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Directors Report of Sarthak Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting 31st Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

The performance of the Company for the financial year ended on 31st March, 2015 is summarized below:

(Rs. In Lacs)

Particulars 2014-15 2013-14

(01.04.2014- (01.04.2013- 31.03.2015) 31.03.2014)

Sales and other Income 9,996.29 11,733.68

Gross Profit/ (Loss) 102.53 (1,081.39)

Depreciation 60.96 51.00

Profit/ (Loss) before tax 41.57 (1,132.39)

Provision for Taxation for the year 14.43 137.65

Profit/ (Loss) after Taxation 27.14 (1,270.04)

Balance brought forward from previous (411.68) 858.36 year

Adjustment of Depreciation as per (25.01) - schedule II of the Companies Act, 2013

Amount available for appropriation (409.55) (411.68)

APPROPRIATION

Amount Carried to Balance sheet (409.55) (411.68)

DIVIDEND

Your Directors have decided to plough back the profits to the operational fund requirement of the Company. Hence, no dividend has been recommended for the year under review.

AMOUNT TRANSFERRED TO RESERVE

During the year, the Company has not transferred any amount in General Reserve.

OPERATIONS

During the year under review, Sales and Other Income of the Company stood at Rs. 9,996.29 Lacs showing decreasing trend over the previous year but Profit before tax has increased and stood at Rs. 102.53 Lacs as compared to previous year Loss Rs. 1081.39 Lacs and Net Profit also increased and stood at Rs. 27.14 Lacs as compared to previous year net loss Rs. 1270.04 Lacs. Your Directors are hopeful for better performance in the coming years.

DEPOSITS

The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SHARE CAPITAL

During the year under review, the Company has not raised any paid up share capital. The Paid up Equity Share Capital as at 31st March 2015 stood at Rs. 6,96,88,500/-. The Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares. As on 31st March 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

INSURANCE

All properties and insurable interests of the Company including Building and Plant & Machinery have been adequately insured.

HUMAN RESOURCE & INDUSTRIAL RELATIONS

Industrial relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the co-operation extended by all the employees in maintaining cordial relations.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

DIRECTORS' RESPONSIBILITIES STATEMENT

To the best of their knowledge and belief, your Directors make the following statements in terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013:

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

ii) That the Directors have 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 financial year and of the profit and loss of the Company for that period;

iii) That 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) That the Directors have prepared the annual accounts on a going concern basis;

v) That the Directors have laid down internal financial controls, which are adequate and are operating effectively;

vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Sartajsing Chhabra, Director of the Company retires by rotation in accordance with the provisions of the Articles of Association of the Company and being eligible offer himself for re- appointment.

Mr. Virendra Kumar Gupta has been ceased from the Directorship of the Company due to sad demise on 22.05.2014. The Board appreciates the services rendered by him during his association with your Company.

Mrs. Deepika Arora was appointed as an Additional Director by the Board of the Company with effect from 16th March, 2015 and holds office upto the date of this Annual General Meeting. Your Company has received a notice in writing proposing her candidature for the office of Director of the Company liable to retire by rotation.

During the year under review, the members approved the appointments of Mr. Udesh Dassani and Mr. Vijay Rathi, as Independent Directors who are not liable to retire by rotation and Mr. Yogender Mohan Sharma as a Whole-time Director of the Company.

The Board designated Mr. Amit Jain, Company Secretary as Key Managerial Personnel of the Company and appointed Mr. Vijay Agrawal as Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. 01.07.2014 under Section 203 of the Companies Act, 2013 and rules made thereunder. Mr. Vijay Agrawal has resigned from the post of CFO w.e.f. 01.03.2015 due to his pre-occupations and Mr. Kailash Kumar Agarwal has been appointed by the Board as Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. 11.04.2015.

During the year, declarations received from the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. Board appraised the same and found that none of the directors is disqualified holding office as director.

Details of the proposal for appointment/ re-appointment of Directors are mentioned in the Notice of the Annual General Meeting.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The Company does not have any subsidiary or joint venture or associate Company during the year.

NUMBER OF MEETINGS OF THE BOARD

The Board met 10 times during the financial year. The details of which are given in the Corporate Governance Report that forms part of this annual report. The intervening gap between any two Meetings was within the period prescribed under the Companies Act, 2013.

CODE OF CONDUCT

The Company has laid down a code of conduct for all Board members and Senior Management and Independent Directors of the Company. All the Board members including Independent Directors and Senior Management Personnel have affirmed compliance with the code of conduct. Declaration on adherence to the code of conduct is forming part of the Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS

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.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 Committees. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. 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 who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

None of Independent Directors are due for re-appointment.

FAMILIARIZATION PROGRAMME

Details of the programmes for familiarization of 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. are available on the website of the Company at the link: http://www.sarthakindustries.com/images/Familiarisation%20Programme-SIL .pdf

INTERNAL FINANCIAL CONTROLS

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not given any loans or guarantees or made investment beyond the limits mentioned under the provisions of Section 186 of the Companies Act, 2013.

