DIRECTORS' REPORT TO THE MEMBERS OF TANEJA AEROSPACE AND AVIATION LIMITED Your Directors present herewith the Twenty-sixth Annual Report and the Audited Accounts for the year ended March 31, 2015. DIVIDEND Your Directors are unable to recommend a dividend for the year ended on March 31, 2015, in view of the loss. OPERATIONS The gross income was lower since Engineering design services division was hived off w.e.f. August 1, 2013. During the year the Company commenced the business of trading activity of electrical goods. SCHEME OF ARRANGEMENT The Board of Directors of your Company at its meeting held on October 9, 2014, approved the Scheme of Arrangement between Taneja Aerospace and Aviation Ltd. & TAAL Enterprises Ltd. a wholly owned subsidiary of the Company & their respective shareholders ("Scheme") for demerger of Charter business & investment in First Airways Inc. & TAAL Tech India Pvt. Ltd. The Scheme was subsequently approved by Hon'ble High Court of Judicature at Madras vide its Order dated June 22, 2015. The Scheme will become effective upon filing the said Order with the Registrar of Companies. However, the details of Discontinuing operations as required by AS-24 form part of the Notes to Accounts. INDEPENDENT DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. R Poornalingam and Mr. N Chandra were appointed as Independent Directors of the Company w.e.f November 13, 2014. Mr. Ajay Gupta was appointed as Chief Financial Officer of the Company w.e.f November 13, 2014. Ms. Priya Nair resigned as Company Secretary and Compliance Officer of the Company w.e.f. May 29, 2015 due to personal reasons. Mr. Chetan Nathani has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. August 14, 2015. The Independent Directors of the Company had given a declaration pursuant to Section 149(7) of the Act. The Company has d evis e d a P o lic y for per formance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the Non-Executive Directors and Executive Directors like : Knowledge and Skills, Familiarity with the Company and its business, Monitoring Company's Corporate Governance Practices, Development of strategies and risk management, Participation and attendance in meetings, Professional conduct, Sharing of information etc. The details of familiarization programme of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on its website www.taal.co.in OTHER DIRECTORS In accordance with the provisions of the Companies Act, 2013 ('Act') and the Articles of Association of the Company, Mr. C.S. Kameswaran retires by rotation and being eligible, offers himself, for re-appointment. Mr. J. P Sureka resigned as Director of the Company w.e.f. December 2, 2014 due to personal reasons. The Board placed on records its appreciation and gratitude for his guidance and contribution to the Company. Mr. S M Kapoor, Chief Executive Officer (CEO) of Aircraft Manufacturing Complex, Hosur of the Company was appointed as Whole-time Director designated as the Managing Director (MD) of the Company w.e.f December 1, 2014. Unfortunately, owing to ill health, Mr. S.M. Kapoor had to resign as MD of the Company w.e.f. April 1, 2015. The Board placed on records its appreciation and gratitude for his guidance and contribution to the Company. The Members of the Company had approved the appointment of Mr. Salil Taneja as Whole-time Director of the Company on March 31, 2015. Mr. C.S. Kameswaran ceased to be MD as on November 30, 2014 and has continued to be a Non-Executive Director thereafter. Mr. K. Rustumji resigned as Director of the Company w.e.f August 14, 2015 due to personal reasons. The Board placed on records its appreciation and gratitude for his guidance and contribution to the Company. Mr. B. R. Taneja resigned as Director of the Company w.e.f. August 15, 2015. The Board placed on records its appreciation and gratitude for his guidance and contribution to the Company. Mrs. Preeti Taneja & Mr. Raj K. Sureka have been appointed as an Additional Directors of the Company w.e.f. August 14, 2015 to hold office upto the ensuing Annual General Meeting. AUDITORS M/s. Haresh Upendra & Co., Chartered Accountants retire as Statutory Auditors of the Company at the conclusion of ensuing Annual General Meeting but do not offer themselves for re-appointment. M/s. MZSK & Associates, Chartered Accountants have confirmed that their appointment as Statutory Auditors of the Company for the financial year 2015-16 will be in compliance with Section 141 of the Companies Act, 2013 and offer themselves for appointment as Statutory Auditors of the Company for the financial year 2015-16 pursuant to Section 139 of the Act. The Directors sincerely thank M/s. Haresh Upendra & Co., Chartered Accountants for the professional services rendered by them to the Company. As regards Auditors' remarks, amounts due from LightO Technologies Pvt. Ltd. are being regularly received subsequent to the Balance Sheet date and the entire outstanding amount is fully recoverable. Further, amounts paid to Associate Company represent expenses incurred in the ordinary course of business. Other remarks of Auditors have been suitably dealt with in the Directors Report and Notes to Accounts. COST AUDIT The Cost Audit Report for the year 2013-14 was due