Your directors have pleasure in presenting their Twenty-Third Annual Report onthebusiness and operations of the company together with the Audited Statement of Accountsfor the year ended 31st March 2016.
During the year under review performance of your company was as under:
(Rupees in Lacs)
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Turnover ||89.26 ||1035.12 |
|Profit/(Loss) before taxation ||4.11 ||4.12 |
|Less: Tax Expense ||1.30 ||1.27 |
|Profit/(Loss) after tax ||2.81 ||2.85 |
|Add: Balance B/F from the previous year ||4.81 ||1.96 |
|Balance Profit / (Loss) C/F to the next year ||7.65 ||4.81 |
State of Companys Affairs and Future Outlook
Navketan Merchants Limited was incorporated in the year 1994 West Bengal and has beenengaged in trading of mainly yarn and sarees. The Company was already listed on CalcuttaStock Exchange Ltd and it got listed on BSE Ltd on 30thDecember 2015.
The Board is positive about the future growth and expects to increase the growth ratein the upcoming financial years.
Change in nature of business if any
There has been no change in the nature of business of the company during the year andthe Company continues to carry on with its existing business.
Details of Subsidiary Joint Venture or Associates
The Company had aSubsidiary Company namely Chaturvyuh Broking Solutions Limited.However it ceased to be subsidiary with effect from 30th September 2015.Further there are no Associates or Joint Ventures as on March 31 2016.
With the view to conserve the resources of the company the directors have notrecommended any dividend during the year.
Amounts Transferred to Reserves
The Board of the company has decided to retain its profit in its surplus account only.
Changes in Share Capital if any
There have been no changes in the share capital of the company during the financialyear ended 31st March 2016.
Disclosure regarding Issue of Equity Shares with Differential Rights
During the Financial Year 2015-2016 the Company has not issued any equity shares withdifferential rights.
Disclosure regarding issue of Employee Stock Options
During the Financial Year 2015-2016 the Company has not issued any Employee StockOptions.
Disclosure regarding issue of Sweat Equity Shares
During the Financial Year 2015-2016 the Company has not issued any Sweat EquityShares.
Extract of Annual Return
As required under the Companies Act 2013 an extract of Annual Return in form MGT 9for the Financial Year ended 2015-2016 is attached with this report as Appendix I.
Performance and Financial Position of Subsidiaries and Associates
The Company had a Subsidiary Company namely Chaturvyuh Broking Solutions Limited.However it ceased to be subsidiary with effect from 30th September 2015. Pursuant toprovisions of Section 129(3) of the Act a statement containing salient features of thefinancial statements of the Companys subsidiary for half-year ended 30th September2015 in Form AOC-1 is attached to the financial statements of the Company as Appendix II.
Further pursuant to the provisions of section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiary are also available on the website ofthe Company.
Secretarial Audit Report
The Secretarial Audit Report issued by Company Secretary in Practice has been annexedto this Report as Appendix III.
The Committee met four times during the year the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The Committee as on 31stMarch 2016 comprises of Mr Amit Kumar Mishra Mr Raj Kumar Agarwal and Mr OmprakashLahoti. All recommendations made by the Audit Committee during the year were accepted bythe Board.
At the 21st Annual General Meeting held on 30th September 2014M/s Gora & Co. Chartered Accountants were appointed as Statutory Auditors of theCompany to hold office till the conclusion of the 26th Annual General Meetingto be held in the calendar year 2019 subject to ratification by the shareholders at eachAnnual General Meeting. Appointment of M/s Gora & Co. Chartered Accountants wasratified by the shareholders at the 22nd Annual General Meeting held on 30thSeptember 2015 till the conclusion of the 23rdAnnual General Meeting.
Explanation to Auditors Remarks
The Auditors report and Secretarial Auditors Report does not contain anyqualifications reservations or adverse remarks. The Auditors report and SecretarialAuditors Report is enclosed with the financial statements in this Annual Report.
Material Changes Affecting the Financial Position of the Company
There were no material changes affecting the Financial Position of the company sinceits last balance sheet date which could have affected the Company.
Particulars of Loan Guarantees and Investments under Section 186
These details have been provided in the Financial Statements of the Company pursuant toSection 186(4).
Particulars of Contracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 for the Financial Year 2014-15 in the prescribedformat AOC 2 is attached with this report as Appendix IV.
During the year under review the company has not accepted or renewed any deposits undersection 73 to 76 of the Companies Act 2013 read with Companies (Acceptance of Deposits)Rules 2014.
