sterling holiday financial services ltd Directors report

TO SHAREHOLDERS

To the Members,

The Directors have great pleasure in presenting their 26^th Report along with the audited financial statement for the financial year ended March 31,2017.

FINANCIAL RESULTS

The financial results of the Company for the year ended 31st March, 2017 are summarised below:

SI. No.	Particulars	Year Ended 31.03.2017	Year Ended 31.03.2016
		Rs,	Rs.
i.	Profit / (Loss) Before Depreciation & Tax	(9,47,738)	(3,29,439)
ii.	Less: Depreciation	15,884	19,800
iii.	Profit / (Loss)Before Tax	(9,63,622)	(3,49,239)
iv.	Profit/(Loss) After Tax	(9,63,622)	(3,49,239)

Financial Statements have been prepared in accordance with the prudential norms prescribed by the RBI for Non-Banking Financial Companies.

PERFORMANCE OF THE COMPANY

During the year, the Company has incurred loss of Rs.9.64 Lakhs. The Board of Directors expect better performance in its operations in the ensuing financial years.

BUSINESS PROSPECTS

The Company is looking for new business opportunities and is exploring all possible avenues to increase its operations and profitability.

DIVIDEND

Due to non-availability of profits during the financial year, your Directors do not recommend any dividend for thefinancialyear2016-2017.

SHARECAPITAL

During the year, your Company has not made any allotment, accordingly there is no change in the share capital of the Company.

TRANSFER TO RESERVES

The Company has incurred loss and has carried the losses to Profit & Loss Account and hence no transfer to General Reserve was made during the Year.

FINANCE

Cash and cash equivalent as at March 31,2017 amounted to Rs.20,658/-.

DEPOSITS

The total amount of fixed deposits from public outstanding and unclaimed as at 31st March, 2017, was Rs.8,77,743/-.

(a) Accepted during the year	NIL
(b) Remained unpaid or unclaimed as at the end of the year	Rs.8,77,743
(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved:	No deposits have been accepted by the Company during the year and hence there does not arise any default during the year.
i.As at 1st April, 2016	NIL
ii. Maximum during April 2016 to March 2017	NIL
iii. As at 31st March, 2017	NIL
(d) Details of deposits which are not in compliance with the requirements of Chapter V of the Act	NIL

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year the Company has not given any loans. The outstanding loans and advances which includes a sum of Rs.216.49 lakhs (Rs.216.92 lakhs) advanced to certain companies out of which a sum of Rs. 116.58 lakhs (Rs. 117.01 lakhs) is to a subsidiary company.

Particulars of investments covered under Section 186 form part of the notes on financial statements provided in this Annual Report. The Company has not made fresh investments during the year.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board has not appointed any directors during the financial year. Neither any of the Directors has resigned during the financial year.

Re-appointments

As per provisions of the Companies Act, 2013, Mrs. Anusuya Chandrasekaran is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. The Board of Directors recommends her re-appointment.

Declaration by Independent Directors

The Company has received declarations from all its Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2016 in respect of the financial year ended March 31,2Q17.

BOARD MEETINGS HELD DURING THE FINANCIAL YEAR

The Board of the Company met 5 (Five) times during the last financial year on the following dates: 30.05.2016, 13.08.2016,03.09.2016,14.11.2016 and 14.02.2017. The intervening gap between the Meetings was within the period prescribed underthe Companies Act, 2013.

BOARD COMMITTEES

Currently the Board has three committees; the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. The Composition of the Committees and their meeting dates are given below:

Name of the Committee	Composition	Details of Meetings held during the year
Audit Committee	Comprises of three Non-Executive and Independent Directors and Managing Director.	Four meetings were held during the year on the following dates:-
	The Chairman of the Committee isIndependent	• 30th May, 2016
	Director, Mr.G.Sundaram.	• 13th August, 2016
		• 14th November, 2016
		• 14th February, 2017
Nomination and Remuneration Committee	Comprises of three Non-Executive and Independent Directors and Managing Director. The Chairman of the Committee is Independent Director, Mr.K.Purushothaman.	Two meetings were held during the year on the following date:
		•13th August, 2016
		•14th February, 2017
Stakeholders Relationship Committee	Comprises of two Non Executive and Independent Directors and two Executive Directors. The Chairman of the Committee is Independent Director, Mr. M. Namasivayam.	Two meetings were held during the year on following dates:-
		•13th August, 2016
		14 th February, 2017

