| 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
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