Conservation of Energy Technology Absorption
The operations of the Company are not energy intensive. However adequate measures havebeen taken to ensure the use of energy-efficient equipments which are environmentfriendly.
|Foreign Exchange Earnings and Outgo || |
|Foreign Exchange Earnings ||Nil |
|Foreign Exchange Outgo ||Nil |
Risk Management Policy
The Board has approved a Risk Management Policy in commensuration to the size andnature of the business which includes adherence to general financial discipline and checksto safeguard unauthorized use of company assets and finance. The same are reviewed andrevised as per the needs to minimize and control the risk. The Risk Management Policy ofthe Company's can be accessed at www.navketanmerchants.com
Details of Directors and Key Managerial Personnel
The induction of new personnel in the Board of Directors of the company was made inaccordance with the recommendation made by the Nomination and Remuneration committee ofthe Board. There have been the following changes in the Board of Directors of the companyduring the financial year ended 31st March 2016:
1. Resignation of Ms Ankita Jhunjhunwala (DIN:05275807)as Managing Director of thecompany w.e.f 16th June 2015.
2. Cessation of Mr Amitava Dutt (DIN:06883475) asNon-Executive Independent Director ofthe company w.e.f 29th August 2015.
3. Appointment of Ms Anshu Diwan(DIN07274236) as Non-Executive Independent AdditionalDirector of the company w.e.f 29th August 2015 who was subsequently appointedas Non-Executive Independent Director in theAnnual General Meeting held on30thSeptember2015.
4. Appointment of Mr Omprakash Lahoti(DIN02864453) as Managing Director of the companyw.e.f 27th July 2015 which was subsequently approved by the shareholders inthe Annual General Meeting held on 30thSeptember 2015.
5. Appointment of Mr Amit Kumar Bandyopadhyay (DIN:00424073) as Non-Executive Directorof the company by the shareholdersin the Annual General Meeting held on 30thSeptember2015.
Number of Board Meetings
The Board met 6 (six) times during the year the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013 andRegulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Details of significant & material orders passed by the regulators or courts ortribunal
No significant or material orders were passed by the regulators or court or tribunalagainst the company.
The company has adopted best practices for fraud prevention and reporting. No fraud onor by the company has been reported by the statutory auditors.
Voluntary Revision of Financial Statements or Boards Report
There has not been any such revision during the year under report.
Receipt of any commission by MD / WTD from the Company or for receipt of commission /remuneration from its Holding or subsidiary
The Managing Director of the company has not received any commission / remunerationfrom the Company or its Subsidiary during the year under review.
Declaration by Independent Director
The company has received necessary declaration from independent directors under section149(7) of the Companies Act 2013 that they meet the criteria of independence as laid downin section149(6) of the Companies Act 2013 and rules made there under and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) 2015.
Corporate Social Responsibility (CSR) Policy
Since any of the thresholds under section 135 of the companies Act2013 were nottriggered during the year under review so the Company is not required to frame a CSRPolicy or comply with any other requirements as mentioned under section 135.
Disclosure on Establishment of a Vigil Mechanism
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for: (a)adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b)direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases.
The Company has taken adequate steps to ensure that all mandatory provisions of"Corporate Governance" as provided in Regulations 17 to 27 of SEBI (ListingObligations and Disclosure Requirements) 2015 as applicable are duly complied.
The Report on Corporate Governance as per the requirement of SEBI (Listing Obligationsand Disclosure Requirements) 2015 forms part of this report as Appendix V.
Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
The Company has zero tolerance towards any kind of harassment and the Company has lessthan 10 (ten) employees and no cases of harassment were filed or reported during the yearunder report.
Criteria for Determining Qualifications Positive Attributes and Independence of theDirector
The Nomination and Remuneration Committee has formulated the criteria for determiningqualifications positive attributes and independence of Directors in terms of provisionsof section 178(3) of the Act and Part D of Schedule II of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Nomination and remuneration committee (NRC)identifies persons whoare qualified to become directors in accordance with the criterialaid down. The NRC review the composition and diversity of Board keeping in view therequirement of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and recommend to the Board appointment/ reappointment ofeligible candidates including their terms of appointment and remuneration.
Annual Evaluation of Board Performance and Performance of its Committees and Directors
The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance. The aspects covered in the evaluation included the contribution to andmonitoring of corporate governance practices participation in the long-term strategicplanning and the fulfillment of Directors' obligations and fiduciary responsibilitiesincluding but not limited to active participation at the Board and Committee meetings.
