Directors' Report To, The Members, 1.Your Directors have pleasure in presenting their Annual Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31st March, 2015. 2. PERFORMANCE: Due to recession and acute competition in the Steel Industry, Performance of your Company for the year under review was affected. Income from tender support services reduced as compared to the previous year and consequently profits for the year also diminished. The Board of Directors of the Company is continuously making efforts for the growth of the Company. 3. DIVIDEND: Due to loss during the year, the Company is not able to declare Dividend 4. SHARE CAPITAL: At present, the Company has only one class of shares - equity shares with face value of Rs 10/- each. The authorized share capital of the company is Rs 19,00,00,000/- divided into 19,00,00,00 equity shares of Rs. 10/-each. The paid up share capital of the company is Rs 94,336,380/- divided into 94,336,38 equity shares of Rs 10/-each. 5. DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 6. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE: During the period under review, several energy conservation initiatives were adopted and were taken by the Company and its subsidiaries. There are no plans to import any kind of technology for the project and hence information regarding its absorption is not applicable. There was no research activities carried out during the year as well as no foreign exchange income or outgo during the year. 7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: There were no such material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the Company. 8. SCHEME OF ARRANGEMENT: Te High Court of Gujarat has passed order on 19/09/2014 for sanctioning the Scheme of Arrangement between Lesha Industries Limited and ECS Biztech Private Limited. Pursuant to Scheme of Arrangement between Lesha Industries Limited and ECS Biztech Limited, becoming effective on 19/09/2014, the shareholders are allotted 27 new equity shares of the Company for every 50 shares held on record date. 9. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS: No such Orders have been passed by the Regulators/Court or Tribunals which can impact the going concern status and Company's operation in future. 10. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES: The Company has Associate Company. Hence, details relating to Associate Company are provided in Director Report. 11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT BY THE COMPANY: Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. 12. MEETING OF BOARD OF DIRECTORS: During the year under the review, 7 (seven) Board meetings were held, with gap between Meetings not exceeding the period prescribed under the Companies Act, 2013 and Rules made thereunder. Details of Board and Board committee meetings held during the year are given in the Corporate Governance Report. Board meeting dates are finalized in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions. The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013. 13. EXTRACTS OF ANNUAL RETURN: An extract of Annual Return in Form MGT-9 is attached herewith as ANNEXURE-II. 14. INSURANCE: All the Properties of the Company are adequately insured. 15. 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. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large and thus disclosure in Form AOC-2 is not required. The Board has formulated Policy on Related Party Transactions. 16. DIRECTORATE AND KEY MANAGERIAL PERSONNEL: The Board of Directors of your company has various executive and non-executive directors including Independent Directors who have wide and varied experience in different disciplines of corporate functioning. In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Ashok C. Shah (DIN: 02467830) retires by rotation at the ensuing Annual General Meeting and being eligible in terms of Section 164 of the Act offers himself for re-appointment. The Company had, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. Hitesh M. Donga (DIN: 03393396), Mrs. Dakshaben Dhirenbhai Bhatt (DIN: 03472634), as an Independent Directors of the Company. As per section 149(4) of the Companies Act, 2013 (Act), which came into effect from 1st April, 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Director. In accordance with the provisions of section 149 of the Act, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company. 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. There is change in the constitution of Board of Directors during the year Mrs. Dakshaben Dhirenbhai Bhatt was appointed on 30/03/2014 and Mr. Keyoor Bakshi stepped down from the Board w.e.f. 30/03/2014. As required under Section 203 of the Companies Act, 2013, the Company has Mr. Shalin A. Shah under Key Managerial Personnel of the Company. 17. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS: Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement and Companies Act, 2013, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board. The following were the Evaluation Criteria: (a) For Independent Directors: - Knowledge and Skills - Professional conduct - Duties, Role and functions (b) For Executive Directors: - Performance as Team Leader/Member. - Evaluating Business Opportunity and analysis of Risk Reward Scenarios - Key set Goals and achievements - Professional Conduct, Integrity - Sharing of Information with the Board The Directors expressed their satisfaction with the evaluation process. 18. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS: The Board has on the recommendation of the Nomination & Remuneration Committee, formulated criteria for determining Qualifications, Positive Attributes and Independence of a Director and also a Policy for remuneration of Directors, Key managerial Personnel and senior management. 19. MANAGERIAL REMUNERATION The Company had not paid any remuneration to Executive Directors or any sitting fees to Non-Executives Directors for attending any meetings during the financial year ended 31st March, 2015. 20. INDEPENDENT DIRECTORS' MEETING: Independent Directors of the Company had met during the year under the review on 14/08/2014 and 14/02/2015. 21. COMMITTEES OF THE BOARD: During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees and also formed a Nomination and Remuneration Committee. There are currently Three Committees of the Board, as follows: Audit Committee Nomination and Remuneration Committee Stakeholders' Relationship Committee 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. 22. AUDITORS: A. Statutory Auditors M/s. Pradip B. Gandhi & Co., Chartered Accountants (Firm Registration No.118674W) were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 30th September, 2014 for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. The Company has obtained a written confirmation under section 139 of the Companies Act, 2013 from M/s. Pradip B. Gandhi & Co., Chartered Accountants, Ahmedabad (FRN 101895W) that their appointment, if made, would be in conformity with the limits specified under the Act. It is proposed to ratify the appointment M/s. Pradip B. Gandhi & Co., Chartered Accountants (Firm Registration No.118674W) to audit the accounts of the Company for the financial year 2015-2016. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. The notes to the accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. B. Secretarial Auditors Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Patel & Associates, Practicing Company Secretaries, Ahmedabad to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure IV There is no qualification, reservation or adverse remark in the report. 23. INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK: The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Company has appointed M/s. Naimish K. Shah & Co., Chartered Accountant (FRN 106828W) as an Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficiency & adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively. 24. RISK MANAGEMENT: Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. Major risks identified for the Company by the management are Currency fluctuation, Compliances of various applicable Laws, Regulatory changes, Manufacturing & Supply, Litigation, Technological Changes and new capital investments return. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialize. 25. VIGIL MECHANISM AND WHISTLE BLOWER POLICY: In accordance with Section 177 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Company has constituted a Whistle Blower Policy/ Vigil Mechanism to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct. 26. PREVENTION OF INSIDER TRADING: 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 pre-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. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. 27. DIRECTORS' RESPONSIBILITY STATEMENT: In accordance with the provisions of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that- i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. 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 31st March, 2015 and of the profit and loss of the company for that period; iii. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 and Rules made thereunder for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv. The directors had prepared the annual accounts on a going concern basis; and v. 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. 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. 28. CORPORATE GOVERNANCE: As required by the existing Clause 49(X) of the Listing Agreement entered into with the Stock Exchanges, a detailed report on Corporate Governance is given as a part of the Annual Report. The Company is in full compliance with the requirements and disclosures that have to be made in this regard. The Company Secretary's Certificate of the compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance. Report on Corporate Governance is given elsewhere in this Annual Report, herewith attached as ANNEXURE VI. 29. CORPORATE GOVERNANCE CERTIFICATE: The Compliance certificate from the Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing agreement is appended to the report on Corporate Governance., herewith attached as Annexure VII. 30. GENERAL SHAREHOLDER INFORMATION: General Shareholder Information is given in Report on Corporate Governance forming part of the Annual Report. 31. ACKNOWLEDGEMENT: Your Directors take this opportunity to express their gratitude for the unstinted commitment, dedication, hard work and significant contribution made by employees at all levels in ensuring sustained growth of the Company. Your Directors also sincerely thank to all the stakeholders, customers, vendors, bankers, business associates, government, other statutory bodies and look forward to their continued assistance, co-operation and support. For and on behalf of the Board SD/- Shalin Shah Director DIN:00297447 SD/- Ashok Shah DirectorDIN:02467830 Place: Ahmedabad Date: 14th August, 2015 |