To the Members
We have pleasure in presenting Sixth Annual Report of PDS Multinational FashionsLimited (the"Company") together with the audited financial statements for thefinancial year ended March 31 2017.
Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibility Statement your Directors state that:
a) in the preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
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 31stMarch 2017 and of the profit 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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the Directors have prepared the annual accounts on a going concernbasis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
During the year under review your Companys financial summary is as under: (Rs. inCrore)
| ||Consolidated ||Standalone |
|Particulars ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Income from opera- tions ||4616.01 ||4276.77 ||13.39 ||24.90 |
|Other Income ||14.44 ||31.25 ||0.07 ||0.11 |
|Profit before Tax ||43.50 ||43.73 ||0.74 ||(0.40) |
|Provision for Tax ||5.07 ||0.66 ||0.23 ||(0.54) |
|Provision for Bad debt ||0.00 ||4.83 ||0.00 ||0.42 |
|Profit After Tax ||14.30 ||27.91 ||0.51 ||0.14 |
|EPS (in Rs.) ||5.49 ||10.71 ||0.19 ||0.05 |
FINANCIAL PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS Consolidated
On Consolidated basis the total revenue for Financial Year 2016-17 was at Rs. 4630.45Crore as against Rs. 4308.02 Crore in Financial Year 2015-16.
The Profit after Tax in FY2016-17 was at Rs 14.30 crore as compared to Rs. 27.91 Crorein Financial Year 2015-16.
On Standalone basis the Total Revenue for Financial Year 2016-17 stood at Rs.13.46Crore as against Rs. 25.01 Crores in Financial Year 2015-16.
The Profit after Tax in FY 2016-17 was at Rs 0.51 Crore as compared to Rs. 0.14 Crorein Financial Year 2015-16.
STATE OF THE AFFAIRS OF THE COMPANY
Details of State of the Companys Affairs are given in the Management Discussionand Analysis.
DIVIDEND & RESERVES
Your Directors did not recommend any dividend for the financial year 2016-17 and notproposed to carry any amounts to reserves.
CHANGE IN THE NATURE OF THE BUSINESS
During the year under review there was no change in the nature of the business of theCompany.
Your Company has not accepted any deposits from the Public or Shareholders during theyear nor has any unclaimed or unpaid deposits at the end of the financial year 2016-17.
During the year five (5) meetings of the Board of Directors were held. The details ofwhich are given in the Corporate Governance report that forms part of this Annual Report.The intervening gap between any two meetings was within the period prescribed by theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation2015.
The Company has in place the Committees (s) as mandated under the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation2015. There are currently three (3) Committees of the Board namely:
Nomination & Remuneration Committee
Stakeholders Relationship Committee
Details of the Committees alongwith their composition and meeting held during the yearare provided in the Corporate Governance Report which forms part of this report.
The Audit Committee comprises three Independent Directors namely Dr. A P BhupatkarChairperson Mr. Ashok Kumar Sanghi & Mr.AshokKumarChhabraandonenon-executiveDirectorMr.DeepakSeth as Members of the Committee. All the recommendations made by the Audit Committeewere accepted by the Board.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company had already constituted Nomination and Remuneration Committee as requiredunder Sub-Section (1) of Section 178 of the Companies Act 2013 comprising threeIndependent Directors Mr. Ashok Kumar Sanghi Chairperson Mr. Ashok Kumar Chhabraand Dr. A P Bhupatkar Members of the Committee. The Company has also formulated a Policyon directors appointment and remuneration including criteria for determiningqualifications positive attributes independence of a director and other matters providedunder Section 178 (3) of the Companies Act 2013 and the same is annexed as Annexure-Iwith this report.
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 under the Companies Act 2013 andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations").
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 thecommittees was evaluated by the Board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc. The Board and the nomination and remuneration committee reviewedthe performance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the chairman was also evaluated on the key aspectsof his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated. None ofthe Independent Directors are due for re-appointment.
DECLARATION FROM THE INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent director underSection 149 (7) of the Companies Act 2013 that he meets the criteria of independencelaid down in Section 149 (6) of the Companies Act 2013 and Regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Pallak Seth Director would retire by rotation at theensuing Annual General Meeting and being eligible for re-appointment.
