FE India Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting their Twentieth Annual Report together with the Audited Statement of Accounts for the year ended as at March 31, 2015.

FINANCIAL RESULTS

		Rs. in ‘000
	Financial Year	Financial Year
	2014-15	2012-13
	(15 months)	(15 months)
Total Income	1,11,17,203	1,08,03,774
Profit before Depreciation & Tax	1,00,848	1,00,993
Less: Depreciation	7,854	7,802
Profit before Tax	92,994	93,191
Less: Provision for Tax	29,665	31,304
Profit available for appropriation	63,328	61,887
Appropriation	-	-
Profit(Loss) carried forward	63,328	61,887

FINANCIAL PERFORMANCE

During the year under review, your Company has achieved a turnover of Rs. 1117.20 Crores (15 months) on a standalone basis as against Rs. 1077.80 Crores in the previous year(15 months), a 3.65% increase over the previous year. The net profit after tax stood at Rs. 6.33 Crores as against Rs. 6.19 Crores in the previous year.

We can see clearly that the Company performed significantly better in the financial year 2014-15.

CHANGE IN FINANCIAL YEAR

To align the financial year of the company with the provisions of the Companies Act 2013, the current Financial Year of the Company was extended by 3 months. Accordingly, the audited financial statements for the current financial year have been prepared for a period of fifteen months beginning January 1, 2014 and ending on March 31, 2015.

DIVIDEND

The Board has decided not to recommend payment of dividend. Though the Board had recommended the payment of dividend in its earlier board meeting held on June 6, 2015, after considering and approving the Audited Financial Statements for the year ended March 31,2015. But in supersession of the earlier recommendation and keeping in view its financial position at present the Board has taken aback its recommendation. The company is going through severe financial constraints at the moment and it had incurred unexpected losses in the last quarter ended June 30, 2015. So, the Board of Directors have decided to retain the profits for the future and have considered it financially prudent in long-term interests of the Company to reinvest the profits as at the end of the financial year into the business of the Company and to utilize the reserves base for the future projects in hand and grow the business of the Company. In the view of the above no dividend therefore been recommended for the Financial Year ended March 31, 2015. The Directors submit that it would enhance the shareholders value in long term.

FIXED DEPOSITS

During the year under review, your Company has not accepted/renewed any deposits from the public in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 and Rules amended thereafter.

PARTICULARS OF CONTRACTS OR ARRANGMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013, in the prescribed Form AOC -2, is appended as Annexure I to the Board’s Report.

With reference to Section 134(3) (h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract or arrangement with related parties which could be considered ‘material’ according to the policy of the Company on Materiality of Related Party Transactions.

LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans, guarantees and investments made by the Company pursuant to Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Accounts.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as

AnnexureII

CORPORATE SOCIAL RESPONSIBILTY

Today, Corporate Social Responsibility has become a worldwide concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.

As per Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) Committee has been formed by the Company. Your Company undertakes its Corporate Social Responsibility (CSR) activities through a variety of effective programs. The main areas of CSR activities are women safety and empowerment.

Even though the Company has implemented the CSR but due to operational constraints the management could not insure its due compliance an execution, hence worth the management has decided to tighten its belt to ensure timely execution of CSR in the next financial year.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on the Management Discussion & Analysis of the financial position and the results of the operation of the Company for the year under review is annexed to this Report as required under Clause 49 of the Listing Agreement with the Stock Exchanges.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors at its Meeting held on March 31, 2015, had appointed Mr. Abhishek Mishra, Mr. Sumedh Khanna Bharadwaj, as an Additional Director (Non Executive & Independent) Mr. Mukesh Jain and Mr. Vishal Bakshi as Independent Directors of the Company for a term of five years w.e.f. March 31, 2015 to March 30, 2020 subject to the members of the Company. The Company has received declarations from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

The Board of Directors at its Meeting held on July 7, 2015, had appointed Mrs. Abhilasha Agarwal as Whole Time Director for a period of 5 years with effect from July 7, 2015 to July 6, 2020 subject to the approval of members of the Company.

In the same Board Meeting held on July 7, 2015 the Board of Directors also accepted the resignation tendered by Mr. Trinadh Kiran Vemuri from the Post of Whole Time Director and Mr. Vishal Bakshi from the post of Independent Director due to their personal and unavoidable circumstances.

