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ABC India

BSE: 520123|ISIN: INE125D01011|SECTOR: Transport & Logistics
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Directors Report Year End : Mar '16    Mar 15

DIRECTORS'' REPORT

Dear Shareholders,

The Directors take pleasure in presenting the 43rd Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2016.

Financial Results (Rs, In Lacs)

Particulars

FY 2015-16

FY 2014-15

Amount

Amount

Turnover

13341.75

15252.44

Other Income

77.56

107.42

Total Revenue

13419.31

15359.86

Earnings Before Interest, Depreciation, Taxation and Amortization (EBIDTA)

682.40

1301.25

Interest and other Finance Cost

524.77

772.22

Depreciation & Amortization

456.98

644.69

Profit /(Loss) before Taxation (PBT)

(299.34)

(115.66)

Tax including Deferred Tax

(62.17)

(128.22)

Profit after Taxation (PAT)

(237.17)

12.56

Profit brought forward from previous year

1371.35

1362.04

Tax Adjustment for earlier years

-

(3.25)

Profit available for appropriation carried to Balance Sheet

1134.18

1371.35

OPERATIONS :

During the year under review, your Company has achieved a Total Revenue of Rs, 13,419.31 lakhs which is 12.63% lower over the corresponding previous financial year total revenue of Rs, 15,359.86 lakhs. The Company has achieved an EBIDTA of Rs, 682.40 lakhs as compared with previous year figure of Rs, 1,301.25 lakhs. The Loss after Tax worked out to Rs, 237.17 lakhs as compared to profit in the previous year of Rs, 12.56 lakhs.

OUTLOOK :

The industrial growth of the Company did not improve at the desired level as envisaged during the year under review. The Company is in the business of transportation and logistics and due to non- improvement in the industrial activity the Company was not able to procure the business at its desired level. The profitability of the Company was affected due to at one hand stagnancy of the off take and on the other hand increase in the cost at various levels of the Company. Besides, due to low demand for logistics services, there was fierce competition in the market making lower realizations for the services rendered by the Company. Therefore the Company could neither achieve any volume growth nor desired profitability. At the same time, the Company had to incur interest on financed assets and depreciation thereon.

The Company is making sustained marketing efforts for its services in infrastructure sector & power sector which is expected to see revival, over the next few years. The Company has also undertaken cost control and reduction to improve its profitability.

Accordingly, the performance of the Company in current year as well as coming years shall continue to be highly dependent upon revival of infrastructure sector, power sector, industrial project and procurement of orders.

To overcome the situation, the Company has diversified its business activities and had started a new segment viz. Construction Division which would contribute both in top line & bottom line of the Company.

DIVIDEND

Due to loss during the year under review, the Board of Directors of the Company could not recommend any dividend on the Equity Shares of the Company for the financial year ended 31st March, 2016.

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve during the financial year ended 31st March, 2016.

HUMAN RESOURCES

Your Company treats its “human resources” as one of its most important assets.

Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. Your Company has continuously adopted structures that help attract best external talent and provide internal talent to higher roles and responsibilities.

Your Company has a adequate pool of trained and competent human resources which is highly capable to meet the challenges of growing quality perspective and complex logistics requirement of the customers. In view of increased competition, the human resources of the company are able and proved to deliver specialized services of desired quality meet the competition and to satisfy customer requirements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) Appointments:

There was no appointment of any Director during the financial year 2015-16.

ii) Retirement by Rotation:

Pursuant to the provisions of Section 152(6) and other applicable provisions, of the Companies Act, 2013 Dr. Ashok Kumar Agarwal (DIN 01237294), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offered himself for re-appointment.

iii) Appointment of Whole time- Key Managerial Personnel (KMP):

Pursuant to the provisions of Section 203 and other applicable provisions of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Rule 8(5)(iii) of Companies (Accounts) Rules, 2014 the following personnel continued to be Whole time Key Managerial Personnel of the Company within the meaning of the said section.

a) Mr. Ashish Agarwal - Managing Director.

b) Mr. Sushil Pransukhka - Chief Financial Officer.

c) Mr. Sanjay Agarwal - Company Secretary & Compliance Officer.

None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013. The Directors have also made necessary disclosures to the extent as required under provisions of section 184(1) of the Companies Act, 2013.

INDEPENDENT DIRECTOR’S DECLARATION

Your Company had received the declaration of Independence u/s 149(7) of the Companies Act, 2013 from all the Independent directors of your Company specifying that they meet the criteria of independence as per Section 149(6) of the Companies Act, 2013.

