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Directors Report of SSK Lifestyles Ltd.

Mar 31, 2015

Dear Members,

Your Directors have the pleasure of presenting this 23rd Annual Report along with the Audited Financial Statements and the Auditor's Report thereon for the Financial Year ended 31st March 2015.

FINANCIAL PERFORMANCE:

(Rs. in '000)

Particulars 2014-15 2013-14

Gross Total Income 7773 3878

Other Income 337 65

Profit before financial expenses, depreciation and taxation (-)5262 (-) 5102

Financial Expenses 0 0

Depreciation 2007 1781

Profit Before Exceptional Items and Taxation (-)3255 (-) 3321

Exceptional Items 1193 0

Profit Before Taxation (-) 4448 (-) 3321

Provision of Taxes 0 0

Profit After Taxation (-) 4448 (-) 3321

DIVIDEND:

Your Directors do not recommend any dividend for the financial year due to accumulated losses.

DIVERSIFICATION OF BUSINESS:

Members are aware that during the year under review, your Company has discontinued to carry on the business of PVC Pipes and Fittings by complete diversification of its business operations by venturing into trading in lifestyle products. Accordingly, your Company has disposed-off the assets pertaining the discontinued business after obtaining your approval through postal ballot process conducted on 2nd January 2015.

CHANGE IN NAME OF THE COMPANY:

Members are aware that during the year under review, with effect from 29th October 2014 the name of your Company has been changed to 'SSK Lifestyles Limited' to adequately reflect the businesses to be carried on by the Company.

CHANGE IN THE PAID UP SHARE CAPITAL OF THE COMPANY:

Members are aware that during the year under review, the paid-up capital of your Company was increased from Rs.3.019 Crores to Rs.7.119 Crores on account of issue and allotment of 41,00,000 equity shares to non-promoter category on preferential basis to augment the resources of the Company for working capital, general corporate purposes and for proposed new objects of the Company.

FIXED DEPOSITS:

The Company has neither accepted nor renewed any deposits falling within the provisions of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 from the its member and public during the Financial Year.

DIRECTORS:

Mr. P Mastan Rao , Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends for his re-appointment.

Mr. Y V Krishna Rao and Mr. M V Sridhar Kumar, who were co-opted as Additional Directors on 24th November 2014, were appointed as Independent Directors for a period of 5 years through postal ballot process conducted on 2nd January 2015.

During the year under review, Mr. B V Bhaskara Krishna and Mr. J Nagabhushana Rao resigned as Directors of the Company with effect from November 24, 2014.

Further, Mr. K Ratnakara Rao has been re-appointed as Whole-Time Director of the Company for a period of Three years w.e.f 14th August, 2015 subject to approval of the shareholders at the forthcoming Annual General Meeting.

During the year under review, the Company has reconstituted the Board Committees which are given in the Corporate Governance Report.

BOARD AND COMMITTEE MEETINGS:

The details of Board and Committee meetings held during the year are given in the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures;

ii. accounting policies have been selected and applied consistently and judgments 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 at March 31,2015 and of the loss of the Company for the year ended on that date;

iii. proper and sufficient care have been taken for the maintenance of accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company, for preventing & detecting fraud and/or other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN 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, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the other Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the other Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

STATUTORY AUDITORS:

Members are aware that M/s. Ramasamy Koteswara Rao & Co. (FRN: 010396S), Chartered Accountants, Hyderabad have been appointed as statutory auditors through postal ballot process conducted on 2nd January 2015 to fill casual vacancy caused by resignation of M/s. Sanjeeva Rao & Associates as statutory auditors. M/s. Ramasamy Koteswara Rao & Co., Chartered Accountants will hold office until the conclusion of the ensuing Annual General Meeting and eligible for re-appointment in accordance with the provisions of the Companies Act, 2013 and they have conveyed their willingness and eligibility for re-appointment. The Board recommends their re-appointment for a period of 5 years subject to the ratification of the Shareholders at each Annual General Meeting.

Reply to Auditor Observations:

Point No. vii (b) of the Annexure to Audit Report:

The Board of Directors of your Company inform you that the Sales Tax Department has issued a notice towards interest arrears on Sales Tax for an amount of Rs. 40.32 Lakhs for which the Board thinks inappropriate. Hence, the Board has made a provision for that amount subject to arriving final amount. Further, there are disputes with regard to sales tax arrears for an amount of Rs.6.92 Lakhs and the Company is approaching the Department to arrive final amount and it will be settled in due course.

The Board inform you that the Deputy Commissioner of Income Tax, levied penalty of Rs.7,78,320/- U/s 271 (1)(c) for the Assessment Year 1996-97 and the Company won the case in both Commissioner (Appeals) and Income Tax Tribunal against the department and the department went for Appeal in A.P. High Court and the same is pending in High Court of Andhra Pradesh & Telangana.

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, the Company has appointed M/s. P. S. Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as 'Annexure I' to this Report.