Mr Ravi Joshi retires at the AGM and has offered himself for re-appointment.

Necessary resolutions for the appointment of the aforesaid Directors have been included in the Notice convening the ensuing AGM and details of the proposal for appointment are mentioned in the Explanatory Statement to the Notice.

The Board of Directors at its Meeting held on July 15, 2015, had appointed Mr. Manish Kant Agarwal as Chief Executive Officer and Key Managerial Personnel ("KMP") of the Company and had re-appointed Mr. Praveen Kumar Chowdhary as Chief Financial Officer and Key Managerial Personnel of the Company.

Mrs. Abhilasha Agarwal, Whole Time Director; Mr. Manish Kant Agarwal, Chief Executing Officer(w.e f July 15, 2015), Mr. Praveen Kumar Chowdhary, Chief Financial Officer and Mrs. Deepti Dabral, Company Secretary are the KMPs of the Company as per the provisions of the Act.

CORPORATE GOVERNANCE

Your Company has ensured continued compliance of Corporate Governance requirements during the period under review. Your Company lays strong emphasis on transparency, disclosures and independent supervision to increase various stakeholders’ value. Responsible corporate conduct is integral to the way we do our business. Our actions are governed by our values and principles, which are reinforced at all levels within the Company. Our Company fully confirm to standards set out by SEBI and other regulatory authorities and has implemented and complied with all of its major stipulations. Our Directors are committed to conduct the business of the Company with the highest level of integrity and transparency.

As per Clause 49 of Listing Agreement, a report on corporate governance along with Compliance Certificate from the Chartered Accountants forms part of the Annual Report.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Board of Directors of your Company state:

(i) that in the presentation of the annual accounts, the applicable accounting standards have been followed.

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments that are 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 March 31, 2015and of the profit and loss of the Company for the year ended march 31, 2015.

(iii) that 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, safeguarding the assets of the Company and for preventing fraud and other irregularities.

(iv) that the Directors have prepared the annual accounts on a going concern basis.

(v) that the proper internal financial controls were followed by the Company and such internal controls are adequate and were operating effectively

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

AUDITORS

M/s L M S C, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Board of Directors has recommended their re-appointment as auditors.

The Auditors of the Company have made following remarks/observation in their report:

1. As per "Point 2(c) of the Annexure"- "On the basis of our examination of the records, we are of the opinion that the Company should maintain site-wise real time record of stocks for better control. At present company is maintaining inventory records at head office in accounting software which are not real time and some desirable information like goods in-out time, vehicle details etc. are also not available in these records. In our opinion, company need to improve record keeping with respect to the inventories"

2. As per "Point 9(a) of the Annexure" –"According to the records of the company, we have noticed delays in payment of undisputed statutory dues including Employees’ State Insurance, Income-tax, Sales-tax/VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues as applicable. Following is detail of such dues outstanding for more 6 months or more on close of books of the company for the year:"

Nature of Statute	Nature of Dues	Amount	Period to which the amount relates	Due Date	Date of Payment
Finance Act, 1994	Service Tax	0.61 Lacs	FY 2013-14	Various dates upto 31.03.2014	Not paid till date of Audit Report
Finance Act, 1994	Service Tax	0.67 Lacs	FY 2014-15	Various dates upto 05.10.2015	Not paid till date of Audit Report
Income Tax Act,1961	Income Tax in relation to AY 2014-15	228.38 Lacs	FY 2013-14	30-Sep-14	Not paid till date of Audit Report

The Companies views:

The Company has taken the facility of go-downs all over India and all the information regarding the stocks is received from go-downs. So, afterwards the computerized records of the same are maintained at the head office as per the information so received. However, for better management and control the Company has started maintaining the detailed records of the stock at the head office.

For the delay in payment of statutory dues: Even though the company has made adequate turnover but the realization from its debtors has been delayed. Hence there has been a delay in payment of due taxes.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act, the Board of Directors has appointed M/s K.C. Singhal & Associates, Chartered Accountants as the Internal Auditors for conducting Internal Audit of the Company for the financial year 2014-2015.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act, the Board of Directors has appointed Mr Umesh Agarwal, M/s Agarwal U. & Associates, practicing Company Secretary for conducting secretarial audit of the Company for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith as

Annexure III.