During the year Mr. Chandra Kishor Jha Company Secretary and Key Managerial Personnelof the Company has resigned with effect of 29th September 2016. In Accordance with theapplicable provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 the Board has appointed Mr. B. Chandra SekharaReddy who is the head of Legal and Secretarial Department as the Company Secretary andKey Managerial Personnel of the Company with effect from 14th November 2016.
In terms of Section 139 of the Companies Act 2013 M/s S. R. Dinodia & Co. LLPChartered Accountants (Regn. No. 001478N/ N500005) New Delhi were appointed by theMembers in its 3rd Annual General Meeting held on 26th September 2014 as StatutoryAuditors of the Company for a period of five years. A Resolution for ratification of theirappointment as Statutory Auditors is proposed in the Notice calling the 6th Annual GeneralMeeting.
The Auditors Report for financial year 2016-17 does not contain anyqualification reservation or adverse remark or disclaimer. The Auditors Report isenclosed with the financial statements in this Annual Report.
The Board has appointed Mr. R. Hariprasad Reddy Practicing Company Secretary(Membership No. FCS 8477) proprietor of M/s. RHR & Associates to conduct SecretarialAudit of the Company for the financial year 2016-17 as required under Section 204 of theCompanies Act 2013 and Rules thereunder. The Secretarial Audit Report does not containany qualification reservation or adverse remark or disclaimer. The Secretarial AuditReport for the financial year 2016-17 forms part of the Annual Report as Annexure-IIto the Boards Report.
COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE
As required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors certificate on corporate governance is annexed as Annexure-IIIto the Boards Report.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Companys internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. Internal controls are reviewedperiodically by the internal auditor and report significant audit observations if anyand follow up actions if any to the Audit Committee. The Audit Committee reviews theadequacy and effectiveness of internal control systems commensurate with the nature of thebusiness.
Your Company has taken necessary steps for risk management including identifying riskwhich may threaten the existence/ operations of the Company.
Report on Corporate Governance along with the certificate of the Auditors confirmingcompliance of conditions of Corporate Governance as stipulated under Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forming part ofthe Annual report.
MANAGEMENT DISCUSSION AND ANALYSIS
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (3) of the Listing Regulations is presented in a separatesection under the head "Management Discussion and Analysis" forming part of theAnnual Report.
As per Section 177 of the Companies Act 2013 and Regulation 22 of the SEBI (ListingObligations and Required Disclosures) Regulation 2015 a comprehensive Whistle Blower andVigil Mechanism Policy has been approved and implemented within the Organization. Thepolicy enables employees and directors to report instances of the unethical act orsuspected incident of fraud or violation of Companys code of conduct or ethicspolicy. The copy of policy is uploaded on the website of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 are not applicable to yourCompany.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act 2013 and applicable Accounting Standards (AS)the audited consolidated financial statement is provided in the Annual Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review companies listed below have become or ceased to beCompanys subsidiaries joint ventures or associate companies.
Companies which have become Subsidiaries during the financial year 2016-17.
1. Sure Investments Limited
2. Casa Forma London Limited
3. Blueprint Design Limited
4. Design Arc UK Limited
5. Grupo Sourcing Limited
6. Fareast Vogue Limited
7. PDS Far-east Limited
8. Kindred Brands Limited
9. Styleberry Limited
10. PDS Global Investments Limited 11. Green Smart Shirts Limited 12. Digital EcomTechno Private Limited
Companies which ceased to be subsidiaries during the financial year 2016-17
Grand Pearl Trading Co. Ltd. (Hangzhou)
Nor France SAS
There is no change in status of Associate Company and Joint Venture.
A statement containing the salient features of the financial statement of oursubsidiaries associates and joint venture companies as per the Companies Act 2013 in theprescribed Form AOC-1 is appended as Annexure-IV to the Boards Report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on website www.pdsmultinational.com
The Policy of determining material subsidiaries as approved may be accessed on theCompanys website at http://www. pdsmultinational.com/code-conduct/
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review your Company neither gave any Loans guarantees nor madeinvestments which are covered under Section 186 of the Companies Act 2013
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF THE REPORT
There were no Material Changes and Commitments affecting Financial Position between theend of the financial year and Date of the Report.
