DIRECTOR'S REPORT Dear Members, We are pleased to present the report on our business and operations for the year ended 31st March, 2015. a. Review of operations and affairs of the Company: During the year under review, the Company has earned a profit before Interest, Depreciation & Tax of Rs. 130.55 lacs as compared to previous year Rs. 237.19 lacs. The net profit for the year under review has been Rs.75.63 lacs as compared to the previous year net profit Rs. 161.18 lacs. The Company is into the Business of providing financial assistance, as a part of treasury operation to corporate Houses and HNIs as well as investing its surplus funds in Equity Market and the company is also into the business of Infra-project. SEBI vide its Ex-parte Ad- Interim Order No. WTM/RKA/ ISD/ 162 /2014 dated 19th December, 2014 issued under sections 11(1), 11(4) And 11B of The Securities and Exchange Board of India Act, 1992 in the matter of First Financial Services Ltd has barred your company from accessing the Securities Market till further directions, thus cutting off the Investment wing of the company, which has caused fall in the revenues of the Company. Your company is taking necessary steps to vacate the said order so as far as it related to your Company. Your company is constantly making endeavors to in tapping the new opportunities. b. Dividend: Your Directors do not recommend any dividend for the year under review, and has decided to retain the surplus with the company for furthering the growth of the Company. c. Transfer to Reserves: Out of the Net Profit of Rs. 75.63 lacs for the FY 2014-2015, Rs, 15.13 lacs has been transferred to Statutory Reserve A/c in compliance with the Section 45 IC (i) of the Reserve Bank Act, 1934 and balance is retained as Surplus. d. Deposits: During the year under review, your company has not accepted any deposits from the public within the meaning of section 76 of the Companies Act 2013 and the rules there under. There are no public deposits, which are pending for repayment. e. Particulars of contracts or arrangements made with related parties: The company has not entered in to any contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, during the financial year under review. The Policy on Related Party Transaction is available on our website www.globalinfrafin.com, www.gifl.in g. Management's Discussion and Analysis: Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is appended as Annexure I to this report. h. Director's Responsibility Statement: Pursuant to Section 134(3)(c) and Section 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 accounts, the applicable accounting standards have been followed and there are no material departures; (ii) 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 the financial year and of the profit and loss of the Company for that period; (iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (erstwhile Companies Act, 1956) 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 have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; (vi) 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. i. Recommendations of the Audit Committee: During the year under review, all the recommendations made by the Audit Committee were accepted by the Board. j. Major Change in the Share Capital of the Company: The Board of Director at the Board meeting held on 17th November, 2014 allotted 2,38,55,300 Equity Shares of Re. 1/- each as Bonus Shares to the existing Shareholders of the Company in the ratio of 1 Equity Shares for every 10 Equity shares held by the members as on the record date (i.e, 17th November, 2014) in accordance with the approval for Bonus received from the Shareholders of the company at the 19th Annual General Meeting held on 29th September, 2014 and subsequent necessary approvals from BSE Limited. The Said Bonus shares were listed and permitted to trade on the BSE Limited with effect from Wednesday, November 26, 2014. 2. Human Resource Management: To ensure good human resources management at Global Infratech & Finance Limited, we focus on all aspects of the employee lifecycle. This provides a holistic experience for the employee as well. During their tenure at the Company, employees are motivated through various skill-development, engagement and volunteering programs. All the while, we create effective dialogs through our communication channels to ensure that the feedback reach the relevant teams, including the leadership. a. Particulars of employees: The table containing the details of remuneration of Directors and Employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure II to this report. There are no employees who were in receipt of remuneration in excess of the ceiling prescribed in the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company currently do not provide any Employee Stock Option Scheme/Employee Stock Purchase Scheme to its employees. b. Key Managerial Personnel: i. Managing Director or Chief Executive Officer or Manager and in their absence, a Whole-Time Director: > Mr. Pravin Tukaram Sawant (DIN: 00701127) was the Managing director of the Company from 29th September, 2011 and resigned from the Directorship of the company on 12th February, 2015. > Mr. Aallan Paul (DIN: 06639742) is the Whole Time Director of the Company w.e.f., 01st October, 2014. ii. Company Secretary: > During the year under review, the Board did not find a suitable candidate for the position of Company Secretary. The Board is in the Process of identifying a suitable candidate for the position of Company Secretary. iii. Chief Financial Officer: > Mr. Renganathan Raman has been appointed as the CFO of the Company w.e.f., 28th May, 2014. 