DIRECTOR'S REPORT To, The Members, 1. Your Directors have pleasure in presenting their 38th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015. 2. COMPANY'S PERFORMANCE AFFAIR Your Directors are positive about the Company's operations and making best efforts to implement the cost reduction measures to the extent feasible. 3. DIVIDEND Considering the present financial status of the Company, your directors do not recommend any dividend for the year under report. 4. RESERVES AND SURPLUS The Debit balance of Profit & Loss statement amounting to Rs. (14,32,460) for financial year under review is transferred to reserves. The total reserves for the financial year 2014-15 is Rs. (9,16,61,986). 5. SHARE CAPITAL The total paid up capital of the Company as on March 31, 2015 is Rs. 8,37,02,770/- comprising of 55,00,277 Equity Shares of Rs. 10/- each amounting to Rs. 5,50,02,770/- and 2,87,000, 12% Cumulative Redeemable Preference Shares of Rs. 100/- each amounting to Rs. 2,87,00,000/-. 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL The members at 35th Annual General Meeting appointed Mr. Vishal Dedhia as Whole-time Director for a period of 3 years. His term of appointment is expiring on 31st August, 2015. In view of the above Board of Directors are seeking members approval for re-appointment of Mr. Vishal Dedhia as Whole Time Director for a period of 3 years i.e. from 1st September, 2015 and 31st August, 2018 (both days inclusive) Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Vishal Dedhia has been appointed as Chief Financial Officer in the Board Meeting held on 31st March, 2015. Further, the the appointment of Mr. Dinesh Bainwal is regularized as per Section 161 of the Companies Act, 2013, who was appointed as an Additional Independent Director on 3rd July, 2015 for the term upto the ensuing Annual General Meeting. The Company has received declaration from all the Independent Directors of the Company confirming that they meet criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013. 7. MEETINGS A calendar of Meetings is prepared and circulated in advance to the Directors. During the year Six Board Meetings and Four Audit Committee Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 8. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration committee. 9. COMMITTEES OF THE BOARD During the year, in accordance with provision of Companies Act, 2013, the Board of Directors of the Company has re-named the existing committees viz., Stakeholders Relationship Committee [formerly known as Shareholders'/Investors' Grievance Committee"] and nomination and Remuneration Committee (formerly known as Remuneration Committee). There are currently three committees of the Board, as following: 1) Audit Committee The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect of auditing and accounting matters. It also supervises the Company's financial reporting process 2)Nomination and Remuneration Committee The Company has constituted Nomination and Remuneration Committee and presently the Remuneration committee comprises of 3 (three) Director, out of which 2 are non executive and independent Directors. 3) Stakeholders Relationship Committee The Board of Directors of the Company has constituted a Committee of Directors which also functions as 'Shareholders'/Investors Grievances Committee', consisting of two members, chaired by non executive Director. The Committee, inter-alia, deals with various matters relating to: • Transfer/transmission of shares; • Issue of duplicate share certificates; • Investors' grievances and redressal mechanism and recommend measures to improve the level of investor services. 10. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. 11. DIRECTOR'S RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, the directors would like to state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed. b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the year under review. c) The directors have 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 have 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. 12. AUDITORS The Auditors, M/s Sanjay Kumar Maheswary, Chartered Accountants, Kolkata, retire at the ensuing Annual General Meeting and, Mr. Chetan N. Dedhia, Chartered Accountant, Mumbai is appointed as Statutory Auditor of the Company in place of retiring Auditor from this Annual General Meeting [AGM] till the conclusion of 43rd Annual General Meeting of the Company. 13. AUDITORS' REPORT Auditor's observation and Management's explanation to the Auditor's observation - The Directors refer to the Auditor's observation in the Auditor's Report and as required under Section 134 (1) (f) of the Companies Act, 2013, provide their expiation as under: a) EROSION OF NET WORTH OF THE COMPANY DUE TO ACCUMULATED LOSSES Your directors wish to state that the Company is taking all necessary steps to protect further erosion. The management believes that the business loss is a temporary phenomenon and is working towards the revival of the Company. b) OTHER OBSERVATIONS With reference to the other observations made by the Auditor in this Report, your Directors wish to state that the relevant notes forming part of Company's Accounts are self explanatory and hence do not require any further explanation from the Board. 14. SECRETARIAL AUDIT REPORT Secretarial Auditor's observation and Management's explanation to the Auditor's observation - The Director refers to the Auditor's observation in the Secretarial Audit Report and as required under Section 204(1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. a) Non redemption and Non Payment of Dividend on Redemption of 287000 12% Cumulative Redeemable Preference Shares of Rs. 100/- each. With reference to the above stated remark of Secretarial Auditor your Directors' want to inform you that due to adverse financial position of the Company it was not possible to redeem the Preference shares as per the terms of issue of the said preference shares. Also due to insufficient profits the Company was unable to pay the dividend on time. The Company had obtained Non objection Certificate from Preference Share Holder with regard to the nonpayment of Dividend and Non redemption of Preference shares. b) Non appointment of Company Secretary The Board would like to bring to your notice that the Company has been trying to recruit a Company Secretary on best efforts basis since a long time but the Company has not been successful in doing so because of financial constraints. c) Clause 41 - Publication of Results audited and unaudited in news paper The company has not been doing that since the financial position of the company does not allow Board to incur such expenditure keeping in mind that the results are made available for investors and market through Stock Exchange. The Company on timely basis submits the results to the Exchange to bring the information in public domain. d) Non appointment of Internal Auditor Due to financial constraints the Board decided to appoint the Internal Auditor in Next Financial year keeping in mind revival of the Company in near future. e) Delay in compliance with Clause 31 of the Listing Agreement The Board would like to inform that there was a delay of 1 day in complying with the requirements of Clause 31. However Company has paid the penalty for the same and also complied with the Clause 31 of the Listing Agreement as well. The report of the Secretarial Auditors is enclosed as Annexure II to this report. 15. VIGIL MECHANISM In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.smcl.co.in under investors/policy documents/Vigil Mechanism Policy link. 16. RISK MANAGEMENT POLICY The Company has laid down a well defined Risk Management Policy. The Board periodically reviews the risk and suggests steps to be taken to control and mitigate the same through a proper defined framework. 17. EXTRACT OF ANNUAL RETURN As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I . 18. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.smcl.co.in. 19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of energy, technology absorption, foreign exchange earnings and outgo are Nil during the year under review. 20. INDUSTRIAL RELATIONS: During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. 21. LISTING WITH STOCK EXCHANGES The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE Limited. The Company is also listed on the Calcutta Stock Exchange Limited (CSE). 22. OTHER INFORMATION Your Directors hereby states that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. There are no contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013. 2. Your Company has not provided Loans, Guarantees or made Investment pursuant to Section 186 of the Companies Act, 2013; 3. The Provision of Section 135 of the Act with respect to Corporate Social Responsibility (CSR) is not applicable to the Company, hence, there is no need to develop policy on CSR and take initiative thereon; 4. The Company do not have any subsidiary, joint venture or, associate Company, hence, no need to state anything about the same; 5. The Company has not accepted deposits covered under Chapter V of the Act; 6. No significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. 7. Since, the Company having paid-up capital less than the threshold provided under Clause 49 of the Listing Agreement, hence, the Company need not required to address Reports on Corporate Governance, certificate/s pertains thereto and, Management Discussion and Analysis Report 8. There are no employees who are in receipt of salary in excess of the limits prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 23. ACKNOWLEDGEM ENTS An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results. For and on behalf of the Board of Directors Vishal Dedhia Whole-time Director & CFO Namrata Malu Director Place:Kolkata Date:13th August 2015 |