Director's Report To, The Members of PRERNA INFRABUILD LIMITED Your Directors have pleasure in presenting the 27thBoard's Report of your Company together with the Audited Statement of Accounts and the Auditors' Report for the financial year ended, 31st March, 2015 STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK Net Revenue from operations for the year ended March 31, 2015 was Rs. 17.82 lacs showing a decrease of 72.42% over the previous year. Profit before tax for the year was at Rs. 43.98 lacs showing decrease of 32.80% over the previous year. CHANGE IN NATURE OF BUSINESS, IF ANY Your Company continues to operate in same business segment as that of previous year and there is no change in the nature of the business DIVIDEND In order to conserve the resources of the Company, the Board of directors has not recommended any dividend for current year. AMOUNTS TRANSFERRED TO RESERVES The Board of Directors proposed to carry nil amounts to General Reserve Account and an amount of Rs 43.98 lacs has been retained in profit & loss Account. CHANGES IN SHARE CAPITAL, IF ANY There are no changes in share capital of the company during the year INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY Company has invested in partnership firm M/s. Prerna Infrabuild. The Company holds 50% share in it. MATERIAL CHANGES AND COMMITMENTS Material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which these financial statements relate on the date of this report are nil. BOARD AND AUDIT COMMITTEE During the Financial Year 2014-15, the Company held four meetings of the Board of Directors as per Section 173 of Companies Act, 2013 and four meetings of the Audit Committee. All the recommendations made by the Audit Committee during the year were accepted by the Board. The details of the constitution and meetings of the Board and the Audit Committees held during the year are provided in the Corporate Governance Report which forms part of this Annual Report. NOMINATION AND REMUNERATION COMMITTEE As per the section 178 (1) of the Companies Act, 2013 the Company has constituted Nomination And Remuneration Committee, details of which are given in Corporate Governance report which forms part of annual report. RATIO OF REMUNERATION TO EACH DIRECTOR The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is Annexed as Annexure-1. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms 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. DIRECTORS and KMP In accordance with theClause 170 Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Nalini Vijay Shah (DIN- 00119538) would retire by rotation at the ensuing AGM and being eligible, offers herself for reappointment.There has been no Change in the constitution of Board during the year. INDEPENDENT DIRECTORS AND DECLARATION Mr. MahendraGosaliya, Mr. Dinesh Kamdar and Mr. Kiran Shah have been appointed as the independent director of the Company as per Section 149(10) of the Companies Act, 2013 on 26/09/2014 for a term of 5 (Five)consecutive years on the Board of the Company. However Mr. Dinesh Kamdar ceases to be director with effect from 28th May, 2015 The Board of Directors of the Company hereby confirms that all the Independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013. FAMILIARIZATION PROGRAMME Since all independent directors are associated with the company for more than 5 (Five) years, the company has not conducted familiarization programme for them. AUDITORS AND REPORT THEREON The Auditors, M/s Alpesh Shah& Co, Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of four years from the conclusion of this Annual General Meeting [AGM] till the conclusion of 31st AGM. There are no qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory, and needs no further explanation. Further the Auditors' Report for the financial year ended, 31st March, 2015 is annexed for your kind perusal. SECRETARIAL AUDIT REPORT The Company has appointed M/s. Pinakin Shah & Co., Practicing Company Secretary, Ahmedabad as Secretarial Auditor to conduct audit under section 204 of the Companies Act, 2013. The Secretarial Audit Report for the financial year ended, 31st March, 2015 is annexed herewith for your kind perusal. REMUNERATION POLICY The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company. DEPOSITS The company has not accepted any deposits during the year. Information relating to deposits, covered under Chapter V of the Act is nil. There are no deposits which are not in compliance with the requirements of Chapter V of the Act RELATED PARTY TRANSACTIONS The Company has entered into various Related Parties Transactions as defined under Section 188 of the Companies Act, 2013 with related parties as defined under Section 2 (76) of the said Act. 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 and approval of the Board of Directors was obtained wherever required. Transactions entered with the related parties are attached in form AOC-2 as Annexure-2. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO: (A) Conservation of energy and Technology absorption The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review. (B) Foreign exchange earnings and Outgo There were no foreign exchange earnings and outgo during the year under review. RISK MANAGEMENT Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives: • Provide an overview of the principles of risk management • Explain approach adopted by the Company for risk management • Define the organizational structure for effective risk management • Develop a "risk" culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions. • Identify access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company's human, physical and financial assets. INTERNAL CONTROL SYSTEM The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of the Company are regularly carried out to review the Internal Control Systems. Internal Audit Department has verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS Internal financial control is in place commensurate with the size of the Company CORPORATE SOCIAL RESPONSIBILITY The company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee. ANNUAL 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 Committees. A separate exercise was carried out to evaluate the performance of individual Directors includingthe Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. CORPORATE GOVERNANCE Report on Corporate Governance along with the Certificate of the Auditors, M/s.Pinakin Shah & Co., confirming compliance of conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges forms part of the Board Report. VIGIL MECHANISM As per Section 177(9) and (10) of the Companies Act, 2013, and as per the Clause 49 of the Listing Agreement, the company has established Vigil Mechanism for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee.Company has formulated the present policy for establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its stakeholders, Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company. SHARES a. BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. b. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. c. BONUS SHARES No Bonus Shares were issued during the year under review. d. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS Internal financial control is in place commensurate with the size of the Company. SHARES IN SUSPENSE ACCOUNT i. Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: Nil ii.Number of shareholders who approached issuer for transfer of shares from suspense account during the year: Not Applicable iii. Number of shareholders to whom shares were transferred from suspense account during the year: Not Applicable iv. aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year: Nil v. That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares: Not Applicable SHARES IN UNCLAIMED SUSPENSE ACCOUNT i. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year Nil ii. Number of shareholders who approached the issuer for transfer of shares from the Unclaimed Suspense Account during the year: Not Applicable iii. Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year: Not Applicable iv. Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year: Nil MATERIAL VARIATIONS The reporting on material variations between the projections and the actual utilization/profitability is not applicable. CODE OF CONDUCT The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit. The compliance on declaration of code of Conduct signed by Chairman and Managing Director of the Company is included as a part of this Annual Report. EXTRACT OF ANNUAL RETURN The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed as Annexure-3 herewith for your kind perusal and information. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report should forms part of this Annual Report. ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS No orders were passed by the regulators or courts or Tribunals impacting the going concern status and company's operation in future. ACKNOWLEDGEMENT The Board places on record their appreciation of the support of all stakeholders. For & on behalf of the Board of Director Shri Vijay C Shah DIN:00038062 Chairman & Managing Director Date: 29/07/2015 Place: Ahmedabad |