BOARD'S REPORT & MANAGEMENT DISCUSSION AND ANALYSIS To The Members Ranjit Securities Ltd. The Directors take pleasure in brsenting their 21st Annual Report together with the audited financial statements for the year ended March, 31 2015 and the Management Discussion and Analysis has also been incorporated into this Report. HIGHLIGHTS OF PERFORMANCE • Total income for the year decrease by 37.39% to Rs. 25.87 Lakhs as compared to Rs. 41.32 Lakhs in the brvious year; • Income from operations for the year was Rs 25.87 Lakhs as compared to Rs.41.32 Lakhs in the brvious year, with decline of 37.39%; • Loss before tax for the year was Rs.25.01 Lakhs as compared to Rs. 12.28 Lakhs in the brvious year, with increase of 103.66%; • Loss after tax for the year was Rs.25.42 Lakhs as compared to Rs. 14.93 Lakhs brvious year, with increase of 70.26%. DIVIDEND Due to losses suffered by the Company, during the year under review, your directors do not recommend any dividend for the year ended 31st March 2015. (Previous year Nil) SHARE CAPITAL AND RESERVES st The paid up Equity Share Capital as on 31st March, 2015 was Rs. 268.74 Lakhs divided into 26.874 Lakhs equity shares of Rs. 10/- each. During the year under review and the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company hold any security or convertible instruments of the Company. TRANSFER TO RESERVES During the year under review your company has not transferred any amount to the general reserves. (Previous year Nil) FINANCE st Cash and cash equivalent as at 31st March, 2015 was Rs 44.23 Lacs. Your Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. The details relating to deposits, covered under Chapter V of the Act,- (a) Accepted during the year : Nil (b) Remained unpaid or unclaimed as at the end of the year : Nil (c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: Nil Details of deposits which are not in compliance with the requirements of Chapter V of the Act: The Company has not accepted any deposits which are not in compliance of the Companies (Acceptance of Deposits) Rules, 2014 during the financial year. Particulars of loans, guarantees or investments The Company has not provided any guarantees or security. For the particulars of loans given and investments made by the company pursuant to the section 186 of the Companies Act, 2013, kindly refer the relevant notes which forming part of the notes to the financial statements provided in the annual report. ECONOMIC SCENARIO AND OUTLOOK The global economy in FY 2014-15 witnessed divergent trends among major economies, despite unbrdictable headwinds; the global economic recovery is gaining momentum. These winds of positive change have masked the growth divergence among major economies. Specifically, the recovery in US was stronger than expected, while performance in Japan and Euro zone has fallen short of expectations. This has resulted in the dollar apbrciating vis-a-vis other G7 currencies. The currencies of commodity exporting countries weakened due to fiscal and trade imbalances. India's economy is poised to return to its high-growth path, thanks to lower fiscal and current account deficits, falling inflation, benign commodity prices, and structural reforms to boost investments. Monetary policy is also likely to be supportive with the Reserve Bank of India (RBI) having moved to flexible inflation targeting. The manufacturing sector is likely to benefit from lower interest rates. The share of investments in Gross Domestic Product (GDP) is at 29% (compared to 33% in 2007) and is expected to pick up. However, productivity and capital efficiency improvement are likely to drive near-term growth. Further that currently the world is tracking the status of Greece and China financial problem, which may have little bit impact on the countries financial performance. INDUSTRY OUTLOOK AND OPPORTUNITIES The Company is mainly having investment activities in the selected unlisted closely held companies as well as Micro Finance. The Security market in the financial year was having good growth and encouraging beyond the expectation. However, the Company does not foresee any substantial changes in its business and profitability in the coming year. MARKET DEVELOPMENT The Company has made investment in the selected companies for which no stock market is available for liquidity; however it is almost risk free from the changes in the capital market. The Company is making efforts to realize the investment and loans for better deployment for growth of the company. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES In view of the paid up capital, profits and turnover of your company during the brvious three years, it does not fall under the provisions of the section 135 of the Companies Act, 2013 and the rules made their under. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY The current economic environment carries with it an evolving set of risks. The Company recognizes that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders, to achieve its business objectives and enable sustainable growth. Risk and opportunity management is therefore a key element of the overall strategy. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Company emphasizes on those risks that threaten the achievement of business objectives of the Group over the short to medium term. An overview of these risks is provided hereafter, including the actions taken to mitigate these risks and any related opportunities: i) Strategic and Commercial risks: being taken care by the Risk Management Committee and reporting to the Board on need basis. ii) Regulatory compliance risks: The regulatory environment has resulted into increased regulatory scrutiny that has raised the minimum standards to be maintained by the Company. This signifies the alignment of corporate performance objectives, while ensuring compliance with regulatory requirements. The Company recognizes that regulatory requirements can at times be challenging, and therefore will, strive to understand the changing regulatory standards, so as to strengthen its decision making processes and integrate these in the business strategy of each of the industries in which it operates. Drive business performance through the convergence of risk, compliance processes and controls mechanisms to ensure continued operational efficiency and effectiveness. iii) Financial risks: It includes among others, exposure to movements in interest rates and the Company also maintains sufficient liquidity, so that it is able to meet its financial commitments on due dates and is not forced to obtain funds at higher interest rates. iv) Day-to-day Risk Management: Management and staff at the Company's facilities, assets and functions identify and manage risk, promoting safe, compliant and reliable operations. These requirements, along with business needs and the applicable legal and regulatory requirements, underpin the practical plans developed to help reduce risk and deliver strong, sustainable performance. VIGIL MECHANISM/WHISTLE BLOWER POLICY Your Company has a vigil mechanism named vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company and annexed to this Report as "Annexure 1". There were no complaints under the above said system during the financial year 2014-15. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES During the year under review your company is not having any subsidiary and Associate Company at any moment therefore the financial statements are brpared on standalone basis. BOARD OF DIRECTOR'S & KEY MANAGERIAL PERSONNELS Independent Directors At the brvious Annual General Meeting (AGM) of the company held on 30th Sept., 2014, the Members had re-appointed the existing independent directors namely; Shri Kailash Mandpe (DIN 02670345), Shri Yugansh Soni (DIN 06652396), Shri Amarjeet Singh Sudan (DIN 00209275) and Shri Pawan Kumar Mishra (DIN 02806679) under the Companies Act, 2013 for a period of 5 years with effect from 1st April 2014. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Your directors satisfy about their independency. Women Director The Company was having Smt. Ranjeet Kaur Hora (DIN 00200028) and Smt. Urmila Gambhir (DIN 01552361) as Director w.e.f. 12th June, 1997 and has been categorized as women Director and is complied with the provision of appointment of women director in the company. Key Managerial Personnel Company has appointed Mr. Parikshit Ranade as Chief Financial Officer w.e.f. 01st April, 2014 but to his br occupancy he has resigned from the post w.e.f. 27th June, 2014 and to fill the casual vacancy of the CFO company given responsibility of the CFO to the Whole-time Director Mr. Manmohan Gambhir w.e.f. 05th July, 2014. The Company was already having Mr. Taranjeet Singh Hora (DIN: 00200864) as a Managing Director; Mr. Manmohan Gambhir (DIN: 00199856) and Mrs. Urmila Gambhir (DIN: 01552361) as Whole-time Directors for 5 year w.e.f. 10th Dec, 2014 and necessary approval was accorded by the members at their 20th AGM held on 30.09.2014. CS Surbhi Jain Company Secretary was appointed w.e.f. 13th April, 2013 and has resigned w.e.f. 06.10.2014 due to her personal reasons. The Company has appointed Mohd. Akhtar Hussain as a Company secretary and KMP w.e.f. 10th April, 2015.
Directors seeking re-appointment In accordance with the provisions of the Companies Act, 2013 and in terms of the Articles of Association of the company, Smt. Ranjeet Kaur Hora (DIN: 00200028) and Shri Taranjeet Singh Hora (DIN 00200864) liable to retire by rotation and are eligible for re-appointment. Your directors recommend passing necessary resolutions as set out in the notice of the annual general meeting. Meetings of the Board The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other Board business. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. The notice of Board meeting is given well in advance to all the Directors. Meetings of the Board are held in Indore, at the Corporate Office of the Company. The Agenda of the Board meetings are circulated at least a week prior to the date of the meeting. