at the 22nd Annual General Meeting ("AGM") held on September 30, 2014, approved appointment of M/s. M.L. Sharma & Co., Chartered Accountants, Mumbai, bearing ICAI Registration No.109963W, as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the third AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the above said AGM). Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor. In view of the above, the existing appointment of M/s. M. L. Sharma & Co., Chartered Accountants, Mumbai, covering the period from the conclusion of this ensuing AGM until the conclusion of the next AGM to be held in the FY 2016-17, is being placed for member's ratification. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made thereunder, as may be applicable. Auditors' Report The Auditors' Report to the Members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark. Secretarial Audit Secretarial Audit for the Financial Year 2014-15 was conducted by M/s Pramod Jain & Co., Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor's Report is attached to this Report as Annexure -II. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report. Cost Audit In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on May 27, 2015 has appointed M/s NKJ & Associates, Cost Accountant as Cost Auditors of the Company for the Financial Year 2015-16. In terms of the provisions of Section 148 (3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for Financial Year 2015-16. Particulars of Loans, Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Also, pursuant to Clause 32 of the Listing Agreement, the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements. Consolidated Financial Statements In accordance with the Section 129(3) Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited Consolidated Financial Statements are provided in this Annual Report. Corporate Governance The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI). The report on Corporate Governance as per the requirement of the Listing Agreement forms an integral part of this Annual Report. The requisite certificate from the M/s. Pramod Jain & Company Secretaries, confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance. Significant and material Orders passed by the Regulators/Courts, if any There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations. Internal Control systems and their Adequacy The Company has Internal Control Systems, Commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time. The Company has in place adequate internal financial controls with reference to financial statements. Such controls were tested during the financial year and no material weaknesses in the design or operation were observed. Extract of the Annual Return The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure-III and forms the part of this Report Share Capital The Paid-up Equity Capital of the Company as on March 31, 2015 stood at Rs. 3,152.68 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company holds instruments convertible into equity shares of the Company. Directors Mr. Madhoprasad Saraf, Chairman of the Company was passed away in December 2014. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Chairman of the Company. Mr. Sharad Kumar Saraf and Mr. Sudarshan Kumar Saraf, Managing Directors of the Company were appointed Chairman and Co-Chairman of the Company, respectively. Mr. Ganesh Kumar Gupta, who was appointed as an independent director, demitted office as Director effective October 7,2014. As per the provisions of Section 152 of the Companies Act, 2013, Mr. Sharad Kumar Saraf, Chairman & Managing Director and Mr. Sudarshan Kumar Saraf, Co-Chairman & Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. On the recommendation of the Nomination and Remuneration Committee and after reviewing the declaration submitted by Mr. Vishwambhar C. Saraf and Mr. Vinod Balmukand Agarwala, Independent Directors, the Board of Directors of the Company at its Meeting held on February 6, 2015 formed an opinion that the said Directors meets with the criteria of Independence as per Section 149(6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meets with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges and accordingly appointed Mr. Vishwambhar C. Saraf and Mr. Vinod Balmukand Agarwala, as an Additional Directors to hold office as an Independent Director of the Company, upto the conclusion of the 27th Annual General Meeting of the Company to be held in the calendar year 2019. The Board of Directors at its Meeting held on February 6, 2015, on the recommendation of the Nomination and Remuneration Committee, appointed Mr. Navneet Kumar Saraf and Mr. Ashish Kumar Saraf as Additional Directors and also as Whole-time Director of the Company for a period of five years w.e.f. February 6, 2015, subject to the approval of the Members of the Company. The Board of Directors at its Meeting held on August 10, 2015, on the recommendation of the Nomination and Remuneration Committee, re-appointed Mr. Atanu Anil Choudhary as Whole-time Director of the Company for a period of five years w.e.f. August 10, 2015, subject to the approval of the Members of the Company. Your Company has received the requisite disclosures / declarations from Mr. Vishwambhar C. Saraf, Mr. Vinod Balmukand Agarwala Mr. Navneet Kumar Saraf, Mr. Ashish Kumar Sarafand Mr. Atanu Anil Choudharyas required under the relevant provisions of the Companies Act, 2013. Your Company has also received Notices under Section 160 (1) of the Companies Act, 2013 from a member signifying his intention to propose Mr. Vishwambhar C. Saraf, Mr. Vinod Balmukand Agarwala Mr. Navneet Kumar Saraf and Mr. Ashish Kumar Saraf as candidature for the office of Independent Director / Director at the ensuing Annual General Meeting. Further, your Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. Profile of the Directors seeking appointments, have been given in the Notice of the ensuing Annual General Meeting of the Company. Key Managerial Personnel As on March 31, 2014 Mr. Sharad Kumar Saraf, Mr. Sudarshan Kumar Saraf, were the Managing Directors, Mr. Atanu Choudhary was Whole-time Director, Mr. Ashish Kumar Saraf was Chief Financial Officer and Mr. Manoj Jain was the Company Secretary of the Company. Pursuant to Section 