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 the business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://www.sarthakindustries.com/images/Related Party Policy.pdf

MATERIAL CHANGES AND COMMITMENT BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are given in the "Annexure A" forming part of this report.

PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES

None of the employee has received remuneration exceeding the limit as stated in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosure pertaining to remuneration and other details 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, are given in the "Annexure B" forming part of this report.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The policy on Directors' Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is appended as "Annexure C" forming part of this report.

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism which also incorporates a Whistle Blower Policy in line with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement to report genuine concerns or grievances. The Vigil Mechanism/ Whistle Blower Policy may be accessed on the Company's website i.e. www.sarthakindustries.com.

RISK MANAGEMENT

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the Board of the Company has formed a Risk Management Committee to frame, implement and monitor the Risk Management Plan for the Company. The details of risk have been covered in the Management Discussion and Analysis Report forming part of the Boards report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

AUDITORS & AUDITORS REPORT

The Auditors M/s. Ashok Khasgiwala & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 and they are not disqualified for such appointment.

The notes referred to by the Auditors in their Report are self explanatory and hence do not require any explanation.

Further, there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-section (12) of Section 143 of Companies Act, 2013.

COST AUDIT

The Board has appointed M/s A. Goyal & Co., Cost Accountants, (Membership No. 13212) as Cost Auditors of the Company for conducting the audit of cost records maintained by the Company for the financial year 2014-15.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s Ajit Jain & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year 2014-15 is annexed herewith as "Annexure D" forming part of this report.

There are no adverse comments, qualifications or reservations or adverse remarks in the Secretarial Audit Report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulator or courts or tribunals impacting the going concern status of the Company and future operations.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure E" forming part of this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under the policy. There was no complaint received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the employees of the Company for their enormous personal efforts as well as their collective contribution during the year. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions and all other business associates for their continuous support given by them to the Company and their confidence in the management.

For and on behalf of the For and on behalf of the Board of Directors Board of Directors

YOGENDER MOHAN SHARMA SARTAJSING CHHABRA Whole-time Director Director DIN: 03644480 DIN:05342507

Place: Indore Dated: 14th August, 2015




Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting 30th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS

Particulars 2013-14 2012-13 (01.04.2013-31.03.2014) (01.04.2012- 31.03.2013)

Sales and other Income 11,733.68 11,134.24

Gross Profit/ (Loss) (1,081.39) 152.7

Depreciation 51.00 57.54

Profit/ (Loss) before tax (1,132.39) 95.16

Provision for Taxation for the year 137.65 30.01

Profit/ (Loss) after Taxation (1,270.04) 65.15

Balance brought forward from previous year 858.36 793.21

Amount available for appropriation (411.68) 858.36

APPROPRIATION

Amount Carried to Balance sheet (411.68) 858.36



DIVIDEND

Your Directors have decided to plough back the profits to the operational fund requirement of the Company. Hence, no Dividend has been recommended for the year under review.

OPERATIONS

During the year under review, Sales and Other Income of the Company stood at Rs. 11,733.68 Lacs showing increasing trend over the previous year but Profit before tax has decreased and stood at Loss Rs. 1132.39 Lacs as compared to previous year profit Rs. 95.16 Lacs and Net Profit also decreased and stood at Loss Rs. 1270.05 Lacs as compared to previous year net profit Rs. 65.15 Lacs. Your Directors are hopeful for better performance in the coming years.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

INSURANCE

All properties and insurable interests of the Company including Building and Plant & Machinery have been adequately insured.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as per section 217(1)(e) read with Companies (Disclosures of Particulars in the report of Board of Directors) Rules, 1988 are given in the ''Annexure A'' forming part of this report.

PARTICULARS OF EMPLOYEES

During the year under review, there was no employee covered under the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended till date.

HUMAN RESOURCE & INDUSTRIAL RELATIONS

Industrial relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the co-operation extended by all employees in maintaining cordial relations.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreements with the stock exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors'' certificate regarding compliance of conditions of corporate governance are made a part of the annual report.

DIRECTOR''S RESPONSIBILITY STATEMENT

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statement for the period under review. Pursuant to section 217(2AA) of the Companies Act, 1956, and in respect of the annual accounts for the period under review, the directors hereby confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) appropriate accounting policies have been selected and applied 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 or loss of the Company for that period;

(iii) proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities have been taken to the best of their knowledge and ability;

(iv) the annual accounts have been prepared on a "going concern basis".

DIRECTORS

Mr. Sartajsing Chhabra, Director of the Company retires by rotation in accordance with the provisions of the Articles of Association of the Company and being eligible offer himself for reappointment.

Mr. Virendra Kumar Gupta has been ceased from the Directorship of the Company due to sad demise on 22.05.2014. The Board appreciates the services rendered by him during his association with your Company.

Mr. Yogender Mohan Sharma was appointed as an Additional cum Whole-time Director by the Board of the Company with effect from 15th July, 2014 subject to approval of shareholders and holds office upto the date of this Annual General Meeting. Your Company has received a notice in writing from a member proposing his candidature for the office of whole-time director. The Board of Directors recommends his appointment.

