Directors' Report to the Members Your Directors have pleasure in presenting the Twenty-sixth Annual Report and Audited Accounts of your Company for the year ended 31st March 2015. Business Review During the year under report, your Company generated revenue of Rs. 30,823.30 lakhs, an increase of 26% as compared to the previous year and the net profit of Rs. 805.90 lakhs, as compared to the previous year's net loss of Rs. 1,450.26 lakhs. Power Generation Your Company has been earning regular income from the business of power generation from windmills commissioned in Jaisalmer, Rajasthan and Chitradurga, Karnataka. Total Income earned out of Wind Power Generation was Rs. 145.60 lakhs. Dividend The Board has recommended Dividend Rs. 0.50/- per equity share i.e. @ 25% on Equity Shares for the year ended 31 March 2015. The Dividend @ Rs. 0.50/- per equity share will be paid to eligible members, after the approval by the members at the forthcoming annual general meeting. The total cash outflow on account of dividend payments will be Rs. 216.44 lakhs and on the dividend distribution tax is Rs. 44.06 lakhs. Transfer To Reserves The Company proposes to retain the balance amount in the profit and loss account. Share Capital The paid up equity capital as on 31st March 2015 was Rs. 865.76 lakhs. During the period under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. Finance During the year under review, the Company has availed financial assistance from Bank of Baroda and The Saraswat Co-operative Bank and the Company is enjoying working capital facilities from Dena Bank. Total Secured Loan outstanding as of 31s March 2015 was Rs. 33,515.41 lakhs. The Company is regular in its repayment obligation with its banks. Your Company has received 'ICRA A+' as credit rating for long term loans, which indicates adequate degree of safety in respect of bank loan profile of the Company and 'ICRA A1' as credit rating for short term loans. Particulars of Loans, Guarantees or Investments The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements. Deposits Your Company has not accepted any deposits within the measnt ing of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. As of 31 March 2015 there are no fixed deposits outstanding. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The Company has made the necessery disclosures in this Report in terms of Section 134 (3) of the Companies Act, 2013 read with Rules 8 of the Companies (Accounts) Rules, 2014. The Company has always strived to optimize energy consumption. The Company at present uses the conservative sources of energy such as purchase of electricty from state electricty boards and use of generator. During the year under review, your Company has not made any significant investment on energy conservation equipments. As your Company has not entered into technical collaboaration with any entity, there are no particulars relating to technology absorption. There is no expenditure incurred on the research & development activities of the Company during the year under review. Foreign Exchange Earnings and Outgo During the year under review, there were no foreign exchange earnings and the foreign exchange outgo amounted to Rs. 2,682.98 lakhs. Particulars of Contracts or Arrangements with Related Parties All related party transactions which were entered into during the financial year were on an arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The statement that the transactions are at arm's length and in the ordinary course of business is supported by a Certificate from the Managing Director. All Related Party Transactions are placed before the Audit Committee for their approval and to the Board, as and when required. The transactions entered into pursuant to the omnibus approval so granted are reviewed by the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website, i.e. http://www.sanghvicranes.com/media/SML_RPT.pdf. Pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, and prescribed in Form AOC - 2 of Companies (Accounts) Rules, 2014, are appended as "Annexure E" to this report. Insurance The assets of the Company including buildings, sheds, machinery, cranes, etc. are adequately insured. Material changes and commitments affecting the financial position of the Company The Company has a plan of Capex of Rs. 38,000 lakhs during the financial year 2015-16. There are no other material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report. Directors Mrs. Mina C. Sanghvi & Mr. C. P. Sanghvi are liable to retire by rotation and being eligible offer themselves for re-appointment. 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. Based on the recommendndation of Nomination and Remuneration Committee, the Board of Directors of the Company in its meeting held on 22nd May 2015, re-appoinndted Mr. Sham D Kajale, as Executive Director & CFO of the Company, for a term of five years with effect from 02nd September 2015. A proposal for his re-appointment as the Executive Director & CFO of the Company and remuneration payable to him is being placed before the Members of the Company for their approval at the ensuing Annual General Meeting. Mr. Sanjay Asher an Independent Director resthigned with effect from 30th September 2014. Mr. Gary Ng, Non Executive Director resigned with effect from 20th February 2015. The Board hereby places on record its sincerest thanks and gratitude for the invaluable contribution made by Mr. Sanjay Asher and Mr. Gary Ng towards the growth and development of the company during their tenure as a Director of the Company. Familiarisation Programmes For Independent Directors The Company has framed various programmes to familiarize the 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 etc. The details of such programmes have been disclosed on the Company's website at the following link: http://www.sanghvicranes.com/media/SML_FPFID.pdf Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 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 is annexed herewith as "Annexure A". Number of Meetings of the Board A calendar of meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. Directors' Responsibility Statement In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) 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 a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review. iii) 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. iv) The Directors have prepared the annual accounts on a going concern basis. 