Khyati Multimedia Entertainment Ltd.
|BSE: 531692||Sector: Media|
|NSE: N.A.||ISIN Code: INE593B01030|
|BSE LIVE 13:49 | 03 Oct||0.50||
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Khyati Multimedia Entertainment Ltd. (KHYATIMULTIMED) - Director Report
Company director report
Your Directors are pleased to submit herewith their report together with the auditedstatement of accounts for the 22nd financial year ended 31st March2016.
[Amount in Rs.]
During the year under review the Company has earned total income from other sources ofRs. 1290822 /- (Previous Year of Rs. 92350) from business. After deducting alladministrative expenses and depreciation and necessary adjustments for taxation etc. thecompany has incurred a net loss of Rs. (676474) /- (Previous of Rs (1541923)/-).
Due to loss your Directors have not recommended dividend for the financial year2015-16
Khyati Multimedia Entertainment Limited has involved in the area of high-qualityDesktop Publishing imaging Corporate Presentations creative designing graphicdesigning and multimedia software development and is also engaged in the business ofletting out vehicle.
There was no change in the nature of any of the business activity during the year.
DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES
The company does not have holding or subsidiary companies during the year and no othercompany has become holding / subsidiary/ joint venture.
The Company has not accepted any public deposit during the year under review and noamount against the same was outstanding at the end of the year.
In conformity with provision of Clause 32 in the Listing Agreement (s) the Cash FlowStatement for the year ended 31.03.2016 is annexed hereto. The equity shares of theCompany are listed on the BSE Ltd.
The Company has paid listing fees for the year 2016-17 to above stock exchanges.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.
As required under Section 134 (3) (m) of the Act read with Rule 8 of The Companies(Accounts) Rules 2014 particulars relating to conservation of Energy R & DTechnology absorption and foreign Exchange earnings / outgo are separately provided in theannexure to this report
DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIESACT 2013
The Company is not entering into related parties transactions for sale/purchase ofgoods or services at preferential prices. However all the transactions in the nature ofsales/purchase of goods or services are made on arms length basis except the salary paidto employees and director and key managerial person. However a lease rent is being paid toMrs. Jignaben K Patel as per the valid lease rental agreement which will be paid forfurther 3 years up to 31.03.2018.. The same were reported to the Board at every meetingand Board took a note of the same and approved. Other details for inter corporatefinancial transactions or remuneration and other benefits paid to directors theirrelatives key managerial personnel etc. are given in the notes to the accounts vide noteno. 31 as per requirements of AS 18.
The Company has formulated various other policies like Risk Management PolicyEvaluation of Board Performance Policy and CSR Policy etc. etc. All such policies weredocumented and adopted by the Board and also uploaded all the policies applicable at thewebsite of the Company www.khyatimultimedia.com.
Full details of Risk Management Policy are given in the Corporate Governance Reportunder the head Whistle Blower Policy.
As the Company is loss making one the provisions related to CSR is presently notapplicable to the Company.
Regarding Performance Review of each of the member of the Board and also theperformance of the various Committees and the Board the Company has adopted the ModelCode of Conduct for Independent Directors Key Managerial Personnel as prescribed inSchedule IV to the Companies Act 2013 and also as prescribed in the SEBI (InsiderTrading) Regulations. The Company strictly follows the procedure to obtain necessarytimely declarations from each of the directors and key managerial personnel from time totime.
DETAILS OF LOANS GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013
During the year under review the Company has not made any inter corporate loansinvestments given any corporate guarantee to any other body corporate subsidiaryassociate or any other company. However the company has borrowed a sum of Rs.2 500000from Mr. Kartik J.Patel Managing Director as a unsecured loan at 0% Interest for dealingwith the day to day fund requirement of the company. The Company has also sold its Equityinvestment of M/s Kome on Communication Limited and M/s Somplast Leather IndustriesLimited as the Listing of both the companies has suspended and there is no liquidity forrealization of these investments and get released of the funds of the company. It is alsonecessary for the company to sell this investment and raised the required financial cashresources on an urgent basis
The Board of Directors supports to maintain the highest standards of corporategovernance and adhere to the corporate governance requirements set out by SEBI. Inaddition to the basic governance issues the Board lays strong emphasis on transparencyaccountability and integrity. The Report on corporate governance as stipulated underClause 49 of the Listing Agreement forms part of the Annual Report. The requisitecertificate from the Auditors of the Company confirming compliance with the conditions ofcorporate governance as stipulated under the aforesaid Clause 49 is attached to theReport on corporate governance.
BOARD OF DIRECTORS
Details about the Board of Directors Meetings are attached to the Report on CorporateGovernance. Further Kartik J. Patel will be the Director retiring by rotation and beingeligible offers himself for re-appointment at the ensuing Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Clause 49 of theListing Agreement with the Stock Exchanges.
