The Board of Directors are pleased to present the Company's 9thAnnual Report and the Company's audited financial statements (standalone andconsolidated) for the financial year ended March 31 2020.
The Company's financial performance for the year ended March 312020 is summarized below:
| ||Standalone ||Consolidated |
|Particulars ||Year ended March 31 ||Year ended March 31 2019 || |
Year ended March 31
|Year ended March 31 2019 |
| ||2020 || ||2020 || || |
|Revenue from Operations ||2013.45 ||302.11 || |
|Other Income ||19.47 ||103.02 || |
|Total Income ||2032.92 ||405.13 || |
|EBITDA ||80.67 ||8233 || |
|Less: Finance Costs ||32.32 ||36.85 || |
|Less: Depreciation ||25.48 ||28.45 || |
|Profit Before Tax share of profit of joint || || || || |
|venture and associate ||22.86 ||17.12 || |
|Share of profit in joint venture and associate || || || || |
|net of tax ||-- ||- || |
|Profit Before Tax ||22.86 ||17.12 || |
|Less: Tax Expenses ||2.5 ||0.42 || |
|Profit for the year ||20.36 ||16.61 || |
|Add: Surplus Brought Forward from Previous || || || || |
|Year ||(60.02) ||(76.63) || |
|Surplus Available ||(39.66) ||(60.02) || |
|Appropriations made to Surplus: ||- ||- || |
|Dividends including dividend tax ||- ||- || |
|Transfer to General Reserve ||- ||- || |
|Balance carried to Balance Sheet ||(39.66) ||(60.02) || |
|Basic Earnings per share ||0.66 ||0.54 || |
|Diluted Earnings per share ||0.66 ||0.54 || |
Note: The above figures are extracted from the standalone andconsolidated financial statements
OVERVIEW OF FINANCIAL AND BUSINESS OPERATIONS:
The Company's Standalone revenues from operations was Rs.2013.45lakhs for the FY 2019-20 as compared to Rs. 302.11 lakhs for the previous FY 2018-19-. TheCompany has made Net Profit of Rs. 20.36 lakhs on standalone basis for the year underreview as compared to Net Profit of Rs. 16.61 lakhs for the previous year.
TRANSFER TO RESERVES
Rs. 20.36 lacs was transferred to the Reserves for the year ending31.03.2020.
The Company does not recommend any dividend for the year under review.
MATERIAL CHANGES AFFECTING THE COMPANY:
There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and date of thisreport.
The Authorised Share Capital of the Company is Rs. 5000000/- equityshares of Rs. 10/- each. The Issued Subscribed and Paid Up Share Capital of the Companyis Rs. 3077500/- equity shares of Rs. 10/- each.
TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF):
In terms of Section 124(5) of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 there were no unclaimed dividends. The Company did not declare any dividendin its lifetime.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year underreview as stipulated under regulation 34(2) of the Listing Regulations is presented in aseparate section forming part of the Annual Report.
SUBSIDIARY COMPANIES AND THEIR PERFORMANCE AND DEVELOPMENTS
Morbido Merchandise Private Limited.
As per the provisions of section 129 of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 separate statement containing the salient featuresof the financial statements of the subsidiary Companies Joint Ventures and Associates isprepared in Form AOC-1 and it forms part of the consolidated financial statements andattached as Annexure "1" to this report.
During the year under review no company has become or ceased to beCompany's subsidiary company.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements in terms of Section 129 of theCompanies Act 2013 and regulation 34 of the Listing Regulations and prepared inaccordance with Indian Accounting Standards (Ind AS) notified under the Companies (IndianAccounting Standards) Rules 2015 as amended thereof forms a part of this annual report.The consolidated financial statements have been prepared on the basis of audited financialstatements of your Company its subsidiary as approved by the respective Board ofDirectors. As per the provisions of Section 136 of the Companies Act 2013 the Companyhas placed separate audited accounts of its Subsidiary which forms a part of the AnnualReport.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDERSUB-SECTION (6) OF SECTION 149
The Independent Directors have submitted the Declaration ofIndependence as required pursuant to Section 149(7) the Companies Act 2013 stating thatthey meet the criteria of Independence as provided in sub-section (6).
DISCLOSURES ABOUT RECEIPT OF ANY COMMISSION BY MD /WTD FROMCOMPANY OR ANY COMMISSION/REMUNERATION FROM THE SUBSIDIARIES
The Managing Director of the Company has received remuneration of Rs.12.00 lacs from the subsidiary Morbido Merchandise Private Limited during the financialyear 2019-20.