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. The Board met 10 times during the financial year 2014-15 on 01st April, 2014; 30th May, 2014; 05th July, 2014; 12th August, 2014; 04th Oct, 2014; 14th October, 2014; 12th November, 2014; 06th December, 2014; 17th January, 2015 and 27th March, 2015. The maximum interval between any two meetings did not exceed 120 days. Board independence Our definition of ‘Independence’ of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013; a) Shri Kailash Mandpe (DIN 02670345) b) Shri Yugansh Soni (DIN 06652396) c) Shri Amarjeet Singh Sudan (DIN 00209275) d) Shri Pawan Kumar Mishra (DIN 02806679) The Company has obtained declaration from all the independent directors, confirming that they fulfill the criteria of independency as laid down under the section 149(6) and Clause 49 of the Listing Agreement. The Independent directors are not liable to retire by rotation. Company’s policy on Directors’ appointment and remuneration The Policy of Company on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under subsection (3) of section 178, is appended as “Annexure 2” to this Report and hosted on the Company’s website at www.ranjitsecurities.com. Annual evaluation by the Board The evaluation framework for assessing the performance of Directors comprises of the following key areas: i. Attendance of Board Meetings and Board Committee Meetings ii. Quality of contribution to Board deliberations iii. Strategic perspectives or inputs regarding future growth of Company and its performance iv. Providing perspectives and feedback going beyond information provided by the management v. Commitment to shareholder and other stakeholder interests The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. An executive member of the Board does not participate in the discussion of his evaluation. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013: a. that in the brparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Note 3 of the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of Company as at March, 31st 2015 and of the Loss of the Company for the year ended on that date; c. that proper and sufficient care has been taken 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 brventing and detecting fraud and other irregularities; d. that the annual financial statements have been brpared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. Details in respect of fraud reported by auditors u/s 143(12) other than those which are reportable to the central government There is no fraud which are not reportable by the Auditors to the Central Government, and which needs to be disclosed in the Board report during the year under review. Disclosure for frauds against the Company In terms of the provisions of section 134(3) (ca) of the Companies Act, 2013, there were no fraud committed against the Company by any person which are reportable under section 141(12) by the Auditors to the Central Government as well as non reportable frauds during the year 2014-15. COMMITTEES OF THE BOARD During the year, in accordance with the Companies Act, 2013, the Board has the following 5 (Five) Committees as follows: (a) Audit Committee (b) Nomination and Remuneration Committee (c) Stakeholders’ Relationship Committee (d) Risk management Committee. (e) Internal Committee for (Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 redressal of complaint at the workplace. Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the “Report on Corporate Governance”, a part of this Annual Report. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business as details has been given in the the relevant schedule in the financial statements annexed with the Board Report and also given in the brscribed Form AOC- 2 as the “Annexure 3”. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. The transactions entered into are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a Certificate from the MD and the CFO of the Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. AUDITORS Statutory Auditors The Company's Auditors, M/s Subhash Chand Jain Anurag & Associates, Chartered Accountants (FRN 04733C), who were appointed for a term of three years at the Annual General Meeting of the Company held on 30th Sept, 2014 are eligible for ratification of their appointment. They have confirmed their eligibility under Section 141(3)(g) of the Companies Act, 2013 and the Rules framed there under for ratification for appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. There is no such observation made by the Auditors in their report which needs any further explanation by the Board. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed CS Pinky Shrivastava (C.P.No. 8035C) a Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year 2014-15 and has further re-appointed for the year 2015-16. The Report of the Secretarial Audit in the Form MR-3 is annexed herewith as "Annexure 4". ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. CORPORATE GOVERNANCE As per the SEBI Circular No. CIR/CFD/POLICY CELL/7/2014 September 15, 2014 in view of the paid up capital and net worth of the Company, the Clause 49 of the Listing Agreement with the BSE Ltd., is not mandatory w.e.f. 1st Oct., 2014. However, in view of the best corporate governance, your company is voluntarily complying certain provisions of the said Clause 49 and a separate section on corporate governance practices followed by the Company, together with the Corporate Governance Report is attached as "Annexure-5" MD & CFO certification Certificate obtained from Shri. Taranjeet Singh Hora, Managing Director and Shri Manmohan Gambhir, Chief Financial Officer, pursuant to provisions of Clause 49(IX) of the Listing Agreement, for the year under review was placed before the Board at its meeting held on 28th August, 2015. A copy of the certificate on the financial statements for the financial year ended March, 31, 2015 is annexed As "Annexure-6" along with this Report. Code of Conduct The Company has formulated the code of conduct for the Board members and senior executives under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 and the SEBI (Prohibition of Insider Trading) Regulations, 1992/2015. A certificate to that effect for the proper compliances given by the Managing Director is annexed as the "Annexure-7" with this Report. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'S REMUNERATION. Pursuant to provision of section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the detail is given in the "Annexure-8." Particulars of remuneration of employees During the year, none of the employees received remuneration in excess of Rs. 60 Lakhs or more per annum. In accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Therefore there is no information to disclose in terms of the provisions of the Companies Act, 2013. CONSOLIDATED FINANCIAL STATEMENTS Since your company is not having any subsidiary company, therefore in view of the Notification No. GSR 723(E) issued by the MCA on 14th Oct., 2014, the Company is not required to brpare consolidated financial statements for its associate companies for the year 2014-15. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-9". MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There have been no material changes and commitments, if any, affecting the financial position of the Company which had occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. EXTRACT OF ANNUAL RETURN st The details forming part of the extract of the Annual Return as on 31st March, 2015 in form MGT-9 is annexed herewith as "Annexure-10". EXPLANATIONS OR COMMENTS ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:- By the Statutory Auditor There are some qualification, reservation or adverse remark or disclaimer in Statuary Audit report. Basis of Qualified Opinion 1. A criminal case has been filed before CJM Gwalior by the Registrar of the Companies, M.P. against the company and its directors under section 295(4) & (5), 211, 372(8) and 383(1A) of Companies Act, 1956 but the impact of the above on the result for the year cannot be brsently determined due to pending ultimate outcome of the matter. 2. A criminal case with Special CBI & Economic Offence Court, Indore is also reflected on the MCA21 Web Portal u/s 162(1) against the company & its Director. But, the impact of the above on the results cannot be determined due to unknown of the outcome. Management Comments: The Company and its concerning directors have submitted their reply to the RoC and the Hon' ble Court for their defences. It is hopeful that the Court may decide the matter in favour of the Company and likely that no major fine would be imposed. The Company is also taking advise to proceed for compounding under the provisions of the Act before the appropriate authority. Emphasis of Matter 1) Note No. 11.1: The Company has advanced Rs.1619055/- against purchase of Plot but the registry is still pending since last several years. In absence of agreement, as in earlier years, in this regard, management opined as the said advances are good and recoverable. Management Comments: the company is trying to get the registry of the plot in the name of the company, however in any case, if the registry could not be made, the company shall recover the amount the seller and the transaction are not brjudice to the interest of the company 2) Note No. 22: The Company's shares are suspended from trading at BSE Ltd. (BSE), Ahmadabad Stock Exchange (ASE), and Madhya Pradesh Stock Exchange (MPSE). However, the company has applied for Revocation of suspension of share with BSE which is yet to be concluded. The Company has also filed delisting application with MPSE which is again pending for conclusion. Management Comments: The recognisation of the MPSE and Ahmadabad stock exchanges have been withdrawn by the SEBI therefore these stock exchanges are not functioning, and no need to take any action as such. The Company has complied with the all the condition of revocation of suspension of share of the company and company has taking regular follow up from the stock exchange and the management is making all the possible efforts for revocation of suspension of trading at the BSE Ltd., which is having nationwide terminals. 