Further the Independent Directors at their meeting reviewed the performance of Boardand of Non Executive Directors.
Nomination & Remuneration Committee Policy
The Company has duly constituted a Nomination and Remuneration Committee in compliancewith provisions of the Companies Act 2013 and Regulation 19 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Committee has also adopted aRemuneration Policy for the Directors Key Managerial Personnel and other employees.
Particulars of Employees
The information required under Section197details of Ratio of Remuneration of Directorpursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are as under:
|Sl ||Basis ||Particulars |
|No. || || |
|1 ||The ratio of the remuneration of each wholetime director or managing director to the median remuneration of the employees of the company for the financial year; ||Name of directors Ratio to the |
| || ||Median |
| || ||Ankita 485:192 |
| || ||Jhunjhunwala/Omprakash Lahoti |
|2 ||The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; ||Name of directors %increase |
| || ||Ankita - |
| || ||Jhunjhunwala/Omprakash |
| || ||Lahoti |
| || ||Henal Kothari - |
| || ||Rajan Pandey - |
|3 ||The percentage increase in the median remuneration of employees in the financial year; ||Nil |
|4 ||the number of permanent employees on the rolls of Company; ||4 excluding Key Managerial Personnel |
|5 ||The explanation on the relationship between average increase in remuneration and company performance ||The Company currently has nominal profit margin only and direct relationship between changes in remuneration viz-a-viz performance will get reflected in future years. |
|6 ||Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company; ||The Company currently has nominal profit margin only and direct relationship between changes in remuneration viz-a-viz performance will get reflected in future years. |
|7 ||Variations in the market capitalisation of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year; ||Variations in the market Capitalisation of the Company and PE Ratio: |
| || ||1. BSE Ltd || || || |
| || ||BSE ||As at 31st March 2016 ||As at 31st March 2015 ||Increase / Decrease in % |
| || ||Closing ||12.01 ||N.A. ||Nil |
| || ||Market Price || || || |
| || ||per Share (Rs.) || || || |
| || ||(04.01.2016)* || || || |
| || ||Earnings Per Share ||0.0078 ||0.0079 ||-1.27% |
| || ||Market Capitalisation ||43.31 ||N.A. ||Nil |
| || ||(Rs. In Crores)# || || || |
| || ||Price Earnings Ratio$ ||1540.85 ||N.A. ||Nil |
| || ||Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer: |
| || ||BSE ||As at 31st March 2016 ||Last Public Issue Offer Price ||Increase / Decrease in % |
| || ||Closing Market Price per Share (Rs.)(04.01.2016)* ||12.01 ||Rs 10 ||200% |
| || ||Note: || || || |
| || ||*The equity shares of the company listed at |
| || ||Bombay Stock Exchange ( BSE) dated30th December 2015 and stocks of the company traded only on 04.01.2016 in the F.Y. 2015-16. # Closing Market Price of the company dated 04.01.2016 is considered for the Calculation of $ Closing Market Price of the company dated 04.01.2016 is considered for the Calculation of Price Earnings Ratio |
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| || ||2. The company is listed at Calcutta Stock Exchange where the trading platform is non operational. |
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|8 ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; ||There was no significant increase in the salary of employee of the Company in the last financial year. Further managerial personnel have been appointed in the current financial year. The Company currently has nominal profit margin only and direct relationship between changes in remuneration viz-a-viz performance will get reflected in future years |
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|9 ||Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company. ||Name of the KMP ||% of revenue |
| || ||Ankita ||2.72% |
| || ||Jhunjhunwala/Omprakash || |
| || ||Lahoti || |
| || ||Henal Kothari ||2.69% |
| || ||Rajan Pandey ||1.34% |
|10 ||The key parameters for any variable component of remuneration availed by the directors ||NA || |
|11 ||The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; ||NA || |
|12 ||Affirmation that the remuneration is as per the remuneration policy of the company ||This is hereby confirmed that the remuneration is in accordance with the remuneration policy formulated by the Nomination and Remuneration Committee of the Board and adopted by the Board of the Company |
Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:
a) in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) 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 31st March 2016 and of the profit/loss of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
f) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
The Directors express their sincere appreciation to the valued shareholders bankersand clients for their support
|Place: Kolkata ||For and on behalf of the Board of Directors |
|Date : 26thMay 2016 || || |
| ||Omprakash Lahoti ||Amit Kumar Mishra |
| ||(Managing Director) ||(Director) |
| ||DIN:02864453 ||DIN: 03099786 |