DECLARATION BY INDEPENDENT DIRECTORS:
(Pursuant to Provisions of section 149(6) OF the Companies Act 2013)
All the Independent Directors of the Company do hereby declare that:
(1) All the Independent Directors of the Company are neither Managing Director nor aWhole Time Director nor a Manager or a Nominee Director.
(2) All the Independent Directors in the opinion of the Board are persons of integrityand possesses relevant expertise and experience.
(3) Who are or were not a Promoter of the Company or its Holding or subsidiary orassociate company.
(4) Who are or were not related to promoters or directors in the company its holdingsubsidiary or associate company.
(5) Who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediately precedingfinancial years or during the current financial year.
(6) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhsrupees or such
higher amount as may be prescribed whichever is lower during the two immediatelypreceding financial years or during the current financial year
(7) Who neither himself nor any of his relatives
(a) Holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of threefinancial years immediately preceding the financial year in which I\he is proposed to beappointed.
(b) Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial years in which he is proposed to beappointed of
(i) A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; OR
(ii) Any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm;
(iii) Holds together with his relatives two per cent or more of the total voting powerof the company; OR
(iv) Is a Chief Executive or director by whatever name called or any non-profitorganization that receives twenty five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; OR
(v) Who possesses such other qualifications as may be prescribed.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134 Clause (C) of Sub-Section (3) of the Companies Act 2013 inrelation to financial statements for the year 2014-15 the Board of Directors state:
a) In the preparation of the annual accounts for the financial year ended 31stMarch 2016 as far as possible and to the extent if any accounting standards mentionedby the auditors in their report as not complied with all other applicable accountingstandards have been followed along with proper explanation relating to material departure;
b) The Directors have 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 at the end of the financial year andprofit and loss account of the Company for that period;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The Directors have prepared the annual accounts on a going concern basis; and
e) The directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 (1)
In compliance with Section 178 (1) as also in compliance with Clause 49 of the ListingAgreement the Board of Directors do hereby declare that:
a. The Company has proper constitution of the Board of Directors including independentdirectors in proportion as per requirement of clause 49 of the Listing Agreement. Howeverthe Company is still in process for appointing a suitable person as woman director asrequired under Section 149 of the Companies Act 2013.
b. The Company has constituted Nomination and Remuneration Committee StakeholdersRelationship Committee Audit Committee as per requirements of the Clause 49 of theListing Agreement and provisions of the Companies Act 2013.
c. The Company has the policy for selection and appointment of independent directorswho are persons of reputation in the society have adequate educational qualificationsufficient business experience and have integrity & loyalty towards their duties.
d. The Company pays managerial remuneration to its Managing/Whole Time Directors basedupon their qualification experience and past remuneration received by them from theirprevious employers and companys financial position.
e. The Independent Directors are paid sitting fee for attending Board and othercommittee meetings as decided by the Board from time to time. This sitting fee is decidedconsidering the financial position of the company.
f. The Company is not paying any commission on net profits to any directors.
g. During the year the Board has met 4 times during the year. The details of presenceof every director at each meeting of the Board including the meetings of the Committeesif any are given in the reports of the Corporate Governance.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:
The details in respect of internal financial control and their adequacy are included inManagement Discussion and Analysis Report which forms part of this report.
SYSTEM OF PERFORMANCE EVALUATION OF THE BOARD INDEPENDENT DIRECTORS AND COMMITTEES ANDINDIVIDUAL DIRECTORS
1. The Board makes evaluation of the effectiveness and efficiency of every individualdirectors committee of directors independent directors and board as a whole.
2. For these purpose the Board makes evaluation twice in a year on a half yearly basis.
3. The performance of individual directors are evaluated by the entire Board excludingthe Director being evaluated on the basis of presence of every directors at a meetingeffective participation in discussion of each of the business of agenda for the meetingsfeedback receives from every directors on draft of the minutes and follow up for actiontaken reports from first line management.
4. Effectiveness and performance of various committees are evaluated on the basis ofthe scope of work assign to each of the committees the action taken by the committees arereviews and evaluated on the basis of minutes and agenda papers for each of the committeemeetings.
5. The performance of independent directors are evaluated on the basis of theirparticipation at the meetings and post meeting follow up and communication from each ofsuch independent directors.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES. 2014.
Total managerial remuneration paid to each of them during the current year and previousyear are as under:
I. The Percentage of the remuneration of each director to the median remuneration ofthe employees of the company for the financial year:
II. The percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear:
There were no increase in remuneration.
III. The number of permanent employees on the rolls of company:
There were no other employees other than the Key Managerial person and directors whichare on the pay rolls of company.
IV. The explanation on the relationship between average increase in remunerationand company performance;
NOT APPLICABLE as there was no substantial increase in remuneration of any employeeduring the year. The increase was only due to increase in inflation index.
V. Comparison of the remuneration of the Key managerial personnel against theperformance of the company :
The KMP i.e. Whole time Directors and Financial Managers does not receive anyremuneration apart from the Company Secretary who has been paid a yearly Remuneration ofRs.90000/- per annum.