3) Note No. 28: Balance of All loan & advances are subject to confirmation and consequential reconciliation, if any from the respective parties. However, the management does not expect any material difference affecting the current year financial statement. Management Comments: The Company has communicated to the various parties for confirmation of balances; however, it is practice of them not to respond. However, none of the party has disputed the balances informed to them. 4) Note No.36: Loans and advances under finance operation include Rs. 1099545/- (P.Y. Rs. 1541062/-) against which legal suit has been filed and case is still pending before District Court. However, the provision for such non-performing assets has been duly made as brscribed by RBI. Management Comments: In the NBFC business activities it is normal in the course of business and the Company is taking effective steps to recover the amount with the help of the Court of law. 5) Note No. 44: Company has given loan to Jyoti Diya amounting to Rs.44 Lacs irrespective of the fact that the loan account has been classified as sub-standard during the current financial year. Management Comments: In order to recover the earlier amount it was considered necessary to provide further financial support, and in the NBFC and Banking business it is general trend to help the parties by way of OTS and to give fresh loans, etc in crises, otherwise, the earlier amount have to be loosed. The amount was given by the Company was in the best interest at the particular point of time. 6) Note No.46: The Company Secretary (KMP) has vacated office w.e.f. 06/10/2014. Management Comments: The observation is not valid, as the Company has already appointed another CS as KMP w.e.f. 10th April, 2015. 7) Note No.48: The Company has entered into few routine business transactions for payment of joint electricity bills and others with TDS FINCAP PVT. LTD. and TDS INFRA ESTATE DEVELOPERS PVT .LTD. are booked as per provision of section 185 and Related Party transaction under section 188 of Companies Act 2013. Management Comments: The Company has provided its brmises to these parties on rental basis and since the power connection is in the name of the Company, it pays and then recovers the amount from the tenants, it is in the routine course of rental activities and not prohibited as such u/s 185 or 188 at all. By the Secretarial Auditor There is some qualification, reservation or adverse remark or disclaimer in Secretarial Audit report they are following:- "During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the observations, That the Company has filed Form MGT-14 for appointment of CS and CFO delayed by 5 days; Form DIR-12 for appointment of CS and CFO delayed by 110 days; Form MR-1 for appointment of CFO and CS delayed by 80 days and Form MGT-10 (6 Forms) delayed by range from 27 to 97 days to the RoC after brscribed period with the adequate additional filing fees, this has reported as compliance by reference ofpayment of additional fees; Management Comments: The Company has filed the forms after some delay with additional filing fee and the same were also approved by the RoC/MCA, therefore, the late filing is permissible with additional filing fee and cannot be considered as qualification as such. 1. An inspection u/s 209A Companies act, 1956 has been made by the Registrar of Companies M.P. & C. G. Gwalior in brvious years. The matter is still pending with ROC and Court. 2. A Criminal case has been filed before Chief Judicial Magistrate of Gwalior by the Registrar of the Companies, M.P. against the company and its directors under section 295(4) & (5), 211, 372(8) and 383(1A) of Companies Act, 1956. The matter is still pending with ROC and Court. 3. There is a litigation pending against the Company and its Directors under section 162(1) in the court of Special CBI and economic offence court, INDORE. Management Comments for the Point 1 to 3 The Company and its concerning directors have submitted their reply to the RoC and the Hon'ble Court for their defenses. It is hopeful that the Court may decide the matter in favour of the Company and likely that no major fine would be imposed. The Company is also taking advice to proceed for compounding under the provisions of the Act before the appropriate authority 4. Loans and advances under finance operation include Rs. 10,99,545/- (P.Y. Rs. 15,41,062/-) against which legal suit has been filed and case is still pending before District Court. Management Comments: The matter is out of the scope of the secretarial Audit and the Independent auditors have already reviewed the same. 5. The company has entered into some routine business transactions for payment of joint electricity bills and joint payments of consultancy charges with TDS FINCAP PRIVATE LIMITED amounting to rupees 62,311/- and TDS INFRA ESTATE DEVELOPERS PRIVATE LIMITED amounting to rupees 54,000/- as shown in its books of accounts during the audit period which attract the provisions of Loans to Directors under Section 185 and Related Party Transactions under Section 188 of Companies act, 2013, due to common directorship of two directors Mr. Taranjeet Singh Hora and Mrs. Ranjeet Kaur Hora. However the Company has not complied with the provisions of the Act in this regard. Management Comments: Please the reply given for the similar nature observation also raised by the Independent Auditors. 6. The office of the Company Secretary (KMP) is vacated during the Audit period from 6th October, 2014 to 9th April, 2015. However the delay in appointment of Company Secretary was only of 3 days. Management Comments: As there are shortage of the qualified members of the ICSI, even though the Company has made efforts and has appointed CS within 6 months time, itself, however due to joining time taken by the CS there was negligible delay of three days, which is immaterial. 