Gemstone Investments Limited
502-B Padmavati Heights 5th Floor Shraddhanand Road Ext.
Vile Parle (East)
Mumbai - 400 057.
The Directors have pleasure in submitting the Annual Report on the business andoperations of the Company along with the Audited Financial Statements for the financialyear ended March 31 2017.
FINANCIAL AND OPERATIONAL HIGHLIGHTS:
Financial Results of the Company for the year under review along with the figures forprevious year are as follows:
|Particulars ||F.Y 2016-17 ||F.Y 2015-16 |
|Total Revenue ||20786038.00 ||22916702.00 |
|Total Expenses ||12064910.29 ||17741379.96 |
|Profit Before Tax ||8721127.71 ||5175322.04 |
|Current Year Tax ||2600000.00 ||2106834.77 |
|Deferred Tax ||50145.00 ||- |
|Profit After Tax ||6070982.71 ||3068487.27 |
|Profit for the Year ||6070982.71 ||3068487.27 |
REVIEW OF OPERATIONS:
The Company reported gross annual revenue of Rs. 207.86 lakhs viz-a-viz Rs. 229.16lakhs in the previous year. However the Company has nearly doubled the net profit aftertax which stood at Rs. 60.70 lakhs as compared to Rs. 30.68 lakhs last year. The Earningsper share for the year ended March 31 2017 doubled to Rs. 0.08 per shares versus Rs. 0.04per share in the previous year.
Your company is a Non-Banking finance Company registered with the Reserve Bank ofIndia.
Your directors do not recommend any dividend for the financial year in order topreserve funds for future business endeavors.
TRANSFER TO RESERVES:
The company has not transferred any amounts of profits to the Reserves.
TRANFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
The Ministry of Corporate Affairs has notified provisions relating to unpaid /unclaimed dividend under Sections 124 and 125 of Companies Act 2013 and InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016. As perthese Rules dividends which are not encashed / claimed by the shareholder for a period ofseven consecutive years shall be transferred to the demat account of Investor Educationand Protection Fund (IEPF) Authority.
There is no such pending amount of unpaid or unclaimed dividend with the Company thusthere is no obligation on the Company to transfer any amount to IEPF.
The paid up Equity Share Capital as at March 31 2017 stood at Rs 74750000/-. Therewas no public issue rights issue bonus issue or preferential issue etc. during theyear. Your Company has not issued shares with differential voting rights sweat equityshares nor has it granted any stock options during the year under review.
Your Company has not accepted any deposits from the public falling within the purviewof Section 73 of the Act read with the Companies (Acceptance of Deposit) Rules 2014during the year. Neither there was any public deposit outstanding as at the beginning orend of the year ended on March 31 2017.
SUBSIDIARIES JOINT VENTURE OR ASSOCIATES
Your Company does not have any subsidiary associates or joint venture as on thefinancial year March 31 2017.
In terms of Section 129 of the Companies Act 2013 read with third proviso to Rule 5 ofCompanies (Accounts) Rules 2014 the statement containing the salient feature of thefinancial statement of Associate Company in form AOC-1 is enclosed as "Annexure 1" which forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The management of your Company has a healthy mix of youth and experienced individualswith a very strong Board of Directors to guide the business. Mrs. Dhara Brahmbhatt theManaging Director and Mr. Deepak Apraj the Chief Financial Officer of the Company are theKey Managerial Personnel of the Company.
CHANGES IN DIRECTORS:
During the Financial Year under review Mr. Rohan Barot was relieved from the Post ofCFO and Director and Mr. Deepak Apraj was appointed as the Chief Financial Officer w.e.f.September 03 2016. Ms. Manali Bhuva was appointed by the members as Non ExecutiveDirector of the Company pursuant to provisions of Section 160 of the Act w.e.f September30 2016
Mr. Nimesh Ganatra and Mr. Mahendra Dave tendered their resignations w.e.f. July 122017. In order to restructure the Board Mr. Tarun Brahmbhatt was appointed as anon-Executive Director Ms. Manali Bhuva was appointed as the Chairman of the Board inplace of Ms. Dhara Brahmbhatt w.e.f. July 12 2017.
DIRECTORS RETIRING BY ROTATION:
In accordance with the provisions of the Companies Act 2013 Ms. Manali Bhuvais liableto retire by rotation at this Annual General Meeting and being eligible has offeredherself for re-appointment. Her re-appointment is being placed for your approval at theAGM. Your Directors recommend her re-appointment. The resolution for her saidreappointment forms a part of the notice to the Annual General Meeting.
NUMBER OF BOARD MEETINGS:
During the Financial Year under review the Board met six times on 30/05/201613.08.2016 02.09.2016 25.10.2016 14.11.2016 and 13.02.2017 as against the minimumrequirement of four meetings. The gap between any two meetings was not more than 120 days.The details regarding the dates of the meetings with the names of the directors whoattended the meetings are summarized in Corporate Governance Report which forms a part ofthis Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS:
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of Independence as prescribed under the provisions of theCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (including any statutory modification(s) or re-enactment(s) for the time being inforce).
COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:
Your Company has been following well laid down policy on appointment and remunerationof Directors KMP and Senior Management Personnel. The appointments of Directors are madepursuant to the recommendation of Nomination and Remuneration Committee.
The remuneration of Executive Directors comprises of Basic Salary and Perquisites andfollows applicable requirements of the Companies Act 2013. Approval of shareholders andthe Central Government if so required for payment of remuneration to Executive Directorsis sought from time to time.
A brief of the Policy on appointment and remuneration of Directors KMP and SeniorManagement is uploaded on the Company's website www.gemstoneltd.com. The Company'sRemuneration Policy for Directors Key Managerial Personnel and Senior Management isenclosed as "Annexure 2"to this Report.
PERFORMANCE EVALUATION OF DIRECTORS:
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the nomination and remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the chairman was also evaluated on the key aspects of his role.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 your Directors confirm that:-
i. In the presentation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii. We had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2017 and of the profit and loss ofthe Company for the financial year ended on that date;
iii. Proper and sufficient care had been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. The annual accounts have been prepared on a going concern basis;
v. Internal financial controls have been laid down and the same are adequate and wereoperating effectively; and
vi. We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
COMMITTEES OF THE BOARD:
The Company has duly constituted the Committees required under the Companies Act 2013read with applicable rules made thereunder and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The Committees of the Board formed are as under:
i. Nomination and Remuneration Committee
ii. Stakeholders Relationship Committee
iii. Audit Committee
iv. Risk Management Committee
The details with respect to the composition powers roles terms of referenceMeetings of all the relevant committees are provided in the report on corporate governanceof the Company which forms part of this Annual Report.
As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Corporate Governance provisions are not applicable to your Company.However the Company thinks that it a good practice to follow the governance to increasethe stakeholders trust and provide you with a separate Report on Corporate Governance. Thesaid report forms part of this Annual Report and also contains certain disclosuresrequired under the Companies Act 2013.
Your Company has a Whistle Blower Policy for the employee to report genuineconcerns/grievances. This Policy is uploaded on the Company's website www.gemstoneltd.com.The Policy provides for adequate safeguards against the victimization of the employees whouse the vigil mechanism. The vigil mechanism is overseen by the Audit Committee.
STATUTORY AUDITOR & AUDIT REPORT:
A casual vacancy was caused in the office of M/s. N. R. Gala & Associates due tonon ratification of his appointment by the members in the Annual General Meeting held on30th September 2016. Pursuant to Section 139(8) of the Companies Act 2013 theBoard decided to fill the casual vacancy and appointed M/s. Tejas Nadkarni &Associates as a statutory auditor w.e.f. 25th October 2016 to hold office tillthe conclusion of the ensuing AGM. The Board on recommendation of the Audit Committeeproposes the appointment of M/s. Tejas Nadkarni & Associates who shall hold theoffice as Statutory Auditors of the Company from the conclusion of this ensuing AGM tillthe conclusion of the Annual General Meeting of the Company for the FY 2020-21 subject toratification by members at every AGM.
Necessary resolution seeking approval of the members for appointment of new statutoryauditors has been incorporated in the Notice convening the Annual General Meeting formingpart of this Annual Report. The Auditors' Report does not contain any qualificationreservation or adverse remark and the Notes on financial statement referred to in theAuditors' Report are self-explanatory and do not call for any further comments or requireany explanations.
SECRETARIAL AUDITOR & REPORT:
The Board had appointed Ms. Swati Gupta Practicing Company Secretaries as theSecretarial Auditor to conduct the secretarial audit for the financial year ended 31stMarch 2017. The Report of the Secretarial Auditor is provided as Annexure - 3 to thisReport.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark. INTERNAL AUDITOR:
Pursuant to provisions of Section 138 of the Companies Act 2013 your Company appointedM/s. Agarwal Desai & Shah as Internal Auditor of the Company. To maintain hisobjectivity and independence the Internal Auditor reports to the Chairman of the AuditCommittee.
The Internal Auditor monitors and evaluates the efficiency and adequacy of internalcontrol systems of your Company its compliance with accounting procedures and policies ofyour Company. Based on the report of Internal Audit the management undertakes correctiveaction and thereby strengthens controls.
REPORTING OF FRAUDS BY AUDITOR:
During the year under review the Statutory Auditor and the Secretarial Auditor havenot reported any instances of frauds committed by the Company by its officers or employeesto the audit committee under section 143(12) of the Companies Act 2013 details of whichneeds to be mentioned in the Annual Report.
The Company has complied with all the applicable regulations of the Reserve Bank ofIndia (RBI) as on 31st March 2017.