AUDITORS AND THEIR REPORTS (i) Statutory Auditor:

The Statutory Auditors M/s Agarwal Kejriwal & Co., Chartered Accountants, holds office upto the conclusion of the Annual General Meeting (AGM) to be held for the FY 2016-17, subject to ratification by the shareholders in every AGM. Accordingly, the Board on recommendation of Audit committee has proposed for ratification of their appointment in the office of Statutory Auditors of the Company for the FY 2016-17.

The Auditors report does not contain any qualification. Notes to Accounts and Auditors remarks in their Report are self-explanatory and hence do not call for any further explanation.

(ii) Cost Auditors:

Pursuant to section 148 of the Companies Act, 2013, the Board of Directors on recommendation of the Audit Committee had re-appointed M/s. Debabrota Banerjee & Associates (Registration No. 102336), Cost Accountants, as the Cost Auditors of the Company for the financial year 2016-17. The Company has received consent and confirmation of eligibility for their re-appointment as the Cost Auditors of the Company for the year 2016-17.

(iii) Secretarial Auditor:

The Board had re-appointed Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary, as the Secretarial Auditor of the Company to carry out the Secretarial Audit for the year 2015-16 under the provisions of section 204 of the Companies Act, 2013. The report of the Secretarial Auditor is enclosed as “Annexure A” - MR-3 to this Board’s Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(3) (c) & 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation related to material departures;

2. Appropriate 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 31st March, 2016 and of the loss of the Company for the year ended on 31st March, 2016;

3. Proper and sufficient care has been taken, to the best of their knowledge and ability, 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;

4. The annual accounts have been prepared on a going concern basis;

5. The Directors have laid down internal financial Controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

DEPOSITS

The Company has not accepted any Deposits during the year, no deposits remained unpaid or unclaimed as at the end of the year and there was no default in repayment of deposits or payment of interest thereon during the year.

DETAILS RELATING TO REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The particulars and information of the Directors/employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 of your Company is attached as “Annexure-B” to this report.

None of the employees of the Company were in receipt of the remuneration exceeding limits pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information related to conservation of energy, Research & Development, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 and Rule 8 (3) of Companies (Accounts) Rules, 2014 are as follows:

(a) Conservation of energy

The Company’s operation involves no energy consumption.

(b) Technology absorption

i. The Company does not have any R & D Division and Company’s Operations does not require this type of establishment.

ii. Technology absorption, adoption and innovation: The Company has not imported any technology due to its nature of operation.

(c) Foreign exchange Earnings and Outgo

During the year, the total foreign exchange earned was Rs, 22,52,590/- (Previous Year Rs, 10,48,868/-) and the total foreign exchange used was Rs, 44,98,665/- (Previous Year Rs, 38,32,523/-).

INTERNAL AUDIT & CONTROLS

The Company continues to engage Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant and material order has been passed by the Regulators, Courts, Tribunals impacting the going concern status and Company’s operations in future.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls as required under section 134(5)(e) of the Companies Act, 2013. During the year under review, such controls were tested and no reportable material weakness in the formulation or operations were observed.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 1992, your Company has already adopted the Code of Conduct for prevention of Insider Trading. Further, in accordance with the provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company at their meeting held on May 26, 2015 have approved and adopted the code of practices and procedure for fair disclosure of Unpublished Price Sensitive Information and formulated the code of conduct of the Company.

DISCLOSURES AS PER APPLICABLE ACT, LISTING AGREEMENT/ SEBI (LODR) REGULATIONS, 2015:

i) Related Party Transactions:

All transactions entered with related parties during the FY 2015-16 are on arm’s length basis and were in the ordinary course of business and hence not falling under the provisions of Section 188 of the Companies Act, 2013 except sale of a property which is not in ordinary course of business. There have been no other materially significant related party transactions with the Company’s Promoters, Directors and others as defined in section 2(76) of the Companies Act, 2013, the listing agreement and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 which may have potential conflict with the interest of the Company at large. The required disclosure in Form AOC-2 in respect of the sale of the property is given and marked as “Annexure-C” to this Board’s Report.

The requisite disclosures of the related party transactions are given in the notes to accounts. The Company has also formulated a policy on dealing with the Related Party Transactions and necessary approval of the audit committee and Board of directors were taken wherever required in accordance with the policy.

ii) Number of Board Meetings:

The Board of Directors met 4 (Four) times in the FY 2015-16. The Details of the Board meeting and attendance of the Directors are provided in the Corporate Governance Report, attached as Annexure to this Board’s Report.

iii) Composition of Audit Committee:

The Board has constituted the Audit Committee under the Chairmanship of Mr. Debasis Sengupta. Complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Board’s Report.

iv) Extracts of Annual Return:

The details forming part of the extract of the Annual Return in Form No. MGT-9 as required under section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached as “Annexure - D” to this report.

v) Risk Analysis:

