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Directors Report of Adhiraj Distributors Ltd.

Mar 31, 2015

The Members,

Adhiraj Distributors Limited

The Directors present the 5th Annual Report of your Company along with the Financial Statements for the year ended 31st March, 2015.

Financial Highlights:

Year Ending Year Ending Particulars March, 2015 March, 2014 Amt. in Rs. Amt. in Rs.

Sales 5,24,80,618.47 1,20,28,582.00

Other Income 28,34,680.00 3,11,918.00

Total Income 5,53,15,298.47 1,23,40,500.00

Less: Expenditure 5,40,80,661.24 1,19,42,834.75

Profit/ (Loss) before Interest, depreciation 12,34,637.23 3,97,665.25 and Tax

Less: Interest - -

Less: Depreciation & 91,702.00 9,182.00

Amortization Cost Prafl./ (Losslbefore 1142,935.23 3,88,483.25 Tax

Less: Tax Expense

Current Tax 4,43,542.00 93,531.00

Deferred Tax 10,501.00 -

prom/ (Loss) after 6,88,892.23 2,94,952.25 Tax

Add: Profit/ (Loss) 3,17,967.18 23,014.93 Brought Forward

Less: Prior year Tax

liability - -

Less: Prior year adjustments - -

Amount available for 10,06,859.41 3,17,967.18

Appropriation/ (Loss)

Appropriations:

The Company proposes to retain an amount of Rs. 6,88,892.23 in Profit and Loss Account. Yours directors regret for not recommending dividend on equity shares.

Material changes and commitments after the end of financial year:

There have been no material changes and commitments, if any, affecting the financial position of the Company, which have occurred between the end of the financial year and date of the report.

Issue of Shares

- The Company has not granted any Employees Stock Option.

- The Company has not issued any sweat Equity Shares.

- The Company has not issued any equity shares with differential rights.

Particulars of loans, guarantees or investment:

The Particulars of Loan given, Investment made, Guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the financial statement.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo:

Details of energy conservation is not applicable to the company, no technology has been absorbed or imported by the company and Foreign Exchange earning & outgo is NIL.

Deposits:

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Directors:

As per the provisions of Section 149(1), 161 and other applicable provision under the Companies Act, 2013, the Board appointed Ms. Priti Singh as an additional, Non-Executive, woman Director of the Company on 26th March, 2015. The above appointment was based on the recommendation of the Nomination and Remuneration Committee and is subject to a p p r o v al of the Shareholders of the Company at the forthcoming Annual General Meeting.

As per the provisions of Section 149(1), 161 and other applicable provision under the Companies Act, 2013, the Board appointed Mr. Rohit Garodia as an additional, Non-Executive, and Independent Director of the Company on 17th September, 2014. The above appointment is subject to approval of the Shareholders of the Company at the forthcoming Annual General Meeting.

As per the provisions of Section 149(1), 161 and other applicable provision under the Companies Act, 2013, the Board appointed Mr. Mahesh Kumar as an additional, Non- Executive, and Independent Director of the Company on 17th September, 2014. The above appointment is subject to approval of the Shareholders of the Company at the forthcoming Annual General Meeting.

As per the provisions of the Companies Act, 2013, and the Articles of Association, Mr. Sandip Kumar Agarwal is liable to retire by rotation at the 5th Annual General Meeting. Mr. Sandip Kumar Agarwal has confirmed his eligibility and willingness to accept the office of Directorship of your Company, if appointed. In the opinion of your Directors, Mr. Sandip Kumar Agarwal has the requisite qualifications and experience which would be of value to your Company and would enable him to contribute to the Company in his capacity as the Director of the Company.

The Board recommends that the resolution relating to the re- appointment of Mr. Sandip Kumar Agarwal as Director of your Company be approved.

None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions with the Company, other than salaries, commission, sitting fees.

Declaration given by Independent Directors:

All Independent Directors have given declarations under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Clause 42 of the ITP Listing Agreement.

Familiarisation programme for Independent Directors:

The Company's familiarisation program for Independent Directors provides training at the time of joining to enable them to understand the operations, business and other details of the Company. The Independent Directors are regularly briefed on the developments that are taking place in the Company and its operations, etc.

Number of meetings of the Board:

The Board meets at regular intervals to review the Company's businesses and discuss its strategy and plans. A tentative annual calendar of the meetings is circulated to the Directors in advance to enable them to plan their schedule and to ensure effective participation.

During the year, fifteen board meetings were convened and held. The maximum interval between the meetings did not exceed the period prescribed under the Companies Act, 2013 and the Listing Agreement.

Committees of the Board:

During the year, in accordance with the Companies Act, 2013 and Clause 42 of the ITP Listing Agreement, the Board has constituted its Committees.

Currently, the Board has the following Committees:

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders Relationship Committee

Details of the Committees along with their constitution and other details are provided in the "Report on Corporate Governance".

Directors' Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained, your Directors make the following statements in terms of Section 134(3)^) of the Companies Act, 2013:

(i) That in the preparation of annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(ii) That such accounting policies have been selected and applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2015 and of the profit of the Company for that year;

(iii) That proper and sufficient care has been taken 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 annual financial statements have been prepared on a 'going concern' basis.

(v) That proper internal financial controls are in place and that the financial controls are adequate and are operating effectively.

(vi) That systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and are operating effectively.