3. Corporate Governance: Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders' expectations. At Global Infratech & Finance Limited, it is imperative that our company affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of our stakeholders. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement is appended as Annexure III to this report. a. Auditors' certificate on corporate governance: As required by Clause 49 of the Listing Agreement, the auditors' certificate on corporate governance is appended as Annexure IV to this report. b. Compliance Department: Mr. Aallan Paul (DIN : 06639742), Executive Director of the Company was appointed as the Compliance Officer of the Company at the Board Meeting held on 24th March, 2015. The Board is in the Process of identifying a suitable candidate for the position of Company Secretary cum Compliance Officer. The compliance department of the company is responsible for independently ensuring that the operating and business units comply with regulatory and internal guidelines. New instructions/guidelines issued by the regulatory authorities were disseminated across the company to ensure that the business and business units operate within the boundaries set by the regulators and that compliance risks are suitably monitored and mitigated in course of their activities & processes. c. Information on the Board of Directors of the Company: During the year under review, following changes took place in the Composition of Board of Directors of the Company; (i) The Board of Directors at their Meeting held on 28th May, 2014 had appointed Mr. Sambasivaiyer Swaminathan (DIN: 02800432) as Additional cum Independent Director of the Company w.e.f., 28th May, 2014 (ii) The Shareholders at the Annual General Meeting of the Company held on 26th September, 2014 approved the appointment of; a. Mr. Aallan Paul (DIN : 06639742) as Executive, Whole time Director of the Company w.e.f. 1st October 2014 b. Mr. Sambasivaiyer Swaminathan (DIN: 02800432) as Independent Director of the Company to hold office for a term of five consecutive years till 27th May, 2019. c. Mr. Ashok Bothra (DIN: 01734863) as the Independent Director of the Company to hold office for a term of five consecutive years till 31st March, 2019. (iii) The Board of Directors of the Company at the Meeting held on 20th December, 2014 approved the following; a. Appointment of Mr Abdul Rahman Amannulla (DIN: 06591320) as the Additional Director cum Independent Director w.e.f., 20th December, 2014 to hold office till the conclusion of the ensuing Annual General Meeting. b. Taking on record the resignation of Mr. Ashok Bothra (DIN: 01734863) from the directorship of the company w.e.f., 04th December, 2014. (iv) The Board of Directors of the Company at the Meeting held on 29th December, 2014 had appointed Mr Baskaran Sathya Prakash (DIN: 01786634) as the Additional cum Independent Director w.e.f. 29th December, 2014 to hold office till the conclusion of the ensuing Annual General Meeting. (v) The Board of Directors of the Company at the Meeting held on 12th February, 2015 approved the following: a. Appointment of Mrs. Aliyar Riya (DIN: 07027295) as the Additional Cum Non- Executive Director, Non Independent Director w.e.f. 12th February, 2015 to hold office till the conclusion of the ensuing Annual General Meeting. b. Taking on record the resignation of Mr. Pravin Tukaram Sawant (DIN: 00701127), from the directorship of the company w.e.f., 12th February, 2015. (vi) The Board of Directors of the Company at the Meeting held on 24th March, 2015 accepted the resignation of Mr. Abdul Rahman Amannulla (DIN: 06591320) from the directorship of the Company w.e.f 24th March, 2015 In compliance with the Companies Act, 2013 the following directors are proposed to be appointed as Director/Independent Directors/Executive Director of the Company by the approval of the Share Holders of the Company; (i) Mr Baskaran Sathya Prakash (DIN: 01786634) be regularised as the Independent Director of the Company to hold office from 29th December, 2014 till 28th December, 2019 under the provision of Section 149 of the Companies Act, 2013 and rules thereof. (ii) Ms. Aliyar Riya (DIN: 07027295) be regularised as the Director of the Company. d. Board Diversity: The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website www.globalinfrafin.com, www.gifl.in e. Details with regards to meeting of Board of Directors of the Company: During the FY 2014-2015, 17 (Seventeen) meetings of the Board of Directors of the Company were held. For further details with regards to the meeting of Board of Directors, please refer to the Corporate Governance Report which forms part of this Report. f. Policy on directors' appointment and remuneration: The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on 31st March, 2015, the Board consist of 4 Members, 1 of whom is an Executive Director and 1 of whom is an Non-Executive Director and the 2 are Independent Directors. The Board periodically evaluates the need for change in its composition and size. The Policy of the Company on Director's appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of director and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board, is appended as Annexure V to this report. We affirm that the remuneration paid to the director is as per the terms laid