Your Directors have pleasure in presenting the 34th Annual Report of yourCompany together with the Audited Statements of Accounts for the financial year endedMarch 31 2016.
( Rs. in Lac)
|Financial Results ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Sales / Revenue for the Year ||364.85 ||959.78 |
|Profit before Tax & Extraordinary Items ||5.37 ||26.15 |
|Less : Provision for Taxation (including Deferred Tax) ||0.55 ||7.54 |
|Less : Taxes for earlier years ||0.85 ||- |
|Profit after Tax ||3.97 ||18.61 |
|Less : Adjustments for Depreciation ||- ||8.59 |
|Add : Profit brought forward from Previous Year ||144.16 ||139.14 |
|Profit available for appropriation ||148.13 ||149.16 |
|Transfer to General Reserve ||- ||5.00 |
|Balance carried forward to Next Year ||148.13 ||144.16 |
OVERVIEW OF ECONOMY
Despite the rough and uncertain global environment India's economic growth has beensteady and robust in 2015-16. Additionally inflation fiscal deficit and current accountbalance have exhibited distinct signs of improvement. The Survey states that GDP growth inFY16 is likely to increase to 7.6% in 2015-16 from 7.2% in 2014-15. India's GDP growthprojection for FY 2017 stands at 7- 7.5% despite moderating global growth. FurtherIndia's long run potential growth rate is around 8- 10% and realizing this potentialcalls for a push on three main fronts: creating a competitive environment majorinvestments in health and education of people and focus on agriculture.
The Gross Value Added (GVA) broadly reflecting the supply or production side of theeconomy registered an increase in its growth rate of 7.1% in 2014-15. In the currentyear the growth in GVA is likely to increase to 7.3% affirming the positive trends inthe economy. The total GVA followed a smooth trajectory of growth in the current year.Quarter-wise the growth measured by GVA at basic prices was 7.2% 7.5% and 7.1%respectively in the first three quarters of 2015-16 and further increased to 7.4% in thefourth quarter of 2015-16.
OVERALL PERFORMANCE & OUTLOOK
Gross Revenue from operations for the year stood at Rs. 364.85 lac in comparison tolast year revenue of Rs. 959.78 lac. PBT Margin for the year stood at Rs. 5.37 lac incomparison to last years profit of Rs. 26.15 lac whereas Profit after Tax andExtra-Ordinary items stood at Rs. 3.97 lac in comparison to last years figure of Rs.18.61 lac.
The Company is into the business of trading in textile products investments in shares& securities and deploying its surplus fund in treasury operations.
The Company has faced several challenges in the both front; i.e. of textile businessand investment activities. In regard to textile business growing competition and lack ofretail demand has seriously affected the business of the Company and higher inflation hasadded the fuel to the same.
In regard to the capital market activities high volatility and lack of retailparticipation as well as low volume in Mid Cap and Small Cap shares have broadly affectedthe activities of the Company.
DIVIDEND AND RESERVES
Due to significant fall in profit margin and with a view to conserve resources to facefuture challenges your Directors do not recommends any dividend for the year underreview.
During the year under review sum of Rs. Nil were transferred to General Reserves.
The paid up Equity Share Capital as on March 31 2016 was Rs. 1328.4474 Lac. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on March 31 2016 none of the Directors of theCompany hold shares or convertible instruments of the Company.
During the Financial Year the face value of Equity Shares have been sub-divided fromRs. 10/- to Rs. 1/- effective from 14th December 2015.
FINANCE AND ACCOUNTS
Your Company prepares its financial statements in compliance with the requirements theCompanies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India. Thefinancial statements have been prepared on historical cost basis. The estimates andjudgments relating to the financial statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Companys state of affairs profits/(loss) and cash flows for the yearended 31st March 2016.
The Company continues to focus on judicious management of its working capital.Receivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring.
There is no audit qualification in the standalone financial statements by the statutoryauditors for the year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the holding company in the immediately preceding accounting yearor has generated 20% of the consolidated income of the Company during the previousfinancial year. Accordingly a policy on material subsidiaries has not been formulated.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of SEBI LODR Regulations 2015 during the financial year were inthe ordinary course of business and on an arms length pricing basis and do notattract the provisions of Section 188 of the Companies Act 2013 and the Rules madethereunder are not attracted and thus disclosure in form AOC-2 in term of Section 134 ofCompanies Act 2013 is not required. Further there are no materially significanttransactions with related parties during the financial year which were in conflict withthe interest of the Company. Suitable disclosure as required by the Accounting Standards(AS18) has been made in the notes to the Financial Statements. The policy on Related PartyTransactions as approved by the Board is uploaded on the Companys website.
MANAGEMENT DISCUSSION & ANALYSIS
As required by Regulation 34 of SEBI LODR Regulations 2015 the Management Discussionand Analysis is annexed and forms part of the Directors Report.
There is no Change in Management of the Company during the year under review.
During the financial year Mr. Purushottam Khandelwal has resigned from the Boardw.e.f. 13th October 2015. Apart from this there is no change in composition ofBoard.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Further none of the Directors of the Company are disqualified under sub-section (2) ofSection 164 of the Companies Act 2013.