The Company has in place a mechanism to inform the Board members about the Risk assessment and mitigation plans and periodical reviews to ensure that the critical risks are controlled by the executive management.

vi) Loans, Guarantees and Investments:

The Company has not provided any loans, given any guarantees or made any investments under Section 186 of the Companies Act, 2013 during the FY 2015-16.

vii) Post Balance Sheet events:

There is 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 relates and the date of this report.

viii) Subsidiaries, Associates or Joint Ventures:

Your Company does not have any subsidiaries, associates or joint ventures.

ix) Evaluation of the Board’s Performance:

During the year under review, the Board, in compliance with the Companies Act, 2013 and Listing Agreement / applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015, has continued to adopt formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board, as a whole and the Chairman, who were evaluated on parameters such as their participation, contribution at the meetings and otherwise, independent judgments, safeguarding of minority shareholders interest, etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non Independent Directors were carried out by the Independent Directors in their separate meeting.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

x) Nomination, Remuneration and Evaluation Policy:

The Company on recommendation of its Nomination & Remuneration Committee has laid down a Nomination, Remuneration and Evaluation Policy, in compliance with the provisions of the Companies Act, 2013 read with the Rules made therein and the Listing Agreement with the stock exchanges (as amended from time to time). This Policy is formulated to provide a framework and set standards in relation to the followings and details on the same are given in the Corporate Governance Report, attached as Annexure to this Board’s Report:

a. Criteria for appointment and removal of Directors, Key Managerial Personnel (KMP) and Senior Management Executives of the Company.

b. Remuneration payable to the Directors, KMPs and Senior Management Executives.

c. Evaluation of the performance of the Directors.

d. Criteria for determining qualifications, positive attributes and independence of a Director.

ix) Vigil Mechanism (Whistle Blower Policy):

By virtue of Whistle Blower Policy, the Directors and employees of the Company are encouraged to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of the Company and its stakeholders in any way. The Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of Directors or employees or any other person who avails the mechanism from reprisals or victimization, for whistle blowing in good faith.

Details of establishment of the Vigil Mechanism have been uploaded on the Company’s website: www.abcindia.com and also set out in the Corporate Governance Report attached as Annexure to this Board’s Report.

COMPANY’S WEBSITE

The website of your Company, www.abcindia.com has been designed to present the Company’s businesses up-front on the home page. The site carries a comprehensive database of information of all the services rendered including the Financial Results of your Company, Shareholding pattern, Corporate profile, details of Board Committees, Corporate Policies and business activities of your Company. All the mandatory information and disclosures as per the requirements of the Companies Act, 2013 and Companies Rules 2014 and as per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 has been uploaded.

CORPORATE GOVERNANCE

Your Company has practiced sound Corporate Governance and takes necessary actions at appropriate times for enhancing and meeting stakeholders’ expectations while continuing to comply with the mandatory provisions of Corporate Governance. Your Company has complied with the requirements of Clause 49 of the Listing Agreement / applicable Regulations of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as issued by Securities and Exchange Board of India and as amended from time to time. Your Company has given its deliberations to provide all the information in the Directors Report and the Corporate Governance Report as per the requirements of the Companies Act, 2013 and the Listing Agreement entered by the Company with the Stock Exchanges, as a matter of prudence and good governance.

A Report on Corporate Governance along with a certificate from Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary regarding compliance of conditions of Corporate Governance and certification by CEO i.e. the Managing Director of the Company and CFO are given in “Annexure- E, F & G” to this report.

CODE OF CONDUCT

The Code of Conduct for Directors, KMPs and Senior Executive of the Company is already in force and the same has been placed on the Company’s website: www.abcindia.com.

All Board Members, KMPs and members of Senior Management have confirmed compliance with the code of conduct. A declaration to this effect has been signed by Mr. Ashish Agarwal, Managing Director is given as “Annexure H” to this Report.

MANAGEMENT DISCUSSIONS & ANALYSIS REPORT

A report on Management Discussion & Analysis is given as “Annexure I” to this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

LISTING OF SECURITIES IN STOCK EXCHANGES

The shares of the Company are presently listed at BSE Ltd. and The Calcutta Stock Exchange Ltd. The Company is registered with both NSDL & CDSL for holding the shares in dematerialized form and open for trading. The Company has paid Listing Fees to both the Stock Exchange and the depositories.

CAUTIONARY NOTE

The statements forming part of the Directors’ Report may contain certain forward looking statements within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation to all the employees for their commendable teamwork, exemplary professionalism and enthusiastic contribution during the year.

For and on behalf of the Board of Directors

Vijay Kumar Jain Ashish Agarwal

Place : Kolkata Director Managing Director

Dated : 12th November, 2016 DIN : 00491871 DIN : 00351824

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