Your Directors have pleasure in presenting the 35th Annual Report of your Companytogether with the Audited Statements of Accounts for the financial year ended March 312017.
| || ||Rs in Lac |
|Financial Results ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Sales / Revenue for the Year ||284.32 ||364.85 |
|Profit before Tax & Extraordinary Items ||(0.11) ||5.37 |
|Less : Provision for Taxation (including Deferred Tax) ||(0.36) ||0.55 |
|Less : Taxes for earlier years ||- ||0.85 |
|Profit after Tax ||0.25 ||3.97 |
|Add : Profit brought forward from Previous Year ||148.13 ||144.16 |
|Profit available for appropriation ||148.38 ||148.13 |
|Transfer to Special Reserves ||- ||- |
|Balance carried forward to Next Year ||148.38 ||148.13 |
OVERVIEW OF ECONOMY
The lingering impact of demonetization and a statistical base effect caused growth toplunge in the final quarter of FY 2017. A deceleration was seen across almost allcomponents of GDP with investment being a particular weak spot and contracting for thefirst time in two years as the stressed banking sector hurt activity. Early data for FY2017 points to lackluster momentum: industrial production growth lost steam in April andthe PMIs pointed in different directions in May. However household consumption is on themend as the impact of demonetization fades and a healthy monsoon is seen supporting ruralspending. On the political front despite speculation that the overhaul could be delayedthe sweeping GST reform appears set to be rolled out on 1 July simplifying India s arrayof indirect taxes to four rates - 5% 12% 18% and 28%. While the reform is seen largelyas positive in the long-run it is uncertain if many firms in the country are prepared forthe transition and the implementation could disrupt activity temporarily.
OVERALL PERFORMANCE & OUTLOOK
Gross Revenue from operations for the year stood at Rs 284.32 lakh in comparison tolast year revenue of Rs 364.85 lakh. PBT Margin for the year stood at Rs (0.11) lakh incomparison to last years profit of Rs 5.37 lakh whereas Profit after Tax andExtra-Ordinary items stood at Rs 0.25 lakh in comparison to last years figure of Rs 3.97lakh.
The Company is into the business of trading in textile products investments in shares& securities and deploying its surplus fund in to treasury operations.
The business of the Company has shown slowing growth due to impact of reducing demandand lower interest rates. The Company has registered low revenue earnings in both thesegments during the year under review.
In regard to the capital market activities high volatility and lack of retailparticipation as well as tightening norms for market participation 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 Special (General)Reserves.
The paid up Equity Share Capital as on March 31 2017 was Rs 1328.4474 lakh. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on March 31 2017 none of the Directors of theCompany hold shares or convertible instruments of the Company.
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 Company s state of affairs profits/(loss) and cash flows for the year ended31st March 2017.
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 Listing Regulations; during the financial year were in theordinary course of business and on an arm s length pricing basis and do not attract theprovisions of Section 188 of the Companies Act 2013 and the Rules made thereunder are notattracted and thus disclosure in term of Section 134(3)(h) r/w Rule 8 (2) of the Companies(Accounts) Rules 2014 and under Regulation 34(3) & 53(f) Para A of Schedule V ofSEBI(LODR) Regulations 2015 is attached as Annexure I. Further there are no materiallysignificant transactions with related parties during the financial year which were inconflict with the interest of the Company. Suitable disclosure as required by theAccounting Standards (AS18) has been made in the notes to the Financial Statements. Thepolicy on Related Party Transactions as approved by the Board is uploaded on the Company swebsite.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis on the operations of the Company as prescribedunder Part B of Schedule V read with regulation 34 (3) of the Listing Regulations 2015 isprovided in a separate section and forms part of the Directors Report.
CHANGE IN NATURE OF BUSINESS IF ANY.
There are no changes in the nature of business in the financial year 2016-17.
The Board of Directors have laid down the manner for carrying out an annual evaluationof its own performance its various Committees and individual directors pursuant to theprovisions of the Act and relevant Rules and the Corporate Governance requirements are incompliance with Regulation 17 of Listing Regulations 2015. The performance of the Boardwas evaluated by the Board after seeking inputs from all the Directors on the basis ofvarious criteria such as Board Composition process dynamics quality of deliberationsstrategic discussions effective reviews committee participation governance reviews etc.The performance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of criteria such as Committee composition processdynamics deliberation strategic discussions effective reviews etc. The Nomination andRemuneration Committee reviewed the performance of the individual Directors on the basisof the criteria such as transparency analytical capabilities performance leadershipethics and ability to take balanced decisions regarding stakeholders etc.