INTERNAL AUDITOR:

The Company has appointed M/s. Nekkanti Srinivasu & Co.(FRN:008801S), Chartered Accountants, Hyderabad as Internal Auditors of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS:

Aspects of Management Discussion and Analysis are enclosed as 'Annexure II' to this report

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Group. The details of the Policy are explained in the Corporate Governance Report.

RISK MANAGEMENT FRAMEWORK:

The Company has a robust internal business management framework to identify, evaluate business risks and opportunities which seeks to minimize adverse impact on the business objectives and enhance the Company's business prospects.

The Company has an Internal Control System, commensurate with the size and scale of its operations.

RELATED PARTY TRANSACTIONS:

During the year, the Company had not entered into any Contract/Arrangement/Transactions with related parties which would be considered material in accordance with the policy of the Company on materiality of related party transactions. Hence, the disclosure under Form AOC-2 is not applicable.

The Company has developed a Policy on Related Party T ransactions in accordance with provisions of all applicable laws and Clause 49 of the Listing Agreement for the purpose of identification and monitoring of such transactions. The Policy on dealing with related party transactions is available on the website of the Company www.ssklifestyles.com

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given any loans or given guarantees or made investments in any other company.

PARTICULARS OF EMPLOYEES:

There are no employees drawing remuneration exceeding the limits as specified under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in 'Annexure III'.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND 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

A. Conservation of Energy:

Being a wholesale and retail trading company and not involved in any industrial or manufacturing activities, the Company's activities involve very low energy consumption and has no particulars to report regarding conservation of energy. However, efforts are made to further reduce energy consumption.

B. Technology Absorption : NIL

C. Foreign Exchange Earnings & Outgo : (In Rs. Lakhs)

2014-15 2013-14

Foreign Exchange earnings Nil Nil

Foreign Exchange outgo Nil Nil

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT 9 as required under Section 92 of the Companies Act, 2013, is annexed herewith as 'Annexure IV' to this report.

CORPORATE GOVERNANCE:

Report on Corporate Governance including Auditor's Certificate on Compliance with the code of Corporate Governance under Clause 49 of the listing agreement is enclosed as 'Annexure V' to this report

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

None of the orders passed by the Any Regulator / Courts which would impact the future operations / going concern status of the Company.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to record their appreciation for the continuous support and co-operation extended by the customers and bankers. The Directors also acknowledge the confidence reposed by the investors and shareholders in the Company.

By Order of the Board

Hyderabad, 31st August 2015 SD/- K Ratnakara Rao Chairman of the Meeting


Mar 31, 2014

Dear Members,

FINANCIAL PERFORMANCE:

Particulars 2013-14 2012-13

Gross Total Income 3878 2248

Other Income 65 3

Profit before financial expenses, depreciation and taxation (-)5102 (-) 2736

Financial Expenses 0 0

Depreciation 1781 2077

Profit Befo re Exceptional Items and Taxation (-) 3321 (-)4813

Exceptional Items 0 2259

Profit Before Taxation (-) 3321 (-) 2554

Provision of Taxes 0 0

Profit After Taxation (-) 3321 (-) 2554



DIVIDEND:

Your Directors do not recommend any dividend for the financial year due to accumulated losses.

DIRECTORS:

RENAMING OF BOARD COMMITTEES:

DIRECTORS'' RESPONSIBILITY STATEMENT:

The Directors of your Company hereby report:

(iv) That the directors have prepared the annual accounts on a going concern basis.

AUDITORS:

Reply to Auditor Observations:

Point No. 9 (b) (i) of the Annexure to Audit Report:

Point No. 9 (b) (ii) of the Annexure to Audit Report:

PARTICULARS OF EMPLOYEES:

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN

Particulars 2013-14 2012-13

Conservation of Energy

- Electricity

- Purchased Units in Lakhs 0.96 0.45

-Total Rupees in Lakhs 6.25 3.00

-Rate per Unit 6.51 6.67

- Own Generation 0 0

- Consumption per Unit of Production (in Kgs) 0.26 0.466

- Power consumption per Kg (in Units) 3.88 2.15

Research and Development NA NA

Technology Absorption NA NA

Foreign Exchange Earnings and Outgo NIL NIL



SECRETARIAL COMPLIANCE CERTIFICATE:

Certificate from the Practicing Company Secretary as stipulated in Section 383A of the Companies Act, 1956 read with the Companies (Compliance Certificate) Rules, 2001 and attached to the Directors'' Report form a part of this Annual Report.

CORPORATE GOVERNANCE:

A report on Corporate Governance, in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges is set out separately for the information of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis is set out separately for the information of the shareholders.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to record their appreciation for the continuous support and co-operation extended by the customers and bankers. The Directors also acknowledge the confidence reposed by the investors and shareholders in the Company.

By Order of the Board

Hyderabad, 1st September 2014 Sd/- K Ratnakara Rao

 
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