The Directors state that applicable Secretarial Standards i.e. SS-1and SS-2 relating t Meetings of the Board Directors' and GeneralMeetings' respectively have been duly followed by the Company.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(5) of the Companies Act2013 with respect to the Director's Responsibility Statement the Board of Directorsof the Company hereby confirm that:
a) in the preparation of the annual accounts for the year endedMarch 31 2020 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;
b) the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at March 312020 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the Directors have prepared the annual accounts on agoing concern' basis for the financial year ended March 31 2020;
e) the Directors have laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and areoperating effectively; and
f) the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively.
The Company is committed to maintain the highest standards of corporategovernance and adhere to the corporate governance requirements set out by Securities andExchange Board of India (SEBI). The report on Corporate Governance as stipulated under theListing Regulations forms an integral part of this Report. The requisite certificate fromthe Auditors of the Company confirming compliance with the conditions of corporategovernance is attached to the report on Corporate Governance as Annexure "2" tothis report. .
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The company has formulated a familiarization programme for theIndependent Directors to provide sights into the company to enable the IndependentDirectors to understand its business in depth and contribute significantly to the company.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis. During the year except with the wholly owned subsidiarythe Company had not entered into any contract / arrangement / transaction with relatedparties which could be considered material in accordance with the policy of the Company onmateriality of related party transactions.
The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on theCompany's website.
The particulars of contracts or arrangements with related partiesreferred to in section 188(1) are prepared in Form No. AOC-2 pursuant to clause (h) ofsub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 and the same is enclosed as Annexure "3" to the Board's report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Provisions of CSR are not applicable to the Company.
NOMINATION AND REMUNERATION COMMITTEE:
The Company's Nomination and Remuneration committee consists ofmajority of Independent Directors which ensures transparency in determining theremuneration of Directors KMPs and other employees of the Company. The Chairman of thecommittee is an Independent Director thereby resulting in independent and unbiaseddecisions.
During the financial year 2019-20 the composition of Nomination andRemuneration Committee is provided below.
|Name ||Category |
|Mr. Dilip Kumar Surana Chairman ||Independent Non-Executive |
|Mr. Arvind Surana ||Independent Non-Executive |
|Mr. Naresh Kathotia ||Independent Non-Executive |
The Performance Evaluation and Remuneration Policy framed by theCommittee and approved by the Board is directed towards rewarding performance of Executiveand Non-Executive Directors Key Managerial Personnel and Senior Management Personnel ofthe Company based on review of achievements periodically.
Risk Management Committee has been entrusted with the responsibility toassist the Board in (a) overseeing and approving the Company's enterprise wide riskmanagement framework; and (b) overseeing that all the risks that the organization facessuch as strategic financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks. YourCompany has proper process for Risk Management.
INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the riskmanagement process addressing financial and financial reporting risks. The internalfinancial controls have been documented digitized and embedded in the business processes.Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control self-assessment continuous monitoring by functional expertsas well as testing of the internal financial control systems by the internal auditorsduring the course of their audits. We believe that these systems provide reasonableassurance that our internal financial controls are designed effectively and are operatingas intended.
INTERNAL AUDIT & CONTROLS:
Your Company continues to engage M/s Affinity Global Services PrivateLimited as its Internal Auditors. During the year your Company continued to implementtheir suggestions and recommendations to improve the internal controls. Their scope ofwork includes review of operational efficiency effectiveness of systems & processescompliances and assessing the internal control strengths in all areas. Internal Auditorsfindings are discussed and suitable corrective actions are taken as per the directions ofAudit Committee on an on-going basis to improve efficiency in operations.
The Company's internal control systems are well established andcommensurate with the nature of its business and the size and complexity of itsoperations. The Audit Committee reviews adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendations. Therecommendations/suggestions of the internal auditors are discussed in the Audit Committeemeetings.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act2013 and the Articles of Association of the Company Mrs. Renu M Dugar Non-ExecutiveDirector of the Company retires by rotation at the 9th Annual General Meetingand being eligible offers himself for re-appointment.
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet with the criteria of independence asprescribed both under the Companies Act and the Listing Regulations.
The Company has devised a Policy for performance evaluation ofIndependent Directors Board Committees and other individual Directors which includecriteria for performance evaluation of the Non-Executive Directors and ExecutiveDirectors. Pursuant to the provisions of the Companies Act 2013 read with the Rulesissued there under and the Listing
Regulations (including any statutory modification(s) orreenactment(s) for the time being in force) the process for evaluation of theannual performance of the Directors/ Board/ Committees was carried out in accordance withthe policies in force.
The Board of Directors has complete access to the information withinthe Company. Independent Directors have the freedom to interact with the Company'smanagement. Interactions happen during Board / Committee meetings management persons areasked to make presentations about performance of the Company. Apart from this they alsohave independent interactions with the Statutory Auditors the Internal Auditors andexternal advisors appointed from time to time. Further they meet without the presence ofany management personnel and their meetings are conducted informally to enable theIndependent Directors to discuss matters pertaining to the Company's affairs and putforth their combined views to the Board of Directors of the Company.