EXTRACTS OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as required under Section 92(3) of theCompanies Act 2013 read with Companies (Management & Administration) Rules 2014 isannexed as Annexure-V to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Particulars of Contracts or Arrangements with Related Parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is annexed as Annexure-VIto the Board report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as
DISCLOSURE OF REMUNERATION UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITHRULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
(i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the Financial Year 2016-17:
Except the remuneration paid to Managing Director and sitting fees paid to theIndependent Directors none of the other directors drawing remuneration from the Company.
The ratio of the remuneration of Mrs. Payel Seth Managing Director to the medianremuneration of the employees is 8:1.
(ii) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the Financial Year 2016-17 are as under: Rs. in lacs
|Sl. No. ||Name of Director/KMP and Designation ||Remuneration for FY 2016-17 ||% Increase in remuneration in 2016-17 |
|1. ||Mrs. Payel Seth Managing Director ||36.00 ||0.00 |
|2. ||Mr. Omprakash Makam S. Setty Chief Financial Officer ||82.19 ||0.35 |
|3. ||Mr. Chandra Kishor Jha Company Secretary1 ||4.9 ||14.40 |
|4. ||Mr. B. Chandra Sekhara Reddy Company Secretary2 ||23.90 || |
1Mr. Chandra Kishor Jha ceased to be Company Secretary & Key Managerial Personnelw.e.f. 29th September 2016.
2Mr. B. Chandra Sekhara Reddy appointed as Company Secretary & Key ManagerialPersonnel w.e.f. 14th November 2016.
(ii) The percentage increase in the median remuneration of employees of the Company forthe financial year 2016-17.
The median remuneration of the employees in the Financial Year 2016-17 was increased by14.5% as compared to the financial year 2015-16.
(iii) The number of permanent employees on the rolls of company as on 31stMarch 2017.
There were 59 permanent employees on the rolls of the Company as on 31st March2017.
(iv) The average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year i.e. 2016-17 and its comparisonwith the percentile increase in the managerial remuneration and justification thereof andpoint out if there are any exceptional circumstances for increase in the managerialremuneration.
The average percentile increase in the Salaries of employees excluding the managerialpersonnel for financial year 2016-17 was 8%. average percentile increase in theremuneration of managerial personnel in the last financial year was 0.00%.
Note: There is no increase in the remuneration of managerial personnel.
(v)Particulars of employees posted and working in a country outside India not beingdirectors or their relatives drawing more than sixty lakh rupees per financial year orfive lakh rupees per month.
None of the employees posted and working outside India not being directors and theirrelatives drawing more than sixty lakh rupees per year or five lakh rupees per month.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 is annexed as Annexure-VIII to this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Companys operations in future.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
At present your Company did not have any funds lying unpaid or unclaimed for a periodof seven years. Therefore there were no funds which were required to be transferred toInvestor Education and Protection Fund (IEPF).
REGISTRAR AND SHARE TRANSFER AGENT
Link Intime India Pvt. Ltd is Companys Registrars and Share Transfer Agent (RTA)as common agency both for physical and demat shares as required under Securities Contract(Regulation) Act 1956. The contact detail of RTA forms part of the Corporate GovernanceReport.
Your Company started a sustainability initiative with the aim of going green andminimizing our impact on the environment. We are publishing only the statutory disclosuresin the print version of Annual Report. Additional information is available on our websitewww.pdsmultinational.com Electronic copies of the Annual Report 2016-17 along with Noticeof the 6th Annual General Meeting are sent to all members whose email addresses areregistered with the Company/RTA/Depository Participant(s). For members who have notregistered their email addresses physical copies of Annual Report 2016-17 and Notice of6th Annual General Meeting are sent in the permitted mode. Members requiring physicalcopies can send a request to the Company.
The Directors of your Company are thankful to Bankers Business Associates CustomersMembers; Government Bodies & Regulators for the continuous support received from themand place on record the employees appreciation for the sincere services rendered by themat all level.
| ||For and on behalf of the Board || |
| ||PDS MULTINATIONAL FASHIONS LIMITED || |
| ||(DEEPAK SETH) ||(PAYEL SETH) |
| ||DIRECTOR ||MANAGING DIRECTOR |
| ||DIN:00003021 ||DIN:00003035 |
|Place: Gurgaon || || |
|Date: May 29 2017 || || |