M/s. AUSOM ENTERPRISE LIMITED
Your Directors have pleasure in submitting their 35th Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31 March 2019.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previousyear's figures is given hereunder:
| || |
(Amount in Rs )
| ||Standalone & Consolidated* |
|PARTICULARS ||Current Year ||Previous Year |
| ||31 March 2019 ||31 March 2018 |
|Net Sales /Income from Business Operations ||4414555878 ||3473309772 |
|Other Income ||104840698 ||65372891 |
|Total Income ||4519396576 ||3538682663 |
|Profit before Depreciation ||126957396 ||231251459 |
|Less: Depreciation ||52026 ||22832 |
|Profit after depreciation ||126905370 ||231228627 |
|Less: Current Income Tax ||27205822 ||36650072 |
|Less: Previous year/s adjustment of Income Tax ||Nil ||Nil |
|Less: Deferred Tax ||Nil ||Nil |
|Net Profit after Tax ||99699548 ||194578555 |
|Dividend (including Interim if any and final) ||Nil ||Nil |
|Net Profit after dividend and Tax ||99699548 ||194578555 |
|Amount transferred to General Reserve ||Nil ||Nil |
|Balance carried to Balance Sheet ||99699548 ||194578555 |
|Earnings per share (Basic) ||7.32 ||14.28 |
|Earnings per Share (Diluted) ||7.32 ||14.28 |
*The figures mentioned above remains the same for standalone statement and also forconsolidated statement and hence not separately provide for.
The company has prepared its financial statements in accordance with IND-AS.
No Dividend was declared for the financial year under review due to inadequacy ofprofit.
3. AMOUNTS TRANSFERRED TO RESERVES
During the year Company earned profit of Rs. 9.97 Cr. which has been transferredto surplus in the Statement of Profit and Loss. As a result as on 31-03-2019 the totalreserve and surplus is amounting to Rs. 65.35 Cr.
4. STATE OF COMPANY AFFAIRS AND OUTLOOK
The Company in the year under consideration has carried out activities in thefield of trading of commodities bullions shares & securities units of mutual funds.The Company has generated revenue of Rs. 441.46 Cr. as against Rs. 347.33 Cr. for theprevious year. Similarly the Company has generated net profit amounting to Rs. 9.97 Cr.(PAT) as against Rs. 19.45 Cr. (PAT) for the previous year.
The Company during current year is anticipating to achieve gross turnover of Rs. 1000Cr. and for that necessary efforts has been initiated. The management of the Company is ofthe view that the target of gross turnover will definitely be achieved and necessaryresources for the same have also been generated.
During the year under review there is no change in the nature of business.
5. NOTE ON REDEMPTION OF PREFERENCE SHARES
The Company has issued and allotted 20000000 16.5 % Cumulative RedeemableParticipating Preference Shares (CRPPS) of Rs. 10/- each aggregating to Rs. 200000000/-on 09th December 1999. As per the terms and conditions of this issue originally theCRPPS were to be redeemed in three equal installments i.e. on 9th December 2006 9thDecember 2007 and 9th December 2008. However due to inadequacy of profit the Company hadobtained consent from the Preference shareholders for extension every year which thecompany has been granted. Even due to said inadequacy of profit a term of dividend ofCRPS has been modified with effect from 01-04-2013 from 16.5% Cumulative to 1.5%Non-Cumulative Redeemable Participating preferences shares (NCRPPS).
The present financial position of the company and also tenure of CRPPS the of Board ofDirectors of the Company in their meeting held on 13th August 2019 decided to redeem thesaid shares on or before 08th December 2019 and to create Redemption Reserve incompliance with the requirements of Companies Act 2013 and Accounting Standard (IND-AS).These shares are being held by promoters of the company and are not listed at any stockexchange.
On account of redemption of CRPPS the right of existing equity shareholders andcreditors will not effect.
6. MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand the date of signing of this report.
7. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNAL
During the year no significant and material order were passed for or against theCompany by any authorities.
8. INTERNAL FINANCIAL CONTROLS
The Company has adequate internal financial control system with reference to theFinancial Statements. As a part of Internal Financial Control the company has identifiedpolicy and procedure to ensure orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
The Company has neither accepted nor renewed any deposits during the year underreview. Even the company does not have any unpaid or unclaimed deposit at the end of theyear.
10. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT TOSHAREHOLDERS
Your Company has complied with all the mandatory requirements of Corporate Governancenorms as mandated by Regulation 15(2) and 27 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. A separate report onCorporate Governance together with the Certificate regarding compliance of conditions ofCorporate Governance as stipulated under Regulation 34(3) read with Schedule V ofSEBI(LODR) Regulations 2015 forming part of this Annual Report at Annexure 'A'.
The Management Discussion & Analysis report also forms part of this Annual Reportat Annexure 'B'.
11. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility Committee incompliance with Section 135 of the Companies Act 2013 read with rules framed thereunder.