NUMBER OF MEETINGS OF THE BOARD
The details of the Board Meetings and other Committee Meetings held during thefinancial year 2016-17 are given in the separate section of Corporate Governance Report.
All Committees of the Board of Directors are constituted in line with the provisions ofthe Companies Act 2013 and applicable regulations of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
There is no Change in Management of the Company during the year under review.
There is no change in composition of Board during FY 2016-17.
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 Board s Report. FurtherSection 152 of the Act provides that the independent directors shall not be liable toretire 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. Minu Jhunjhunwala ||Company Secretary ||- ||10th June 2016 |
|2. Ms. Priti Bansal ||Company Secretary ||10th June 2016 ||1st January 2017 |
|3. Ms. Rajni Dokania ||Company Secretary ||6th March 2017 ||- |
|4. Raj Kumar Mishra ||Chief Financial Officer ||- ||1st April 2016 |
|5. Mr. Babu Mallesh Gollar ||Chief Financial Officer ||21st July 2016 ||- |
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.
CHANGE IN SITUATION OF REGISTERED OFFICE
During the year the Company has changed the situation of Registered Office within theCity limit of Kolkata.
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 2017the 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 2017 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 Company s operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company s 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 AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an Internal Control System which is commensurate with the sizescale scope and complexity of its operations. To maintain its objectivity andindependence an independent firm of Chartered accountants has been appointed as theInternal Auditors who report to the Chairman of the Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in your Company its compliance with operating systems accountingprocedures and policies of your Company. Based on the report of the Internal Auditorsplaced before the Audit Committee process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. The internal controls have beenreported by the Auditors to be adequate and effective during the year.
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.
Existing Auditors M/s Bharat D. Sarawgee & Co. Chartered Accountants Kolkata whohave expressed their un-willingness to re-appoint themselves as Auditors of the Company.
In place of existing Auditors the Audit Committee recommended M/s K. Ray & Co.(FRN 312142E) Chartered Accountants Kolkata for appointment to audit the accounts of theCompany from the conclusion of the 35th Annual General Meeting up to the conclusion of the40th consecutive Annual General Meeting (subject to ratification by the members at everysubsequent AGM). As required under the provisions of Section 139 142 & 143 of theCompanies Act 2013 the Company has obtained written confirmation under Rule 4 of theCompanies (Audit and Auditors) Rules 2014 from M/s. K. Ray
& Co.; that they are eligible for appointment as auditors and are not disqualifiedfor appointment under the Companies Act 2013 the Chartered Accountants Act 1949 or therules and regulations made there-under.
The proposed appointment is as per the term and within the limits laid down by or underthe authority of the Companies Act 2013 and that there are no proceedings pending againstthem or any of their partners with respect to professional conduct.
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 as Annexure II.
The Company has appointed M/s. Supratim Roy Chowdhury & Co. Chartered Accountants(FRN -326636E) as Internal Auditors of the Company.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return for the financial year ended 31st March 2017 made under the provisionsof Section 92(3) of the Act is attached as Annexure III to this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thesame is not applicable to the Company as none of employee is drawing remuneration inexcess of the limits set out in the said rules and thus no disclosure has been provided inthis Annual Report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 by way of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2016 dated June 30 2016 ("Amended ManagerialRemuneration Rules 2016") the report is not applicable to the Company.
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 investment 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 earned $ 63954/- i.e. equivalents to Rs 4284918/- during the year buthas not used any foreign exchange during the year 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
As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company s Auditorsconfirming compliance forms an integral part of this Report.
Statements in this Directors Report and Management Discussion and Analysis describingthe Company s objectives projections estimates expectations or predictions may beforward-looking statements within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed 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.
| ||By order of the Board |
|Registered Office : ||For Khoobsurat Limited |
|7-A Bentinck Street 3rd Floor ||Sd/- Goutam Bose |
|Kolkata-700 001 ||(DIN : 02504803) |
|Kolkata August 26 2017 ||Managing Director |