VI. Variations in the market capitalization of the company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with the last public offer in case oflisted companies and in case of unlisted companies the variations in the net worth ofthe company as at the close of the current financial year and previous financial year;
Closing Market Price of shares of Company as on 31/03/2015: Rs. 0.88 /-
Closing Market Price of shares of Company as on 31/03/2016: Rs. 0.00/- (Not traded inthe month of March 2016)
Earning Per share for the financial year ended on 31/03/2015:Rs.(0.14)/-
Earning per share for the financial year ended on 31/03/2016: Rs. (0.06)/-
Regarding other information like Variations in the market capitalization of thecompany price earnings ratio as at the closing date of the current financial year andprevious financial year and percentage increase over decrease in the market quotations ofthe shares of the company in comparison to the rate at which the company came out with thelast public offer in case of listed companies is not given herewith since Company had madeIPO more than 5 Years before and there was no substantial variation in the market price ofshares of the company. Companys EPS is negative and hence PE Ratio is not given.
VII. Comparison of the remuneration of each key managerial personnel against theperformance of the company;
As the company is paying minimum managerial remuneration to its managerial personneland the Company is the loss making one the comparison of remuneration of each of the KMPwith performance of the company is not comparable.
Since Managing director and Executive Directors are being not paid minimum remunerationand other KMPs are getting remuneration as per prevailing industry norms it is notpossible to compare remuneration with the performance of the company.
VIII. The key parameters for any variable component of remuneration availed by thedirectors;
IX. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year;
There were No employees who are receiving remuneration in excess or higher than theremuneration of Director or Key Managerial Personnel.
X. Affirmation that the remuneration is as per the remuneration policy of theCompany.
All remuneration of the Employees and directors are paid as per remuneration policy ofthe Company.
PARTICULARS OF THE EMPLOYEES
Particulars of the employees as required under provisions of Section 197 (12) of theAct read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are not attached with this reportsince there was no employee who was in receipt of remuneration in excess of Rs.500000per month during the year or Rs. 60 Lacs per annum in the aggregate if employed part ofthe year.
M/s. D.J.N.V & CO Chartered Accountants an Auditors firm are statutory auditorsof the company since 2008-09. As per Rule 6(3) of the Companies (Audit and Auditors) Rules2014 they are eligible to continue as the statutory auditors of the company for financialyears 2014-15 2015-16 2016-17 and 2017-18. Accordingly Statutory Auditors of thecompany have given their letter of consent and confirmation under section 141(1) theCompanies Act 2013 for their appointment as Statutory Auditors of the Company up to thefinancial year 2017-18 hence the Board has now proposed to appoint the Statutory Auditorsfor a period of up to 2017-18. Necessary Resolution for their appointment as the StatutoryAuditors and fixing their remuneration is proposed to be passed at the Annual GeneralMeeting.
The Company has appointed an Independent firm of Chartered Accountants to act as anInternal Auditor as per suggestion of auditors and recommendation of the audit Committeein order to strengthen the internal control system for the Company.
The Company has appointed M/s. KAMLESH SHAH & SHAH CO. as the secretarial auditorfor the financial year 2015-16. They have given their report in the prescribed form MR-3which is annexed to this report as an ANNEXURE.
OBSERVATION OF THE SECRETARIAL AUDITOR
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non- Executives Directors and Independent Directors and the womandirector. Company Secretary has resigned w.e.f 1.05.2015 and Company has already appointeda new Company secretary w.e.f 30.05.2015
EXPLANATION TO THE AUDITORS' REMARKS
The Directors submit their explanations to the various observations made by thestatutory auditors in the report are as under for the year 2015-16
ANNEXURE TO INDEPENDENT AUDITORS' REPORT - PARA 7 (b)
The Company has not deposited the Provident fund amounting to Rs 200750/- in therespective account for which it was clarified that the matter is under dispute underProvident fund Appellate Tribunal New Delhi Which has remanded the case to APFCAhmedabad after the final satisfaction of the dispute it will be deposited. The CIT(Appeals) has charged penalty under Section 271(1)(c) for Asst. Year 2006-2007 of Rs857298/- There are no other observations made by the Auditors in their report.
In addition to the above clarifications the notes to the Accounts are self explanatoryand give suitable explanation to qualifications in the Auditors Report.
MATERIAL CHANGES / INFORMATION:
1. No material changes have taken place after the closure of the financial year up tothe date of this report which may have substantial effect on the business and financial ofthe Company. However net worth of the company has been completely eroded
2. No significant and material orders have been passed by any of the regulators orcourts or tribunals impacting the going concern status and companies operations in future.
Your Directors place on record their sincere appreciation for the valuable support andco-operation as received from government authorities Financial Institutions and Banksduring the year. The Directors are also thankful for the support extended by CustomersSuppliers and contribution made by the employees at all level. The Directors would alsolike to acknowledge continued patronage extended by Companys shareholders in itsentire endeavor.