The Company for the year under consideration did not spent total amount required to bespent towards CSR activities mainly due to the reason that the Company could not identifythe appropriate activities falls under Schedule VII and CSR policy. The Company willidentify such activity in and around the Registered Office and accordingly will spend.
The Company as per Section 135(4) has adopted the CSR Policy and placed it on theCompany's website: http://ausom.in/PDF/POLICY/CORPORATE%20SOCIAL%20RESPONSIBILITY%20POLICY.pdf
The requisite details on CSR activities pursuant to Section 135 of the Companies Act2013 that with its rules is attached at Annexure- 'C'.
12. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 theCompany has constituted the Nomination and Remuneration Committee and their policy and thesame is approved by the Board. The Policy is attached at Annexure 'D'.
13. EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished at Annexure-'E'.
The same is also available on the website of the Company:
14. AUDITORS AND QUALIFICATION RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BYAUDITORS
M/s. SWETA PATEL & ASSOCIATES Chartered Accountants Ahmedabad was appointedas Statutory Auditors at the 33 Annual General Meeting of the Company held on 28thSeptember 2017 who shall hold such office for a period of 5 years until the conclusion of38th Annual General Meeting. There is no qualification or adverse remarks or disclaimersmade by the auditors in their report on the financial statements of the Company for thefinancial year ended 31 March 2019. The Statutory Auditors have not reported any incidentof fraud to the Audit Committee during the year under review.
The Board pursuant to the provisions of Section 204 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hasappointed MR. NIRAJ TRIVEDI Practicing Company Secretary to conduct Secretarial Auditfor the financial year 2018-19. The Secretarial Audit Report in prescribed format MR-3 forthe financial year ended March 31 2019 is annexed here with marked at Annexure-'F'to this Report.
As regards the observations made in the said Secretarial Audit Report in respect ofnot spending on CSR activities explanation is given in this Board Report under theheading 'Corporate Social Responsibility'.
15. WHISTLE BLOWER POLICY (VIGIL MECHANISM)
As per requirement of Section 177(9) read with Rule 7 of the Companies (Meeting ofBoard and its Powers) Rules 2014 the Company has formulated a Whistle Blower policy toestablish a vigil mechanism for Directors and Employees of the Company to report theirgenuine concern or grievances about unethical behavior actual or suspected fraud orviolation of the company's Code of Conduct. The said policy is attached at Annexure 'G'.No personnel have been denied access to the Audit Committee.
a) BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b) SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c) BONUS SHARES
No Bonus Shares were issued during the year under review.
d) EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions of Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 do not apply to our Company considering the nature of activitiesi.e. trading of commodities bullions gold jewellery shares and securities units ofmutual funds diamonds and derivatives.
During the year under consideration the Company has earned Foreign Exchange amountingearning Rs. 420.33 Cr. (Previous years Nil) and outgo is Rs. 413.92 Cr. (Previous yearsNil)
18. CHANGE IN DIRECTORS / KEY MANAGERIAL PERSONNELS
RETIREMENT BY ROTATION:
In accordance with the provisions of Section 152(6) of the Companies Act 2013 andArticles of Association of the Company Mr. Zaverilal V. Mandalia will retire by rotationat the ensuing Annual General Meeting and being eligible offers himself forreappointment. The Board recommends his reappointment.
Smt. Nirupama H. Vaghjiani Shri Hitesh B. Adeshara and Shri Ghanshyambhai B. Akbariwere appointed as Independent Non-Executive Directors of the Company by the Members at theAnnual General Meeting ("AGM") of the Company held on 29 September 2014 to holdoffice for 5 (five) years from the conclusion of 30 AGM till the conclusion of the 35 AGM.Based on recommendation of Nomination and Remuneration Committee and in terms of theprovisions of Sections 149 150 152 read with Schedule IV and any other applicableprovisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Smt. Nirupama H. Vaghjiani Shri Hitesh B. Adeshara and ShriGhanshyambhai B. Akbari being eligible for re-appointment as Independent Directors andoffering themselves for re-appointment are proposed to be re-appointed as IndependentDirectors for second term of five years from the conclusion of this AGM till theconclusion of the 40 (Fortieth) AGM.
At the Board Meeting held on 10 August 2015 Mr. Kishor P. Mandalia was re-appointed asthe Managing Director for a term of 5 years with effect from 7 August 2015. The saidappointment was confirmed by the Members at the meeting held on 29 September 2015. Thesaid term of appointment will be expired on 7 August 2020. Considering his experiencededication and leadership the Board of Directors at their meeting held on 13 August 2019with the recommendation of Nomination and Remuneration Committee has decided to re-appointMr. Kishor P. Mandalia as Managing Director and CEO for further period of 5 years w.e.f. 7August 2020. The Board recommends his reappointment.