As per provisions of Section 149 of the 2013 Act independent directors shall holdoffice for a term up to five consecutive years on the board of a company but shall beeligible for re-appointment for another term up to five years on passing of a specialresolution by the company and disclosure of such appointment in Boards Report.Further Section 152 of the Act provides that the independent directors shall not be liableto retire by rotation in the Annual General Meeting (AGM) of the Company.
As per requirements of Regulation 25 of SEBI LODR Regulations 2015 a person shall notserve as an independent director in more than seven listed entities: provided that anyperson who is serving as a whole time director in any listed entity shall serve as anindependent director in not more than three listed entities. Further independentdirectors of the listed entity shall hold at least one meeting in a year without thepresence of non-independent directors and members of the management and all theindependent directors shall strive to be present at such meeting.
DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR
|Sl. No. ||Name ||Designation ||Date of Appointment ||Date of Resignation |
|1. ||Ms. Ankita Sharma ||Company Secretary ||- ||15th May 2015 |
|2. ||Ms. Minu Jhunjhunwala ||Company Secretary ||15th May 2015 ||- |
|3. ||Raj Kumar Mishra ||Chief Financial Officer ||- ||1st April 2016 |
|4. ||Purushottam Khandelwal ||Independent Director ||- ||13th October 2015 |
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT
There have been no material changes and commitments affecting the financial position ofthe Company between the end of Financial Year and date of the report.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statement in terms of Section 134(3)(c) of theCompanies Act 2013:
1. that in the preparation of the Annual Accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
2. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of theprofit/(loss) of the Company for the year ended on that date;
3. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. the annual accounts have been prepared on a going concern basis;
5. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
6. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Innovation and Technology are synonymous with the Company. The investment in technologyacts as a catalyst and enables the Company to be innovative.
BUSINESS RISK MANAGEMENT
Risk management is embedded in your Companys operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Companys approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.
However provision of Regulation 21 of SEBI LODR Regulations 2015 for constitution ofRisk Management Committee is not applicable to the Company.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficiency and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies. Based on the report of internal audit function process ownersundertake corrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company i.e.www.khoobsuratltd.com
RESEARCH & DEVELOPMENT
The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development is not significant in relation to thenature size of operations of your Company.
The Auditors M/s Bharat D. Sarawgee & Co. Chartered Accountants Kolkata who areStatutory Auditors of the Company and holds the office until the conclusion of ensuingAnnual General Meeting and are recommended for re-appointment to audit the accounts of theCompany from the conclusion of the 34th Annual General Meeting up to theconclusion of the 37th consecutive Annual General Meeting (subject toratification by the members at every subsequent AGM). As required under the provisions ofSection 139 & 142 of the Companies Act 2013 the Company has obtained writtenconfirmation from M/s. Bharat D. Sarawgee & Co.; that their appointment if madewould be in conformity with the limits specified in the said Section.
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 hasappointed Ms. Priti Agarwal (C. P. No. 9937) Company Secretaries in Practice to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report isannexed as MR-3 in this Annual Report.
The Company has appointed M/s. Jaiswal Akash & Co. Chartered Accountants (FRN -328324E) as Internal Auditors of the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedelsewhere in this Annual Report.
PARTICULARS OF EMPLOYEES
The Company wishes to place on record their appreciation to the contribution made bythe employee of the Company during the period.
During the year under review there were no employees who were in receipt of theremuneration beyond the limits prescribed under Rule 5 (2) of Companies (Appointment andRemuneration) Rules 2014 and therefore no disclosures need to be made under the saidsection.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder the Companyhas not received any complaint of sexual harassment during the year under review.
PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013
Since the Company is into the business trading in textile products of financing andinto the investing activities in Shares and Securities; the information regardingConservation of Energy Technology Absorption Adoption and Innovation as defined undersection 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 is reported to be NIL.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has not earned sum of US$ 135729/- towards foreign exchange earnings asagainst export of garments. However there is no outgoings in foreign exchange during theyear under review.
During the year under review your Company has not accepted any deposit from the publicfalling within the ambit of Section 73 of the Companies Act 2013 and The Companies(Acceptance of Deposits) Rules 2014.
REPORT ON CORPORATE GOVERNANCE
The Company conforms to the norms of Corporate Governance as envisaged in the CompaniesAct 2013 and the SEBI LODR Regulations 2015. Pursuant to Regulation 27 of the SEBI LODRRegulations 2015 a Report on the Corporate Governance and the Auditors Certificate onCorporate Governance are annexed to this report.
Statements in this Directors Report and Management Discussion and Analysisdescribing the Companys objectives projections estimates expectations orpredictions may be "forward-looking statements" within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed or implied.
Your Directors wish to place on record their appreciation towards the contribution ofall the employees of the Company and their gratitude to the Company's valued customersbankers vendors and members for their continued support and confidence in the Company.
|Kolkata May 30 2016 ||By order of the Board |
| ||For Khoobsurat Limited |
| ||Sd/- |
|Registered Office : || |
|Room No. 40 5th Floor ||Goutam Bose |
|Martin Burn House 1 R N Mukherjee Road ||(DIN : 02504803) |
|Kolkata-700 001 ||Managing Director |