out in the said policy. g. Declaration by Independent Directors: The Company has received necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. h. Training of Independent Directors: Every new Independent Director at the time of appointment is issued a detailed Appointment Letter incorporating the role, duties and responsibilities, remuneration and performance evaluation process, Code of Conduct and obligations on disclosures. Further every new Independent Director is provided with copy of latest Annual Report, the Code of Conduct, the Code of Conduct for Internal Procedures and to Regulate, Monitor and Report Trading by Insiders ("Code of Conduct - PIT") and the Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information (the "Fair Practice Code"), Tentative Schedule of upcoming Board and Committee meetings. The Company through its Executive Directors / Key Managerial Personnel conduct programs / presentations periodically to familiarize the Independent Directors with the strategy, operations and functions of the Company. Thus such programs / presentations provides an opportunity to the Independent Directors to interact with the senior leadership team of the Company and help them to understand the Company's strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management and such other areas as may arise from time to time. The Policy on the Familiarization Programme for Independent Directors is available on our website www.globalinfrafin.com www.gifl.in i. Board's Committees: Currently, the Board has three committees: the audit committee, the nomination and remuneration committee, and the stakeholders relationship committee. All committees are appropriately constituted. A detailed note on the Board and its committees, including the details on the dates of Committee Meetings is provided under the Corporate Governance report section in this Annual Report. The composition of the committees and compliances, as per the applicable provisions of the Act and Rules, are as follows: j. Board Evaluation: The board of directors has carried out an annual evaluation of its "own performance", "Board committees" and "individual directors" pursuant to the section 134(3) of the Companies Act, 2013. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole was evaluated, The same was discussed in the board meeting that followed the meeting of the independent Directors at which the report as submitted by the Independent Directors was taken on record and discussed. k. Listing: The equity shares of Global Infratech & Finance Limited (Scrip Code: 531463) are listed at BSE Limited. Your Company paid the Listing Fees to the BSE Limited for the year 2014-15 as well as 201516 in terms of listing agreement entered with the said Stock Exchange. Further is it informed that the Company in FY 2013-2014 had applied for de-listing from Ludhiana Stock Exchange Limited and the approval for De-Listing was awaited, during this period, SEBI vide its Order No. WTM/RKA /MRD/166/2014 dated 30th December, 2014 has De-recognised the Ludhiana Stock Exchange Limited w.e.f., the date of the order, thus the securities of the company is deemed to be delisted from the Ludhiana Stock Exchange limited w.e.f., 30th November, 2014. j. Board Evaluation: The board of directors has carried out an annual evaluation of its "own performance", "Board committees" and "individual directors" pursuant to the section 134(3) of the Companies Act, 2013. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole was evaluated, The same was discussed in the board meeting that followed the meeting of the independent Directors at which the report as submitted by the Independent Directors was taken on record and discussed. k. Listing: The equity shares of Global Infratech & Finance Limited (Scrip Code: 531463) are listed at BSE Limited. Your Company paid the Listing Fees to the BSE Limited for the year 2014-15 as well as 201516 in terms of listing agreement entered with the said Stock Exchange. Further is it informed that the Company in FY 2013-2014 had applied for de-listing from Ludhiana Stock Exchange Limited and the approval for De-Listing was awaited, during this period, SEBI vide its Order No. WTM/RKA /MRD/166/2014 dated 30th December, 2014 has De-recognised the Ludhiana Stock Exchange Limited w.e.f., the date of the order, thus the securities of the company is deemed to be delisted from the Ludhiana Stock Exchange limited w.e.f., 30th November, 2014. 4. Auditors: a. Statutory Auditor: Pursuant to the provisions of section 139, 140, 141 and 142 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules 2014 as may be applicable, M/s. Pradeep Gupta, Chartered Accountants, (Membership No. 048979) was appointed as the auditors of the company to hold office from the conclusion of the 19th Annual General Meeting till the conclusion of the 24th Annual General Meeting, subject to the ratification at every general meeting. The Board of Directors at the meeting held on 12th August, 2015 took on record the written unwillingness letter received from M/s. Pradeep Gupta, Chartered Accountants, Mumbai (Membership No. 048979), stating his unwillingness to continue as the Statutory Auditors of the company from the conclusion of the 20th Annual General Meeting, The Board of Directors of the Company on the recommendation of the Audit Committee, recommends that appointment of M/s. M Jhunjhunwala & Associates, Chartered Accountants (Firm Registration No. 328750E) as the Statutory Auditors of the company to hold