BOARD'S REPORT TO THE MEMBERS, The Directors have pleasure in presenting before you the 16th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. REVIEW OF OPERATIONS: During the year under review, the Company has recorded a consolidated income of Rs.1355 lakhs and the profit of Rs. 125.10 lakhs as against an income of Rs.2283.39 Lakhs and profit of Rs. 12716.06 Lakhs in the previous financial year ending 31.03.2014. DIVIDEND: Since the Company has ventured in to new businesses after sale of its business and distribution of sale proceeds among its shareholders, your Board of Directors regret their inability to declare dividend for the financial year 2014-2015. REDUCTION OF CAPITAL: The Company has pursuant to Hon'ble High court order dated 09.06.2015, reduced the paid up capital of the Company to the extent of sixty percent which is in excess of the business requirements of the Company. Consequently, the issued, subscribed and Paid-up capital shall stand reduced from Rs. 195,184,850/- (Rupees Nineteen Crore Fifty One Lakhs Eighty Four Thousand Eight Hundred and Fifty Only) consisting of 39,036,970 (Three Crore Ninety Lakhs Thirty Six Thousand Nine Hundred and Seventy Only) Equity Shares of Rs. 5/- (Rupees Five Only) each fully paid-up to Rs. 78,073,940 (Rupees Seven Crore Eighty Lakhs Seventy Three Thousand Nine Hundred and Forty Only) consisting of 15,614,788 (One Crore Fifty Six Lakhs Fourteen Thousand Seven Hundred and Eighty Eight Only) Equity Shares of Rs. 5/- (Rupees Five Only) each. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES: Palred Technology Services Private Limited and Palred Online Technologies Private Limited are the subsidiary companies of Palred Technologies Limited.The performance details of the Subsidiary companies are as under: MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Management Discussion and Analysis as required under clause 49(VIII)(D) of the Listing Agreement forms a part of this Report. CORPORATE GOVERNANCE A Separate section titled "Report on Corporate Governance" along with the Auditors' Certificate on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this report. 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. DIRECTORS AND KEY MANANGERIAL PERSONNEL: During the year, Mr. Atul Sharma, Mr.S.Vijaya Saradhi and Mrs. Richa Patnaik were appointed as Additional Directors. Now the Board proposes to appoint themas Independent Directors in line with the requirements of the Companies Act, 2013, it is therefore proposed to appoint existing additional directors in the independent category, as Independent Director on the Board of the Company for a term up to five consecutive years. A brief profile of proposed Independent Directors, including nature of their expertise, is provided in this Annual Report. a) Notice has been received from Members proposing candidature of the Director namely Mr. Atul Sharma, Mr. S. Vijaya Saradhi and Mrs. Richa Patnaik for the office of Independent Director of the Company. In the opinion of the Board, they fulfil the conditions specified in the Companies Act, 2013 and the Rules made there under for appointment as Independent Director of the Company. Mr. T.R.Sivarama Krishnan, Ms. A. Amala and Mr Mohan Krishna Reddy have resigned from the post of Directors w.e.f. 14.08.2015 Mr. E. Srinivas Prasad has resigned from the post of Director we.f 31.08.2015 DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS The Company has received a declaration from, Mr. S. Vijaya Saradhi, Mr. Atul Sharma and Mrs. Richa Patnaik, Independent directors of the company to the effect that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013. VIGIL MECHANISM: Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company www.palred.com <http://www.palred.com>. DIRECTOR'S RESPONSIBILITY STATEMENT: In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that: (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; and (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. AUDITORS AND AUDITORS REPORT In the previous Annual General Meeting ( 15th AGM), the Company has appointed M/s. Walker Chandiok & Co., LLP, Chartered accountants as statutory Auditors to hold office until the conclusion of the 16th annual General Meeting. The Company has already received letter from them to the effect that their appointment, if made by the shareholders, would be within the prescribed limits and that they are not disqualified for re-appointment within the meaning of the Companies act 2013. The Board of Directors recommend their re-appointment for the financial year 2015-16. INTERNAL AUDIT: M/s. Lakshmi Niwas & Co., Chartered Accountants, Hyderabad are the Internal Auditors of the Company. 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, Mr. S.Sarveswara Reddy, Practicing Company Secretary has conducted Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed hereto and forms part of this Annual report. The Company on large scale operations globally is in the process of appointing right candidate as CFO. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO: The required information as per Sec.134 (3) (m) of the Companies Act 2013 is provided hereunder: A. Conservation of Energy: Your Company's operations are not energy intensive. Adequate measures have been taken toconserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment. B. Technology Absorption: 1. Research and Development (R&D): NIL 2. Technology absorption, adoption and innovation: NIL C. Foreign Exchange Earnings and Out Go: Foreign Exchange Earnings: NIL Foreign Exchange Outgo: 95,15,312 PUBLIC DEPOSITS: Your Company has not accepted any deposits falling within the meaning of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014, during the financial year under review. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS: Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board. INSURANCE: The properties and assets of your Company are adequately insured. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Details of loans, guarantees or investments made under section 186 of the companies Act, 2013 are given in the note to the financial statements. CREDIT & GUARANTEE FACILITIES: The Company has not availed any facilities of Credit and Guarantee. RISK MANAGEMENT POLICY: Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process. CORPORATE SOCIAL RESPONSIBILITY POLICY: Since your Company do not have the net worth of Rs. 500 Crore or more, or turnover of Rs. 1000 Crore or more, or a net profit of Rs. 5 Crore or more during the financial year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with the promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. As required under clause 49(V)(D) of the listing agreement, the Company has formulated a policy for determining 'material' subsisdiaries, the said policy is disclosed at Company's website at www.palred.com <http://www.palred.com>. As required under clause 49(VIII)(A)(2) of the listing agreement, the Company has disclosed the policy on dealing with related party transactions at Company's website at www.palred.com <http://www.palred.com>. Your Directors draw attention of the members to Note 32 of the financial statement which sets out related party disclosures. DISCLOSURE ABOUT COST AUDIT: Cost Audit is not applicable to your Company. RATIO OF REMUNERATION TO EACH DIRECTOR: Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) & (3) of the Companies(Appointment & Remuneration) Rules, 2014, the ratio of remuneration paid to Managing Director and maiden employees is 1:18. LISTING WITH STOCK EXCHANGES: The Company is listed with BSE Limited and National Stock Exchange India Limited (NSE) and confirms that it has paid the Annual Listing Fees where the Company" s Shares are listed. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required. SECRETARIAL STANDARDS EVENT BASED DISCLOSURES During the year under review, the Company has not taken up any of the following activities: 1. Issue of sweat equity share: NA 2. Issue of shares with differential rights: NA 3. Issue of shares under employee's stock option scheme: NA 4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: NA 5. Buy back shares: NA 6. Disclosure about revision: NA 7. Preferential Allotment of Shares: NA EMPLOYEE RELATIONS: Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company. None of the employees is drawing Rs. 5,00,000/- and above per month or Rs. 60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013. 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 workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed during the calendar year. • No. of complaints received: Nil • No. of complaints disposed off: Nil ACKNOWLEDGEMENTS: Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company like SEBI, BSE, NSE, NSDL, CDSL, ICICI Bank, Kotak Mahindra Bank and State Bank of India etc. for their continued support for the growth of the Company. For and on behalf of the Board Palred Technologies Limited PalemSrikanth Reddy Managing Director (DIN: 00025889) Date: 31.08.2015 Place: Hyderabad |