Mr. Manoj Kumar Dugar Chairman and Managing Director Mrs. Renu DugarExecutive Director Mr. Rajesh C Dugar Executive Director Mr. Abhishek Kumar Sahal Chief Financial Officer and Ms. Deepika Sureka Company Secretary and Compliance Officerare Key Managerial Personnel of the Company during the year under review.
AUDITORS & THEIR REPORT:
M/s. Luharuka & Associates Firm of Chartered AccountantsHyderabad were appointed as Auditors of the Company for a term of 5 (five) years at the8th Annual General Meeting held on September 30 2019. The Auditors haveconfirmed that they are not disqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors'Report are self-explanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation adverse remark or disclaimer.
The Board had appointed M/s. Saurabh Poddar & Associates CompanySecretaries to conduct Secretarial Audit for the financial year 2019-20. The SecretarialAudit Report for the financial year ended March 31 2020 is annexed herewith marked asAnnexure 4 to the Board's Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
Meetings of the Board
Eight(8) meetings of the Board of Directors were held during the year.The particulars of meetings held and attended by each Director are detailed in theCorporate Governance Report which forms part of this Report.
The Audit Committee comprises majority Independent Directors namely Mr.Naresh Kathotia (Chairman) Mr. Dilip Kumar Surana and Mr. Manoj Kumar Dugar as othermembers. During the year all the recommendations made by the Audit Committee were acceptedby the Board.
The Company has a Vigil mechanism and a Whistle - blower policy inaccordance with provisions of the Act and Listing Regulations under which the employeesare free to report violations of applicable laws and regulations and the Code of Conduct.Protected disclosures can be made by a whistle blower through a dedicated e-mail or aletter to the Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessedon the Company's website.
Code of Conduct
A declaration regarding compliance with the code of conduct signed bythe Company's Chairman and Managing Director is published in the Corporate GovernanceReport which forms part of the annual report.
Particulars of Loans given Investments made Guarantees given andSecurities provided
Particulars of loans given investments made guarantees given andsecurities provided are provided in the standalone financial statement (Please refer toNote No. 6 & 7 to the standalone financial statement).
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under theAct are provided in Annexure 5 to the Board's Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure6 to this Report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended thereof none of the employees drawn remuneration inexcess of the limits set out in the said rules.
Your Directors further state that the remuneration paid to the Keymanagerial Personnel and others is as per the Remuneration Policy of the Company.Particulars of Employees information as per Rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure 7 tothis Report.
DECLARATION ABOUT COMPLIANCE WITH CODE OF CONDUCT BY MEMBERS OF THEBOARD AND SENIOR MANAGEMENT PERSONNEL
The company has complied with the requirements about the Code ofConduct for Board members and Senior Management Personnel.
POLICY ON SEXUAL HARASSMENT
The Company has a Policy on "Prevention of Sexual Harassment ofWomen at Workplace" for the matters connected therewith or incidental theretocovering all the aspects as contained under the "The Sexual Harassment of Women atWorkplace (Prohibition Prevention and Redressal) Act 2013".
During the year under review the Company has not received anycomplaints pertaining to Sexual Harassment.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no material significant orders passed by the Regulators orCourts which would impact the going concern status of the company and its futureoperations.
Your company considers its Human Resources as the key to achieve itsobjectives. Keeping this in view your company takes utmost care to attract and retainquality employees. The employees are sufficiently empowered and the work environmentpropels them to achieve higher levels of performance. The unflinching commitment ofemployees is the driving force behind the company's vision. Your company appreciatesthe dedication of its employees.
Your Directors state that no disclosure or reporting is required inrespect of the following matters as there were no transactions on these items during theyear under review:
Details relating to deposits covered under Chapter V of theAct.
Issue of equity shares with differential rights as todividend voting or otherwise.
Issue of shares (including sweat equity shares) to employeesof the Company under any scheme save and except Employee Stock Option Scheme referred toin this Report.
The Company does not have any scheme of provision of moneyfor the purchase of its own shares by employees or by trustees for the benefit ofemployees.
Cost Audit is not applicable for the financial year 2019-20.
No significant or material orders were passed by theRegulators or Courts or Tribunals which impact the going concern status and Company'soperations in future.
No fraud has been reported by the Auditors to the AuditCommittee or the Board.
APPRECIATIONS AND ACKNOWLEDGEMENTS:
The Board of Directors would like to express their sincere appreciationfor the assistance and co-operation received from the financial institutions banksGovernment authorities customers vendors and members during the year under review. TheBoard of Directors wishes hereby to place on record their appreciation for the committedservices by the Company's executives staff and workers.
| ||behalf of the Board of Directors |
| ||Sd/- |
| ||Manoj Kumar Dugar |
| ||Chairman and Managing Director |
| ||DIN: O352733 |
|Secunderabad July 17 2020 || |