office from the conclusion of this the 20th Annual General Meeting till the conclusion of the 25th Annual General Meeting of the Company to be held in the year 2020, subject to ratification of its appointment at every AGM. b. Secretarial Auditors: M/s. G.S.Bhide & Associates, Company Secretaries, were appointed to conduct the Secretarial Audit of the Company for the FY 2014-2015, as required under the Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the FY 20142015 is appended as Annexure VI to this report c. Comments of the Board on the qualification/reservation/adverse remarks/disclosure made: (i) by the Statutory Auditors in the Audit Report: The Auditors' report do not contain any qualifications, reservations or adverse remarks (ii) by the Secretarial Auditors in the Secretarial Audit Report: i. The Company has not appointed whole time Company Secretary during the year as required under Section 203 of Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ii. Non-Compliance related to timely formation of Remuneration and Nomination Committee was observed during the year as the requirement was applicable effective from 1st October 2014. The Board with respect to the above mentioned qualification/reservation/adverse remarks, herewith submits the following; i. the Board is in the Process of identifying a suitable candidate for the position of Company Secretary ii. The Nomination and Remuneration Committee was formulated on 02nd January, 2015. d. Internal Financial Control The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. e. Risk Management: The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Company has identified various risks and also has mitigation plans for each risk identified. The Risk Management Policy of the Company is available on our website www.globalinfrafin.com www.gifl.in f. Vigil Mechanism: The Company has established a mechanism for Director's and employee's to report their concerns relating to fraud, malpractice or any other activity or event which is against the interest of the Company. The same has been disclosed in the corporate governance report under the heading Whistle Blower Policy, which forms part of the directors' report. The Whistle Blower Policy is available on our website www.globalinfrafin.com www.gifl.in g. Statement on Material Subsidiary: The Company currently do not have any Material Subsidiary. The Policy on Identification of Material Subsidiaries is available on our website www.globalinfrafin.com www.gifl.in 5. Corporate Social Responsibility: The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of Section 135 of the Companies Act, 2013 is not applicable to the company. a. Particulars on conservation of energy, research and development, technology absorption and foreign exchange earnings and outgo: (i) Energy Conservation: Conservation of energy continues to receive increased emphasis and steps are being taken to reduce the consumption of energy at all levels. The Company has taken steps to conserve energy in its office use, consequent to which energy consumption had been minimized. No additional Proposals/ Investments were made to conserve energy. Since the Company has not carried on industrial activities, disclosure regarding impact of measures on cost of production of goods, total energy consumption, etc, are not applicable. (ii) Foreign Exchange Earnings and Outgo: The Company has not earned or spent any foreign exchange during the year under review. (iii) Research and Development & Technology Absorption: The Company has not adopted any technology for its business and hence no reporting is required to be furnished under this heading. The Company will adopt necessary technology as and when required in the furtherance of the business. 6. Others: a. Extract of Annual Return: In accordance with Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure VII to this Report. b. Significant and Material Orders: SEBI vide its Ex-parte Ad- Interim Order No. WTM/RKA/ ISD/ 162 /2014 dated 19th December, 2014 issued under sections 11(1), 11(4) And 11B of The Securities and Exchange Board of India Act, 1992 in the matter of First Financial Services Ltd has barred your company from accessing the Securities Market till further directions. Your company is taking necessary steps to vacate the said order so as far as it related to your Company. c. 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 the requirement of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act 2013. All the employees (permanent, Contractual, temporary, Trainees) are covered under this policy. During the year under review, no complaints were received falling under the category of Sexual Harassment of Women. d. Other Disclosures: Your Directors state that no disclosure or reporting is required in respect to the following items as there were no transactions on these items during the year under review: (i) Issue of equity shares with differential rights as to dividend, voting, or otherwise. (ii) Issue of shares (including sweat equity shares) to employees of the company under any scheme. (iii) Redemption of Preference Shares and/ or Debentures. 7. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels but for whose hard work, and support, your company's achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the company. By Order of the Board of Directors For GLOBAL INFRATECH & FINANCE LIMITED AALLAN PAUL Executive Director (DIN: 06639742) ALIYAR RIYA (DIN: 07027295) Director Date: 12th August, 2015 Place: Chennai |