Annual Evaluation of Performance by the Board:

Pursuant to the provisions of the Companies Act, 2013 and Listing Agreement, the Board has carried out an evaluations of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee and Nomination and Remuneration Committee. The manner in which the evaluation has been carried out is mentioned in the Corporate Governance Report.

Related Party Transaction:

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 are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

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 preclearance 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 Policy is hosted on Companies Website www.adhiraidistributors.com.

Code ofConduct

The Company has a Code of Conduct which is applicable to directors and management personnel of the Company. The Company believes in conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations.

The Code lays down the standard procedure of business conduct which is expected to be followed by the directors and management personnel in their business dealings and in particular on matters relating integrity in the work place, in business practices and complying with applicable laws etc. The Policy is hosted on Companies Website www.adhiraidistributors.com. A declaration regarding Code of Conduct is signed by the Managing Director of the Company and enclosed in Corporate Governance Report.

Internal Financial Control

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Management Discussion & Analysis Report and Report on Corporate Governance:

(a) As per Clause 42 of the ITP Listing Agreement with the Bombay Stock Exchange Limited, the Corporate Governance Report and the Management Discussion and Analysis Report are annexed and form part of the Directors' Report (Annexures '1' & Annexure '3' respectively).

Certificate dated 30th May, 2015 from our Auditors M/s. A Agarwal & Associates (FRN 326873E), regarding the compliance of conditions of Corporate Governance as stipulated in Clause 42 of the Listing Agreement with the Stock Exchange is annexed to this Report (Annexure '2').

Director's Appointment and Remuneration Policy:

The Board has, on recommendation of the Nomination and Remuneration Committee formulated a policy for selection and appointment of Directors, senior Managements and their

remuneration. The details of the said policy is enclosed as per "Annexure 4".

Extract of Annual Return:

In accordance with Section i34(3)(a) of the Companies Act, 2013, an extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure 5"

Details pertaining to remuneration as required under section 197(12) of the companies act, 2013 read with rule 5(1) of the companies (appointment and remuneration of managerial personnel) rules, 2014.

i. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

% increa Name of Remunerati se in the on of Remu Sl. Director / Director / nerati No. KMP & KMP for the on in Designatio FY 2014-15 the FY n (Rs.) 2014- 15

Srikrishan 1 Churiwala NIL 1,20,000.00 (M.D.) 1

Rachana Kumari 2 (Company 45,000.00 NIL Secretary)2

Swati Sharma 3 (Company 1,28,000.00 NIL Secretary)3

Sitesh 4 Kanodia 70,000,00 NIL (CFO))4

Name of the Director Ratio of KMP & Remune Compariso Designation ration of n of the each Remunerat Director ion of the / to KMP median against the remuner performan ation of ce of the employe company es

Srikrishan Churiwala (M.D.) 11.00

PBT

Rachana Kumari (Company Secretary) 20.38 increase by 194.20 % & PAT

Swati Sharma (Company Secretary)3 1.07 increase by 133.56 %

Sitesh Kanodia (CFO)4 0.58

1 Period of Service - 27.09.2014 to 31.03.2015

2 Period of Service - 01.01.2015 to 31.03.2015

3 Period of Service - 16.06.2014 to 15.02.2015

4 Period of Service - 01.09.2014 to 31.03.2015

ii. The median remuneration of employees of the Company during the financial year was Rs. 1.20 lakhs.

iii. There were 7 permanent employees on the rolls of Company as on March 31, 2015

iv. There is no change in remuneration of Managing Director and performance of the Company increases by 194.20 % to Rs. 11.43 Lacs in 2014-15 ( 3.88 Lacs in 2013-14).

v. The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

vi. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable.

vii. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Corporate Social Responsibility:

Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]:

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

Statutory Auditors:

M/s. A Agarwal & Associates (Firm Registration No. 326873E), Chartered Accountants, Auditors of the Company, retire at the conclusion of 5th Annual General Meeting of the Company and have expressed their willingness to continue as Auditors of the Company. M/s. A Agarwal & Associates (Firm Registration No. 326873E), have conveyed that, if appointed, they would be eligible to act as Auditor of the Company. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and Rules framed thereunder, for re-appointment as Statutory Auditors of the Company.

Your Directors, on recommendation of the Audit Committee, seek approval of the Shareholders, for re-appointment of M/s. A Agarwal & Associates (Firm Registration No. 326873E), as the Statutory Auditors of the Company, from the conclusion of the forthcoming Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

Secretarial Auditors:

In accordance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Rupa Gupta, Company Secretaries, (ACS No. 29332 and CP No. 11691) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2014-15 is set out in the "Annexure 6" to this Report.

Risk Management Policy

Pursuant to section 134(3) (n) of the Companies Act, 2013, the Board of directors of the Company has adopted a Risk management Policy of the Company. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

Acknowledgements:

Your Directors wish to place on record their sincere appreciation for the continuous support and co-operation received from customers, dealers, suppliers, financial institutions and others in successfully conducting the Company's business operations. Your Directors also wish to place on record their deep sense of appreciation for the commitment and dedicated service of the Company's employees. Your Directors also acknowledge with gratitude the encouragement and support extended by our valued shareholders.

On behalf of the Board of Directors,

Sd/- Mr. Srikrishan Churiwala Sd/- Mr. Sandip Kumar Agarwal

 
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