The detailed profiles of above Directors are provided in the Notice to this report asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
During the year under review Mr. Ravikumar Pasi resigned as a Company Secretary &Compliance Officer and Key Managerial Personnel of the Company w.e.f. 31 August 2018 andMr. Yogesh Ghatge was appointed as a Company Secretary & Compliance Officer and KeyManagerial Personnel of the Company w.e.f. 8 October 2018.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 19(4) read withSchedule II Part-D of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of its committees. The performance evaluation of the Independent directors wascarried out by the entire Board. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors.
DECLARATION OF INDEPENDENT DIRECTOR(s)
The definition of Independence of Directors is derived from Regulation 16(1)(b) ofSEBI (LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013.
All the Independent Directors have submitted their declaration to the Board to theeffect that they fulfill all the requirements as stipulated in Section 149(6) of theCompanies Act 2013 so as to qualify themselves as Independent Directors under theprovisions of Section 149(7) of the Companies Act 2013 and the relevant rules.
A. Disclosure under section 197 (12) and rules 5(1) of the Companies (Appointment andRemuneration of Managerial personnel) Rules 2014.
The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under the above rules are annexed at Annexure 'H'to this report.
B. Statement of Particulars of top ten Employees Pursuant to Rule 5 (2) of theCompanies (Appointment And Remuneration of Managerial Personnel) Rules 2014
(i) Name of top 10 Employees in terms of remuneration draw: The same shall be providedon request.
(ii) Employed throughout the year and were in receipt of remuneration of not less thanRs. 1.02 Crore per annum: Not Applicable
(iii) Names of employees employed for part of the year and were in receipt ofremuneration of not less than Rs. 8.5 Lacs per month: Not Applicable.
(iv) Employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in aggregate or as the case may be at a rate which inthe aggregate is in excess of that drawn by the managing director or whole time directoror manager and hold by himself or along with his spouse and dependent children not lessthan two percent of the equity shares of the company: Not Applicable
(v) None of the Company's employees is related to any directors.
20. NUMBER OF BOARD MEETINGS
During the Financial Year 2018-19 total 5 (Five) meetings of Boards were heldrespectively on 29/05/2018 08/08/2018 08/10/2018 25/10/2018 and 07/02/2019.
21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans given investments made guarantees given and securitiesprovided under Section 186 of the Companies Act 2013 and Rules thereof along with thepurpose for which the loan or guarantee or security is proposed to be utilized by therecipient are provided in the financial statement at Note 4 12 and 36 to this FinancialStatement.
22. JOINT VENTURE
In accordance with Section 129(3) of the Companies Act 2013 the Company has preparedConsolidated Financial Statements and the same is part of this Annual Report. Further astatement containing salient features of the Financial Statements of the Company's jointventure is given in prescribed form AOC-1. The said form is attached at Annexure 'I'.
23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties under Section 188 of Companies Act 2013 and the Regulation 23of SEBI (LODR) Regulations 2015 were in the ordinary course of business and on an arm'slength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink:
The particulars in prescribed form AOC-2 is attached at Annexure 'J'.
24. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its Responsibility Statement:
a) In preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating 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 at the end of the financial year and ofthe profit 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 this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The directors had prepared the annual accounts on a going concern basis;
e) 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
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
25. RISK MANAGEMENT POLICY
Your Directors have voluntarily constituted a Risk Management Committee which has beenentrusted with the responsibility to assist the Board in (a) Overseeing and approving theCompany's enterprise wide risk management framework; and (b) Overseeing that all the risksthat the organization faces such as strategic financial credit market liquiditysecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks. A Group Risk Management Policy was reviewed andapproved by the Committee.
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organizational structures processes standards code of conduct and behavioursthat governs how the Group conducts the business of the Company and manages associatedrisks.
The Company has introduced several improvements to Integrated Enterprise RiskManagement Internal Controls Management and Assurance Frameworks and processes to drive acommon integrated view of risks optimal risk mitigation responses and efficientmanagement of internal control and assurance activities. This integration is enabled byall three being fully aligned across Group wide Risk Management Internal Control andInternal Audit methodologies and processes.
26. REPORT ON THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSEL) ACT 2013.
In terms of Section 22 of the SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSEL) ACT 2013 we report that during 2018-19 no case has beenfiled under the said act.
27. CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER SEXUAL HARRESSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSEL) ACT 2013.
The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressel) Act 2013.
28. MAINTENANCE OF COST RECORDS
The Company is not required to maintain any cost records as specified by CentralGovernment under Section 148(1) of the Companies Act 2013 and accordingly such accountsand records are not made and maintained by the Company.
29. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared in the past by the company.
Your Directors place on record their sincere thanks to bankers businessassociates consultants and various Government Authorities for their continued supportextended to your Companies activities during the year under review. Your Directors alsoacknowledges gratefully the shareholders for their support and confidence reposed on yourCompany.
| ||For AuSom Enterprise Limited |
| ||For and on behalf of the Board of Directors |
|Place: Ahmedabad ||Kishor P. Mandalia ||Vipul Z. Mandalia |
|Date: 13th August 2019 ||Managing Director ||Director |
| ||Din: 00126209 ||Din: 02327708 |