203 of the Companies Act, 2013 (enforced w.e.f. April 1, 2014) read with section 2(51) of the Companies Act, 2013 all of them were categorized as Key Managerial Personnel, in the Board Meeting held on May 21, 2014. Further, in the Board Meeting held on February 6, 2015, Mr. Navneet Kumar Saraf and Mr. Ashish Kumar Saraf were appointed as Whole-time Directors and Mr. Anil Gadodia, was appointed Chief Financial Officer in place of Mr. Ashish Kumar Saraf. Further, Mr. Manoj Jain had resigned w.e.f. March 7, 2015 and Mr. Neeraj Rai was appointed Company Secretary w.e.f. March 16, 2015 as Key Managerial Personnel under the Section 203 of the Companies Act, 2013. Furthermore, Mr. Anil Gadodia had resigned w.e.f. May 27, 2015 and in the Board Meeting held on May 27, 2015, Mr. Ashish Kumar Saraf was appointed as Whole-time Director and Chief Financial Officer of the Company. The Remuneration and other details of Key Managerial Personnel for the financial year ended March 31, 2015 are mentioned in the Extract of the Annual Return which is attached to the Board's Report. Meetings of the Board of Directors The Board of Directors of your Company met 4 (four) times during 2014-15. The Meetings were held on May 21, 2014, August 6, 2014, November 13, 2014 and February 6, 2015. The time gap between any two consecutive meetings did not exceed one hundred and twenty days. Audit Committee As at March 31, 2015, the Audit Committee comprised of five Independent Directors namely Mr. S. B. Agarwal, Mr. Jagdeesh Mal Mehta, Ms. Vaishali Choudhari, Mr. Vishwambhar C. Saraf and Mr. Vinod Agarwala. All the recommendations made by the Audit Committee were accepted by the Board. Whistle Blower Policy/ Vigil Mechanism In Compliance with the provisions of Section 177 of the Companies Act 2013 and Clause 49 of the Listing Agreement the Company has a Whistle Blower Policy (the "WB Policy") with a view to provide vigil mechanism to Directors, employees and other stakeholders to disclose instances of wrong doing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conductor ethics policy. The WB Policy also states that this mechanism should also provide for adequate safeguards against victimization of Director(s)/ Employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committeein exceptional cases. The Whistle Blower Policy has been posted on the website of the Company at the link <http://www.technocraftgroup.com/pdf/Whistle->Blower-Policy.pdf and the details of the same are explained in the Report on Corporate Governance forming part of this Annual Report. Nomination and Remuneration Committee As at March 31, 2015, the Nomination and Remuneration Committee comprised of three Independent Directors namely Mr. S. B. Agarwal, Ms. Vaishali Choudhari and Mr. Vishwambhar C. Saraf. Nomination and Remuneration Policy The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and the Remuneration Policy of the Company is attached to the Board's Report as Annexure-IV Corporate Social Responsibility (CSR) Pursuant to Section 135 of the Companies Act, 2013 a Corporate Social Responsibility (CSR) Committee was constituted. As at March 31, 2015, the CSR Committee comprised of two Executive Directors and one Independent Director namely Mr. Sharad Kumar Saraf, Mr. Sudarshan Kumar Saraf and Ms. Vaishali Choudhari. Corporate Social Responsibility Policy recommended by CSR Committee of the Directors has been approved by the Board of Directors of the Company. The same is available on the website of the Company i.e. www.technocraftgroup.com <http://www.technocraftgroup.com> and also attached to this Report as Annexure-V. The disclosure relating to the amount spent on Corporate Social Responsibility activities of the Company for the financial year ended March 31, 2015 is attached to this Report as Annexure-VI. Transfer to Investor Education and Protection Fund (IEPF) During the year under review, the Company has transferred a sum of Rs. 1,01,754 to Investor Education and Protection Fund (IEPF) pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. The said amount represents dividend for the year 2006-07 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment. Particulars of contracts or arrangements with related parties All related party transactions attracting Compliance under Section 188 and / or Clause 49 of the Listing Agreement are placed before the Audit Committee as also before the Board for approval. Prior omnibus approval of the Audit Committee is also sought for transactions which are of a foreseen and repetitive nature. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on website of the Company at the link: <http://www.technocraftgroup.com/pdf/Policy-On-Related-Party->Transactions.pdf Your Directors draw attention of the members to Notes to the financial statement which sets out related party disclosures. Particulars of Employees and other additional information Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as Annexure-VII. 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 form part of this Report and is annexed as Annexure-VIII. Risk management policy The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluateand mitigate risks in order to minimize its impact on the business. In accordance with the provisions of Clause 49 of the Listing Agreement, your Company has also constituted a Risk Management Committee. Performance Evaluation Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual Performance Evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration has been carried out. The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. Criteria for evaluation of independent directors: The Directors shall be evaluated on the basis of the following criteria i.e. whether they: i) uphold ethical standards of integrity and probity; ii) act objectively and constructively while exercising their duties; iii) exercise their responsibilities in a bona fide manner in the interest of the Company; iv) devote sufficient time and attention to their professional obligations for informed and balanced decision making; v) assist the Company in implementing the best corporate governance practices; vi) strive to attend all Meetings of the Board of Directors and of the Board committees of which they are