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Internal Control Systems and their adequacy The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & also to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. Auditors a. Statutory Auditors B S R & Co. LLP, Chartered Accountants, Pune, (Firm Registration Number101248W/W100022 allotted by the Institute of Chartered Accountants of India), who arethe Statutory Auditors of the Company, hold office until the conclusion of thethirtieth Annual General Meeting of the Company, to be held in the year 2019, subject to ratification of their appointment at every Annual General Meeting. The resolution seeking Member's ratification for the appointment of M/s. B S R & Co. LLP, Chartered Accountants, Pune, is included in item no. 5 of the Notice convening the Annual General Meeting. b. 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 and amendments and modifications thereof, the Company has appointed M/s. Kanj & Associates, Practising Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure B". Comments on Auditors' Report Statutory Auditors: There are no qualifications, reservations or adverse remarks or disclaimers made by B S R & Co. LLP, Statutory Auditors. Secretarial Audit: The delay in finling of forms was on technical grounds and the Company has ensured to file the same within stipuleted time. Subsidiary Companies The Company does not have any subsidiary. Extract Of The Annual Return Pursuant to the provisions of the Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Managemenstt and Administration) Rules, 2014, the extract of Annual return of the Company for the financial year ended on 31 March 2015 is provided in the "Annexure C" to the Directors' Report. Corporate Governance And Management Discussion & Analysis Reports In accordance with the Guidelines of the Securities and Exchange Board of India and Clause 49 of the Listing Agreement with The Stock Exchanges and the provisions of the Companies Act, 2013, Report on Corporate Governance with Auditor's certificate, Management Discussion & Analysis Report are annexed and form part of annual report. Your Company is fully compliant with the Corporate Governance guidelines, as laid out in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management) have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The details of the Code of Conduct are furnished in the Corporate Governance Report attached to this Report. The Managing Director has given a certificate of compliance with the Code of Conduct, which forms part of the Corporate Governance Report, as required under Clause 49 of the Listing Agreement. The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the Compliance, as required under Clause 49 of the Listing Agreement. The Certificate in this regard is attached to the Corporate Governance Report. The Managing Director / Chief Financial Officer (CEO/CFO) certification as required under Clause 41 of the Listing Agreement is attached to the Corporate Governance Report. Related Party disclosures/transactions are detailed in note no. 30 of the Notes to the financial statements. Risk Management Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the Company has constituted a Risk Management Committee. The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels. Key Managerial Personnel At the Board Meeting held on 30th May 2014, Mr. C. P. Sanghvi, Managing Director, Mr. Sham D. Kajale, Executive Director & CFO and Mr. Rajesh P. Likhite, Company Secretary were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Particulars of Employees In terms of the provisions of Section 197(12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the "Annexure D" of the Directors' Report. Vigil Mechanism / Whistle Blower Policy Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same is hosted on the website of the Company at following link:http:// www.sanghvicranes.com/media/SML vigil mechanism.pdf During the year, nil complaints were received. Brief details about the policy are provided in the Corporate Governance Report attached herewith. 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. Corporate Social Responsibility The Board of Directors of the Company have constituted the Corporate Social Responsibility Committee (CSR Committee), comprising of, Mrs. Mina C. Sanghvi- Chairman, Mr. Dara Damania and Mr. S Padmanabhan, as members of the Committee as per the requirement of the Section 135 of stthe Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. As on 31st March 2015, the Committee comprises three Directors. The said Committee has formulated the CSR Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR activities. Additionally, the CSR Policy has been uploaded on the website of the Company at http://www.sanghvicranes.com/media/ CORPORATESOCIALRESPONSBILITYCOMMITTEE.pdf. The Company has incurred Net Loss of Rs. 1,450.26 lakhs in the Financial Year 2013-14 and has incurred a loss of Rs. 1,468.42 lakhs during the period 1st April, 2014 to 30th September 2014. In view of the same, the board has decided to give more priority for repayment of bank loans including reduction in high interest bearing loans. The board has given more thrust to make the company debt free. Therefore the company did not incur any expenditure on CSR activities in the financial year 2014-15. As a noble corporates, the Company will definitely pursue to make up the expenditure on CSR in the coming years. Secretarial Standards The Company will comply with the Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI), as and when they are made effective. 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 requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committee(s) (ICC) has been set up across all its location in India to redress complaints received regarding sexual harassment. The cases reported to such Committee(s) are investigated by the respective Committee(s) members. No case of sexual harassment and discriminatory employment was reported during the financial year under review. Personnel Your Directors express their deep appreciation for the dedicated and sincere services rendered by the employees at all levels. Employee relations have been cordial. Acknowledgements Your Directors would like to place on record their gratitude and appreciation to the banks, esteemed clients and valued investors for their continued co-operation and support. Your Directors also take this opportunity to acknowledge the hard work, dedicated efforts made by the employees of the Company at all levels for their contribution to the success achieved by the Company. For & on behalf of the Board of Directors For Sanghvi Movers Limited Chairman & Managing Director (DIN:00116599) Pune, 12th August 2015 Registered Office: Survey No. 92, Tathawade, Taluka Mulshi, Pune 411033 Tel No. +91 (20) 66744700 Fax No: +91 (20) 66744724 Website: www.sanghvicranes.co Chandrakant Sanghvi |