Details of recommendations of Audit Committee which were not accepted by the board along with reasons

The Audit Committee generally make certain recommendations to the Board of Directors of the Company during their meetings held to consider any financial results (Unaudited and Audited) and such other matters placed before the Audit Committee as per the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016 from time to time. During the year the Board of Directors has considered all the recommendations made by the Audit Committee and has accepted and carried on all the recommendations suggested by the Committee to its satisfaction. Hence there are no recommendations unaccepted by the Board of Directors of the Company during the year under review.

DETAILS OF POLICIES DEVELOPED BY THE COMPANY

(i) Nomination and Remuneration Policy

The Company has formulated the Nomination and Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016 as amended from time to time. The objective of this policy is to ensure:

• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance with short and long-term performance objectives appropriate to the working of the Company and its goals.

This policy is being governed by the Nomination and Remuneration Committee comprising of three members of the Board, all of whom are Non-Executive and Independent Directors. The policy lays down the standards to be followed by the Nomination and Remuneration Committee with respect to the appointment, remuneration and evaluation of Directors and Key Management Personnel.

(ii) Board Diversity

The Company recognizes and values the importance of a diverse board as part of its corporate governance and success. The Company believes that a truly diverse Board will leverage differences in ideas, knowledge, thought, perspective, experience, skill sets, age, ethnicity, religion and gender which will go a long way in retaining its competitive advantage. The Board has on the recommendation of the Nomination and Remuneration Committee, adopted a Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

(iii) Whistle-Blower Policy-Vigil Mechanism

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism provides a channel to the Employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or Policy. The mechanism provides for adequate safeguards against victimization of employees and directors to avail of the mechanism and also provide for direct access to the Chairman of the Board/Chairman of the Audit Committee in exceptional cases.

In line with the statutory requirements, the Company has formulated a Whistle Blower Policy / Vigil Mechanism, which covers malpractices and events which have taken place / suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, violation of Company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is or is likely to be affected and formally reported by whjstle blowers concerning its employees.

The Managing Director is responsible for the administration, interpretation, application and review of this policy. The Managing Director is also empowered to bring about necessary changes to this policy, if required at any stage with the concurrence of the Audit Committee. The mechanism also provides for access to the Chairman of the Audit Committee in required circumstances.

EVALUATION OF BOARD, COMMITTEE AND DIRECTORS

The evaluation has been done.

TRAINING AND FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company has conducted familiarization programme during the year.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THEYEAR.

During the year, no*company has become or ceased to be the subsidiary, joint venture or associate company. Whereas, the detailed report on Subsidiaries and Associate Companies is attached as Annexure -1 in Form AOC-1 and forms part of this report.

AUDITORS Financial Auditors

Existing Auditor M/s. P.Chandrasekar, Chartered Accountants (Firm Registration Number 000580S), Chartered Accountants audit period expires in this Annual General Meeting, and pursuant to the recommendations by Audit Committee, the Board has decided to appoint M/s. R.Subramanian and Company LLP, Chartered Accountants (Firm Registration Number 004137S/S200041) as the auditors of the Company to hold office till the conclusion of Thirty First AGM of the Company scheduled to be held in the calendar year 2022, subject to ratification of the appointment by the members at every AGM by means of ordinary resolution to be held after this AGM. The Company has received eligibility letter from the Auditors in this regard and Board took the note of the same. The Board recommends the appointment of M/s. R.Subramanian and Company LLP as auditors of the Company.

Explanation to Statutory Auditors remarks

With reference to the observations made by the Auditors in their report, your Directors wish to explain and clarify the position hereunder:

1. In respect of advances aggregating to Rs.216.49 lakhs towards investment in shares in certain companies including subsidiary company, the Company is considering all the proposed investments as long-term investments. In the opinion of the Directors, no provision is therefore considered necessary and wherever possible, steps are being taken to recover the amounts.