on September 30, 2014 and was filed with the Ministry of Corporate Affairs on September 26, 2014. Cost Audit is not applicable to the Company effective from financial year 2014-15. SUBSIDIARY AND ASSOCIATE COMPANIES During the year under review, Katra Auto Engineering Private Limited became wholly-owned subsidiary of the Company and TAAL Enterprises Limited was incorporated as wholly-owned subsidiary of the Company. TAAL Aerosystems Private Limited ceased to be an Associate Company effective April 07, 2015. As on date of this report, the Company has five direct and indirect subsidiaries. A Report in Form AOC-1 on performance & financial position of each of the subsidiaries as per the Companies Act, 2013 is provided in the financial statements forming part of this Annual Report. The Company has framed a Policy for determining Material Subsidiaries which is available on its website www.taal.co.in FIXED DEPOSITS The Company has not accepted any deposits from the public. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Management Discussion & Analysis and Corporate Governance together with Certificates is forming part of this Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, your Directors make the following statement: i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates, that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2015 and of the Loss of the Company for that period; iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the annual accounts on a going concern basis; v) That considering the size and nature of business 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; vi) That 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. EXTRACT OF ANNUAL RETURN The extract of Annual Return in Form MGT-9 is forming part of this Report as Annexure A. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO The particulars as required under Section 134(3)(m) of the Companies Act, 2013 is forming part of this Report as Annexure B. NOMINATION AND REMUNERATION POLICY The Nomination and Remuneration Policy of the Company on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters is available on its website www.taal.co.in The criteria for performance evaluation as laid down by Nomination and Remuneration Committee has been defined in the Nomination and Remuneration Policy. Details pertaining to remuneration of Directors and employees required under Section 197(12) of the Companies Act, 2013 read with Rules framed thereunder are forming part of this Report as Annexure C. SECRETARIALAUDIT REPORT Pursuant to Section 204 of the Companies Act, 2013 the Board has appointed M/s. MRM Associates, a firm of Company Secretaries in Practice as Secretarial Auditors to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Report of the Secretarial Auditors in Form MR-3 is forming part of this Report as Annexure D. The Company is in the process of appointing an Independent Director and a Woman Director to address the observations mentioned in the Secretarial Audit Report and upon demerger, the Company will not have any material unlisted Indian Subsidiary. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Particulars of Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 is mentioned in notes to the Financial Statements forming part of this Report. RISK MANAGEMENT The Company is developing a risk management frame work including the policy covering material risks. The Company has already identified the key risk as delays in award of Government Orders for its core manufacturing. INTERNAL FINANCIAL CONTROLS Internal controls of the Company are being strengthened with the help of the CFO appointed during the year, taking into account the changing business requirements and the comments of the Auditor. AUDIT COMMITTEE AND VIGIL MECHANISM The Composition of Audit Committee is mentioned in Report on Corporate Governance which is forming part of this Report. The Whistle Blower Policy/ Vigil Mechanism of the Company was established by the Board and is available on its website www.taal.co.in CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which were either not at an arm's length or not in the ordinary course of business and further could be considered material in accordance with the policy of the Company on materiality of related party transactions. Hence, there is no information to be provided in Form AOC-2 while the particulars of all Related Party Transactions in terms of AS-18 are forming part of the financial statements. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.taal.co.in GENERAL 1. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 2. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENTS The Directors express their appreciation for the continued support and co-operation received by the Company from its Customers, Bankers, Shareholders, Suppliers, Business Partners, Defence Research and Developmental Organizations, Aviation Authorities and other Indian Services and the Central and State Governments. The Directors also express their gratitude and sincere appreciation to all the employees of the Company for their contribution, hard work and commitment. For and on behalf of the Board of Directors Salil Taneja Chairman Place :Pune Date : August 14, 2015 |