Pursuant to the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, Mr. Vijay Rathi and Mr. Udesh Dassani are proposed to be appointed as Independent Directors of the Company for five consecutive years for a term upto 31st March, 2019. They qualify to be an Independent Director pursuant to the provisions of Section 149(6) of the Companies Act, 2013.

Details of the proposal for appointment/ re-appointment of Directors are mentioned in the Notice of the Annual General Meeting.

AUDITORS & AUDITORS REPORT

M/s. Ashok Khasgiwala & Co., Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re- appointment. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and also that they are not otherwise disqualified within the meaning of sub section (3) of section 226 of the Companies Act, 1956, for such appointment.

Regarding the qualification marked by the auditors in their auditor''s report, the same are self explanatory and therefore do not call for any further comments.

COST AUDIT

Your Company has appointed M/s A. Goyal & Co., Cost Accountants, (Firm Registration no. 101308) as Cost Auditor of the year 2013-14, with the consent of the Central Government, for the audit of cost accounts maintained by the Company.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the employees of the Company for their enormous personal efforts as well as their collective contribution during the year. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions and all other business associates for their continuous support given by them to the Company and their confidence in the management.

For and on behalf of the Board of For and on behalf of the Directors Board of Directors

YOGENDER MOHAN SHARMA SARTAJSING CHHABRA Director Director DIN: 03644480 DIN: 05342507

Place: Indore Dated: 14th August, 2014


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting 29th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars 2012-13 2011-12

(01.04.2012-31.03.2013) (01.07.11-31.03.12)

Sales and other Income 11,134.24 12,571.14

Gross Profit 152.7 133.32

Depreciation 57.54 48.19

Profit before tax 95.16 85.13

Provision for Taxation for the year 30.01 32.51

Profit after Taxation 65.15 52.62

Balance brought forward from previous year 793.21 740.59

Amount available for appropriation 858.36 793.21

APPROPRIATION

Amount Carried to Balance sheet 858.36 793.21



DIVIDEND

Your Directors have decided to plough back the profits to the operational fund requirement of the Company. Hence, no Dividend has been recommended for the year under review.

OPERATIONS

During the year under review, Sales and Other Income of the Company stood at Rs. 11,134.24 Lacs showing decreasing trend over the previous year but Profit before tax has increased by 11.78% at Rs. 95.16 Lacs and Net Profit also increased by 23.81% at Rs. 65.15 as compared to previous year. Your Directors are hopeful that in the coming years, the profitability of the Company will increase.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year under review.

INSURANCE

All properties and insurable interests of the Company including Building and Plant & Machinery have been adequately insured.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as per section 217(l)(e) read with Companies (Disclosures of Particulars in the report of Board of Directors) Rules, 1988 are given in the annexure forming part of this report.

PARTICULARS OF EMPLOYEES

During the year under review, there was no employee covered under the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended till date.

HUMAN RESOURCE & INDUSTRIAL RELATIONS

Industrial relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the co-operation extended by all employees in maintaining cordial relations.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreements with the stock exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors'' certificate regarding compliance of conditions of corporate governance are made a part of the annual report.

DIRECTOR''S RESPONSIBILITY STATEMENT

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statement for the period under review. Pursuant to section 217(2AA) of the Companies Act, 1956, and in respect of the annual accounts for the period under review, the directors hereby confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) appropriate accounting policies have been selected and applied 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 or loss of the Company for that period;

(iii) proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities have been taken to the best of their knowledge and ability;

(iv) the annual accounts have been prepared on a "going concern basis".

DIRECTORS

Mr. Vijay Rathi, Director of the Company retires by rotation in accordance with the provisions of Articles of Association of the Company and being eligible offer himself for re-appointment.

Mr. Sanjay Sharma has resigned from the Directorship of the Company w.e.f. 30.08.2012. The Board appreciates the services rendered by him during his association with your Company.

Mr. Sartajsing Chhabra, who was appointed by the Board on 30.08.2012 as an additional director of the Company, has been appointed as a Director of the Company by the members of the Company in the Annual General Meeting held on 29.09.2012.

The Board of Directors at their meeting held on 12th November, 2012 re-appointed Mr. Virendra Kumar Gupta as an Executive Director of the Company for a period of 5 years with effect from 02nd January, 2013. The Board of Directors recommends his re-appointment.

AUDITORS & AUDITORS REPORT

M/s. Ashok Khasgiwala & Co., Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming annual general meeting and are eligible for re- appointment. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and also that they are not otherwise disqualified within the meaning of sub section (3) of section 226 of the Companies Act, 1956, for such appointment.

Regarding the qualification marked by the auditors in their auditor''s report, the same are self explanatory and therefore do not call for any further comments.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the employees of the Company for their enormous personal efforts as well as their collective contribution during the year. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions and all other business associates for their continuous support given by them to the Company and their confidence in the management.



For and on behalf of the Board of Directors



Place: Indore (V.K. GUPTA)

Dated: 31st August, 2013 Executive Director

 
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