2. In respect of investments in quoted and unquoted shares, the investments are long term in nature and hence valued at cost. Hence no provision fordiminution in value is considered necessary.

3. The Company has initiated legal action for recovery of its dues and is confident of recovery. Hence, provisioning has not been considered necessary to the extent required as per RBI guidelines.

4. The observation on non provisioning of interest on deposits is self explanatory.

5. In view of the current financial position of M/s. Thomas Cook (India) Limited and its plan to refurbishing the existing resorts and completion of new Resorts your Company is confident in realizing the amount invested in Sterling Happy Vista Timeshare units allotted by them in settlement of Hire Purchase facilities extended to them.

6. The Company is planning to revive the business and is taking steps to improve its profitability in the ensuing years.

Secretarial Auditor

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. S. Dhanapal & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2016-2017 is annexed herewith as marked as Annexure - 2 and forms part of this report.

Explanation to Secretarial Auditors Remarks

The Company does not have any operations and hence has not appointed a Company Secretary and Internal Auditor. Once the operational performance of the Company improves, it will appoint Company Secretary and Internal Auditor.

Formal evaluation of Board by Independent Director and training programme for Independent Directors were organised by the Company.

PARTICULARS OF EMPLOYEES AND REMUNERATION

Details as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(i) Details of the employees employed throughout the year and drawing remuneration which in the aggregate was Rupees One Crore and Two Lakhs or more per annum, during the financial year.

During the year, no employees were in receipt of remuneration exceeding Rupees One Crore and Two Lakhs in aggregate, perannum.

(ii) None of the employees employed for a part of the financial year, was in receipt of remuneration for any part of that year, which, in the aggregate exceeds Rupees Eight Lakhs and Fifty Thousand per month, during the financial year.

(iii) None of the employees except Managing Director hold by himself or along with his/her spouse and dependent children, more than two percent of the equity shares of the Company.

Details required as per Section 197 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Name of Director/KMP	Amount of Remuneration Per Annum	Ratio of Remuneration to Median Remuneration of Employees for the FY	% increase in Remuneration during the FY
		NIL

Number of permanent employees on the rolls of the Company as on 31.03.2017

The number of permanent employees on the rolls of the Company as on 31st March, 2017 stood at 2 employees.

Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase In the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

There was no increment found in salaries of the employees in your Company during the financial year.

Percentage increase in the median remuneration of employees in the financial year

During the year, none of the employees were in receipt of remuneration.

Details of pecuniary relationship or transactions of the non-executive directors vis-d-vis the Company

Directors are not getting any sitting fee till now and they do not have any pecuniary relationship or transactions with the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company does not have any operations during the year and hence this may not be applicable to the Company.

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

The Company does not have any female employee and hence this may not be applicable to the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the year there are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2017 TILL THE DATE OF THIS REPORT

There are no material changes and commitments affecting the financial position of the Company which has occurred since 31.03.2017 till the date ofthis report.

EXTRACTOFANNUALRETURN

An extract of the Annual Return in form MGT-9 is annexed herewith as marked as Annexure - 3 and forms part of this report.

RELATED PARTY TRANSACTIONS

As required under Provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016, the Company has developed a policy on dealing with Related Party Transactions. The details of Related Party Transactions are provided in the Notes to the Accounts.

CORPORATE GOVERNANCE

Not applicable to the Company.

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

The details on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed herewith as marked as Annexure -4 and forms part ofthis report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: -

i. In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review.

iii. 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. The directors have prepared the annual accounts on a going concern basis.

v. The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

DEPOSITORY SYSTEM

As the members are aware, your Companys shares are in physical form and the Company does not have connectivity with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Once the operations are improved, the Company will establish connectivity and make the shares available in electronic form.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the Employees, Bankers and other Central and State Government Agencies for the continued support given by them to the Company and their confidence reposed in the management. The Directors appreciate and value the contributions made by every member of the Company.

	For and On behalf of the Board of Directors
Chennai	K. CHANDRASEKARAN	K. PURUSHOTHAMAN
1st September, 2017	Managing Director	Director