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

CONSERVATION OF ENERGY, TECHNOLOGY, & FOREIGN EXCHANGE

Since the Company is not involved in any manufacturing activity, the particulars regarding conservation of energy and technology absorption are not provided.

Particulars of Foreign Currency earning and outgo, during the year, are annexed as Annexure IV

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary of the Company in this regard.

ACKNOWLEDGEMENT

Your Directors take on record their sincere appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co-operation towards the success of your Company. Your Directors wish to place on record their deep appreciation and gratitude for the cooperation and assistance extended to your Company by banks, government agencies, investors and business associates. Your Directors are thankful to the members and investors for their whole hearted support and for providing continuous strength to the Company and its management.

	By Order of the Board
	For FE (India) Limited
	Sd/-	Sd/-
	Mukesh Jain	Mukund Sharan
Date: September 01, 2015	(Director)	(Director)
Place: New Delhi	DIN: 00059649	DIN: 00004881

Annexure-III-

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31^st March, 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and ruleNo.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

31.08.2015

To,

The Members, FE (India) Limited. Regd. Office: W-19, Greater Kailash-II, New Delhi - 110048

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s FE (India) Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31^st March, 2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31^st March, 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an 12 Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

(vi) OTHER LAW OR ACTS SPECIFICALLY APPLICABLE TO THE COMPANY;

a) Payment Of Wages Act, 1936, and rules made thereunder;

b) The Minimum Wages Act, 1948, and rules made thereunder;

c) Employees’ State Insurance Act, 1948, and rules made thereunder;

d) The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, and rules made thereunder;

e) The Payment of Bonus Act, 1965, and rules made thereunder;

f) Payment of Gratuity Act, 1972, and rules made thereunder;

Note: We have not examined the books, papers and other relevant documents related to the financial laws like tax laws and Customs Act etc., we rely on the Reports given by Statutory Auditors or other designated professionals and their qualification, reservation or any adverse remark given in their Audit report, shall be admittable.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange;

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc mentioned above subject to the following observations:

The Company has duly constituted a Corporate Social Responsibility Committee of the Board within the due time as prescribed under Companies Act, 2013 but due to some unavoidable reasons the Company did not spending the amount, in full, earmarked for Corporate Social Responsibility Activities according to the provisions of section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Therefore, the Board shall disclose the reasons for not spending the amount on Corporate Social Responsibility, in its report made under clause (o) of sub-section (3) of section 134 of the Companies Act, 2013.

We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the company has made private placement and preferential issue of shares by conversion of share warrants, in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above).

	For Aggarwal U. & Associates
	Sd/-
	(Umesh Aggarwal)
	Proprietor
Place : New Delhi	C P No.: 12716
Date : 31.08.2015	M. No. 34035

To,

The Members, FE (India) Limited.

Regd. Office: W-19, Greater Kailash-II, New Delhi - 110048

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we follow provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and books of accounts of the company.

4. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provision of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to verification of procedures on test basis.

6. The secretarial audit report is neither an assurance as to the future viability of the company nor the efficacy or effectiveness with which the management has conducted the affairs of the company.

	For Aggarwal U. & Associates
	Sd/-
	(Umesh Aggarwal)
	Proprietor
Place : New Delhi	C P No.: 12716
Date : 31.08.2015	M. No. 34035

Annexure-IV

Earning and Expenditure in Foreign Currency

Particulars	For the period ended March 31,2015	For the period ended December 31,2013
Earnings
Export (on FOB basis)(Dollar Trade)	158,348,137.50	36,55,68,158.18
Export (on FOB basis)(Re Trade)	-	1,24,14,44,000.00
Commission	5,559,300.00	-
	163,907,437.50	1,60,70,30,158.18
Expenditures
Import (on CIF Basis)	236,359,509.35	10,29,74,270.00
Foreing Traveling	-	48,28,191.18
Brokerage & Commission	18,629,975.00	1,34,99,982.89
Overseas Freight		10,52,65,609.00
Total	254,989,484.35	22,65,68,053.07