members; vii) moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between Management and Shareholder's interest; viii) satisfy themselves on the integrity of financial information and that financial controls and the systems of risk Management are robust and defensible; ix) strive to safeguard the interests of all stakeholders, particularly the minority shareholders; x) balance the conflicting interest of the stakeholders; xi) seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts; xii) keep themselves well informed about the Company and the external environment in which it operates; xiii) participate constructively and actively in the committees of the Board in which they are chair persons or members; xiv) strive to attend the general Meetings of the Company; xv) acting within their authority, assist in protecting the legitimate interests of the Company, shareholders and its employees; xvi) pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the Company; xvii) ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use; xviii) report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy, if any; xix) maintain confidentiality of information such as commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law; xx) abide by Company's Memorandum and Articles of Association, Company's policies and procedures including code of conduct, insider trading guidelines etc; xxi) they express concerns about the running of the Company or a proposed action and ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that the concerns are recorded in the Minutes of the Board Meeting; xxii) develop a good working relationship with other Board members and contribute to the Board's working relationship with the senior Management of the Company; xxiii) fairly contribute towards proper functioning of Board or Committees of the Board. The Independent Directors shall also be evaluated on the basis of the following criteria i.e. whether they: i) satisfy the criteria for independence as prescribed under Section 149 of the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges; ii) help in bringing an independent judgment to bear on the Board's deliberations especially on issues of strategy, performance, risk Management, resources, key appointments and standards of conduct; iii) bring an objective view in the evaluation of the performance of Board and Management; iv) actively scrutinise the performance of Management in Meeting agreed goals and objectives and monitor the reporting of performance; v) undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company; vi) contribute to determine appointment and remuneration of executive Directors, Key Managerial Personnel (KMP) and senior Management; vii) exercise objective independent judgment in the paramount interest of the Company as a whole, while concurring in or dissenting from the collective judgment of the Board in its decision making. The Non-Independent Directors along with the Independent Directors, except the one who is being evaluated, will evaluate/ assess each of the Independent Directors on the aforesaid parameters. On the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the Independent Director. Independent Directors Meeting During the year under review, the Independent Directors of the Company met on February 6, 2015, inter-alia, to discuss: i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole. ii) Evaluation of performance of the Chairman of the Company, taking into view of Executive and Non-Executive Directors. iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties. Directors' Responsibility Statement In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors, based on the representation/ confirmation received from the Chief financial Officer, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any. b) the selected accounting policies were applied consistently and the Directors 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 March 31, 2015 and of the profit of the Company for the year ended on that date. c) proper and sufficient care has been taken for 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. d) the annual accounts have been prepared on a going concern basis. e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are operating effectively f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating effectively. Sexual Harassment cases During the year under review, there were no cases filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Familiarisation Programmes for Board Members All the Directors of the Company are updated as and when required, of their role, rights, responsibilities under applicable provisions of the Companies Act and the Listing agreement entered into by the Company with Stock Exchanges; nature of industry in which the Company operates, business model of the Company, etc. The Company holds Board and the Committee Meetings from time to time. The Board of Directors has complete access to the information within the Company. The minutes of meetings of various committees are periodically circulated to the Board. The Independent Directors have the freedom to interact with the Company's management. Directors are also informed of the various developments in the Company through various modes of communications. All efforts are made to ensure that the Directors are fully aware of the current state of affairs of the Company and the industry in which it operates. The details of such familiarization programmes for Independent Directors of the Company are posted on the website of the Company <http://www.technocraftgroup.com/pdf/Familiarisation-Programme-for-Independent-Directors.pdf> Acknowledgements Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders, clients, Financial Institutions, Bank, Central and State Governments, the Company's valued investors and all other business partners for their continued co-operation and excellent support received during the year. Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress. By Order of the Board For Technocraft Industries (India) Limited Sharad Kumar Saraf Chairman & Managing Director Place: Mumbai Date: August 10, 2015 Registered Office: A-25, Technocraft House, MIDC, Marol Industrial Area, Road No. 3, Opp.ESIS Hospital, Andheri (E), Mumbai. CIN NO. L28120MH1992PLC069252 www.technocraftgroup.com |