7. Following forms with the ROC were filed after due date such as:- a) MGT14 for resignation of CFO was filed after the delay of225 days. b) MGT 14 for resignation of Company Secretary was filed after the delay of 79 days. c) MGT 14 for approval of balance sheet and Profit and loss account for year ended 2013-14was filed after the delay of 130 days. d) MGT 14 of quarter ended 30th June 2014 for unaudited financial result was filed after the delay of 180 days. e) Form 66 for compliance certificate filed after the delay of 21 days. f) Form 23 AC & ACA for Balance sheet and Profit and Loss statement were filed after delay of 24 days. g) DIR 12 for appointment of director Shri. Kailash Mandpe was filed after delay of 122 days. h) FORM 20 B for Annual Return was filed after delay of 90 days. Management Comments: Please refer reply to the Point No. 1 which is self explanatory SEBI & Listing Compliances:- 1. The Company and its Directors declared that the website of the Company crashed due to some technical issues and the Policy document of vigil mechanism, code of conduct, related party transactions, succession planning, appointment of independent director were could not updated on website of the company during my audit period. Management Comments: The website has been properly updated by the Company. 2. Chief Financial officer (CFO) of the company has not signed the document of CEO/CFO certificate attached with Annual report for the year ended 2013-14 of the company. Management Comments: Due to the health reason the CFO was hospitalized at the particular time, therefore signatures could not be taken from the CFO, However the Managing Director has certified the same. 3. Result of quarter ended 31 March 2014, 30 June 2014 and brss release for board meeting of 30 June 2014, 30 September 2014 were not published in newspaper as required under clause 41 of listing agreement. 4. Result for quarter ended 30 June 2014, was sent by the Company to stock exchanges required under clause 41 of listing agreement but it was not updated on BSE websites. Management Comments for Point No. 3 & 4: Since the Company's shares are suspended by the BSE, there was no proper clarity about the applicability of the listing provisions during the suspended period, the Company has not published the same in the newspapers, however, were sent to BSE and the BSE has also hosted at its website, therefore the above said results were available at the BSE platform which may be considered as the proper compliances by a company where trading platform was suspended. 5. The company has failed to give the disclosure provided under regulation 29(1) and (2) of Substantial Acquisition and Takeover code, 2011 with the exchange in inter se transfer between promoters of 1,30,000 shares from UNNO Industries limited to Harman Singh Hora dated 29th March, 2014. 6. The company has filed shareholding pattern to stock exchange for the quarter ended 30 September 2014, under Clause 35 of listing agreement after the delay of 8 days. 7. The Company's shares are suspended from trading at Bombay Stock Exchange Ltd. (BSE), Ahmadabad Stock Exchange (ASE), and Madhya Pradesh Stock Exchange (MPSE). However the Company has applied for Revocation of suspension of Share with BSE which is yet to be concluded. The Company has also filed delisting application with Madhya Pradesh Stock Exchange (MPSE), which is again pending for conclusion. Management Comments Point No. 5 to 7: The recognisation of the MPSE and Ahmedabad stock exchanges have been withdrawn by the SEBI therefore these stock exchanges are not functioning, and no need to take any action as such. The Company has complied with the all the condition of revocation of suspension of share of the company and company has taking regular follow up from the stock exchange and the management is making all the possible efforts for revocation of suspension of trading at the BSE Ltd., which is having nation wide terminals. NBFC & Other laws:- 1. The Company has advanced Rs. 16,19,055/- against the purchase of a plot but the registry is pending since several years. In absence of agreement, as in earlier in this regard, management opined as the said advances are good and recoverable. 2. Company has given loan to Jyoti Diya amounting Rs. 44 Lacs irrespective of fact that the loan account is classified sub-standard during the current financial year. 3. A case filed by Commercial Tax department is pending against the company. Management Comments: Please the reply given for the similar nature observation also raised by the Independent Auditors. brVENTION OF INSIDER TRADING In view of the SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires Trading Plan, br-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. ACKNOWLEDGEMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere apbrciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. For and on behalf of the Board Taranjeet Singh Hora Chairman & Managing Director DIN 00200864 Place: Indore Date: 28th August, 2015 |