RELATED PARTY TRANSACTIONS:
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onthe Company's website. The Policy intends to ensure proper reporting approval anddisclosure processes are in place for all transactions between the Company and RelatedParties.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and at Arm's Length basis. No Material Related Party Transactions i.e.transactions exceeding 10% of the annual consolidated turnover as per the last auditedfinancial statements were entered during the year by your Company. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3) (h) of theCompanies Act 2013 in Form AOC-2 is not applicable.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT2013:
Pursuant to Section 186(11) of the Companies Act 2013 disclosure in the financialstatements of the full particulars of the loans made and guarantees given or securitiesprovided by a Non-Banking Financial Company in the ordinary course of its business asrequired under the provisions of Section 186(4) of the Act are exempted.
The details of investments made form part of the notes to financial statements.
CORPORATE SOCIAL RESPONSIBILITY
The conditions prescribed in the Section 135 of the Companies Act 2013 requiring aCompany to constitute a Corporate Social Responsibility Committee are not applicable toyour Company. The Board of Directors periodically reviews the applicability of CSR rulesto the Company.
Your Company has a well-defined risk management framework in place. The risk managementframework works at various levels across the enterprise. These levels form the strategicdefense cover of the Company's risk management. The Company has a robust organisationalstructure for managing and reporting on risks.
Your Company has constituted a Risk Management Committee of the Board which isauthorized to monitor and review risk management plan. The Committee is also empoweredinter alia to review and recommend to the Board the modifications to the Risk ManagementPolicy. This Policy is also uploaded on the Company's website www.gemstoneltd.com. TheRisk Management Framework is been periodically reviewed to keep updated and addressemerging challenges.
INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company is responsible for ensuring that InternalFinancial Control have been laid down in the Company and that such control are adequateand operating effectively. The foundation of Internal Financial Control (IFC) lies inGemstone's Code of Conduct policies and procedures adopted by the Management CorporateStrategies annual business planning process management reviews management systemcertifications and the risk management framework.
The Company has IFC framework commensurate with the size scale and complexity of itsoperations. The framework has been designed to provide reasonable assurance with respectto recording and providing reliable financial and operation information complying withapplicable laws safeguarding with proper authorization and ensuing compliance withcorporate policies.
The controls based on the prevailing business conditions and processes have beentested during the year and certain aspect in the design or effectiveness which wereobserved by the auditor would be taken care by the Board.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internalcontrols systems in the Company its compliance with operating systems accountingprocedures and policies. Based on the report of internal audit function process ownersundertake corrective action(s) in their respective area(s) and thereby strengthen thecontrols. Significant audit observations and corrective actions(s) thereon are presentedto the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION
The information required pursuant to Section 197(12) of the Act read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isdisclosed in Annexure - 4' to this report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. All employees (permanent contractual temporary trainees) are covered underthis policy. The policy is gender neutral.
During the year under the review no complaints with allegations of sexual harassmentwas received by the Company.
DISCLOSURE OF PENDING CASES / INSTANCES OF NON-COMPLIANCE:
There were no non-compliances by the Company and no instances of penalties andstrictures imposed on the Company by the Stock Exchanges or SEBI or any other statutoryauthority on any matter related to the capital market during the last three years.
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and the date ofthis Report.
INVESTOR RELATIONS (IR):
Your Company continuously strives for excellence in its investor relations. YourCompany believes in building a relationship of mutual understanding with investors. Yourcompany ensures that critical information about the company is available to all theinvestors by uploading all such information on the Company's website.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO:
The Company carries out the business of a Non-Banking Finance Company. Thus theparticulars regarding conservation of energy & technology absorption as required to bedisclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules 2014 are notrelevant to its activities.
There were no foreign exchange earnings or outgo during the year under review.
EXTRACT OF ANNUAL RETURN:
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act readwith Rule 12 of Companies (Management and Administration) Rules 2014 an extract ofAnnual Return in prescribed Form MGT-9 is appended as Annexure - 5' to this Report
Your Company's vision is to become an employer of choice by providing a compellingemployee value proposition. It strives to attract the best talent and ensures employees'development retention and contribution to the Company's success. The HR policies andpractices are focused on creating Happy Engaged and Productive workforce. It intends tocontinue investing in leadership development employee engagement training and employeeassistance programs etc.
APPRECIATIONS AND ACKNOWLEDGMENTS:
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The Directors also wish to place on recordtheir appreciation for the dedication and contribution made by employees at all levels andlook forward to their support in future as well.
The Board places on record its appreciation for the support and co-operation yourCompany has been receiving from its Bankers Customers Government RegulatoryAuthorities Stock Exchange Vendors and Investors for their continued support during theyear.
It will be your Company's endeavor to build and nurture strong links with the tradebased on mutuality of benefits respect for and co-operation with each other consistentwith consumer interests.
| ||For and on behalf of the Board |
| ||For Gemstone Investments Limited |
| ||Sd/- |
|Place: Mumbai. ||Manali Bhuva |
|Date: August 21 2017. ||Chairman |