To the Members
Your Directors are pleased to present the Third Annual Report of your Company alongwiththe Audited Financial Statements for the financial year ended March 31 2019.
The financial performance of the Company for the year ended March 31 2019 issummarised below:
| || ||(Rs. in lacs) |
|Particulars ||2018-19 ||2017-18 |
|Total income ||10247.53 ||9490.72 |
|Total expenditure ||9750.30 ||7329.75 |
|Profit before taxation ||497.23 ||2160.97 |
|Less: Provision for taxation || || |
|- Current tax ||253.48 ||811.90 |
|- Deferred tax asset ||(90.48) ||(11.56) |
|Net profit after taxes ||334.23 ||1360.63 |
|Transfer to statutory reserve fund pursuant to Section 45-IC of the Reserve Bank of India Act 1934 ||(66.67) ||- |
|Surplus in the statement of profit and loss ||267.56 ||1360.63 |
|Balance brought forward from previous period ||1339.60 ||(21.03) |
|Balance carried to balance Sheet ||1607.17 ||1339.60 |
|Earnings per share (Face Value Rs10/- each) || || |
|Basic (Rs.) ||0.46 ||1.86 |
|Diluted (Rs.) ||0.46 ||1.86 |
RESULTS FROM OPERATIONS
A detailed discussion on the business performance and future outlook is included in theManagement Discussion and Analysis which forms part of the Directors' Report.
Considering your Company's launch of holiday finance business future strategy andplans your Directors consider it prudent to conserve resources and hence do notrecommend any dividend on equity shares for the financial year under review.
SHARE CAPITAL Authorised Share Capital
During the year under review the authorised share capital of the Company was increasedfrom ^200000000/- (Rupees Twenty Crore Only) to ^1000000000/- (Rupees Hundred CroreOnly) by passing an Ordinary resolution in the Annual General Meeting held on July 312018.
Issued Subscribed and Paid-up Share Capital
During the year under review pursuant to the Order dated 02 August 2018 passed by theHon'ble NCLT sanctioning the Scheme of Arrangement between Cox & Kings Limited and
Cox & Kings Financial Service Limited the Company issued 58854454 fully paidequity shares of Rs10/- each on October 30 2018 to the shareholders of Cox & KingsLimited in the ratio of 3:1 as per the said Scheme of Arrangement.
Subsequent to the above mentioned allotment the issued subscribed and paid-up sharecapital of the Company stands increased to ^728544540/- divided into 72854454 equityshares of face value of Rs10/- each. The Company's equity share capital has been listed onthe National Stock Exchange of India Limited (NSE) and BSE Limited on April 11 2019. Theshares are traded on BSE and NSE and have not been suspended from trading.
The Company has neither issued any shares with differential voting rights nor grantedany stock options or any sweat equity during the year under review.
PARTICULARS OF LOANS GUARANTEES & INVESTMENTS
The provisions of Section 186 of the Companies Act ("the Act") pertaining toinvestment and lending activities is not applicable to the Company since the Company is anNBFC duly registered with the Reserve Bank of India. The details of loan given andinvestments made during the financial year are furnished in the Notes to the financialstatements.
SUBSIDIARIES AND ASSOCIATES
As on March 31 2019 the Company do not have any subsidiary associate or a jointventure company. The disclosure pursuant to the provisions of Section 197(14) of the Actis not applicable to the Company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company along with relevant documents are available on the website of the Companyat www.ckfsl.com.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors have constituted a CorporateSocial Responsibility (CSR) Committee and in light of your Company's philosophy of being aresponsible corporate citizen the Board of Directors adopted a CSR Policy which lays downthe principles and mechanism for undertaking various projects / programs for the Company'sCSR activities.
However disclosure in terms of Section 134(3)(o) and Section 135 of the Act read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 with respect to CSRactivities undertaken by the Company during the year under review have not been providedas the same are not applicable to the Company. The Company was incorporated in December2016 and as stipulated under Setion 135 of the Act your Company is yet to complete threefinancial years hence the question of calculating two per cent of the average net profitof the Company made during three immediately preceding financial years does not arise.
The Company being a responsible organization recognizes its social responsibility tocontribute towards the activities for the benefit and development of the Society and fromnext year onwards it endeavours to contribute to the social activities in the bestpossible manner.
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
Information on the operational and financial performance among others are given inthe Management Discussion and Analysis which is annexed to this report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The internal financial controls with reference to financial statements as designed andimplemented by the Company are adequate. The internal financial control procedure adoptedby the Company is adequate for safeguarding its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information. Further the statutory auditors haveverified the systems and processes and confirmed that the internal financial controls overfinancial reporting are adequate and such controls are operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
In terms of the provisions of the Act the Securities & Exchange Board of India(Listing Obligations & Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") and the RBI Master Directions the Board of Directors adopted a RelatedParty Transaction Policy to ensure proper approval and reporting of transactions of theCompany with its related parties.
During the year under review all transactions executed by the Company during thefinancial year with related parties were on arm's length basis and in the ordinary courseof business. All transactions with the related parties during the year under review werein compliance with the Related Party Transaction Policy. Further during the year underreview the Company had not entered into transactions with related parties which could beconsidered to be 'material' in accordance with the then effective Related PartyTransaction Policy of the Company.
The particulars as required under the Companies Act 2013 are furnished in Form AOC - 2which is annexed as "Annexure A" to this report.
The Board of Directors of the Company has formed a Risk Management Committee to frameand implement the Risk Management Policy for the Company. The Committee is responsible forreviewing the risk management plan and ensuring its efficiency.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
In terms of Section 177(9) and Section 177(10) of the Act and the SEBI ListingRegulations the Board of Directors adopted a Whistle Blower Policy/Vigil Mechanisminter-alia to provide a mechanism for Directors and employees of the Company to approachthe Audit Committee of the Company and to report genuine concerns related to the Companyand provide for adequate safeguards against victimization of Director(s) or employee(s)who report genuine concerns under the mechanism.
Details of the Whistle Blower Policy/Vigil Mechanism have been provided in theCorporate Governance Report which is annexed to and forms an integral part ofthis Board'sReport. The policy is available on the Company's website at www.ckfsl.com.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy on Prevention of Sexual Harassment in line with therequirements ofSexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaints Committee has been set up to redress thecomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the year under review nocomplaints related to sexual harassment had been received by the Internal ComplaintsCommittee(s).
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a) APPOINTMENT OF DIRECTORS:
During the year under review following appointments were made:
1. Mr. V.P.Ravindran Menon (DIN: 07072356) was designated as the Whole Time Directorfor a period of 5 years with effect from March 25 2019.
2. Ms. Matangi Gowrishankar (DIN: 01518137) was appointed as the AdditionalNon-Executive Independent Director with effect from August 24 2018.
3. Mr. Jayesh Shah (DIN: 05011160) was appointed as the Additional Non-ExecutiveIndependent Director with effect from December 26 2018.
b) RETIREMENT BY ROTATION:
In terms of the provisions of Section 152(6) of the Act Mr. V.P.Ravindran Menon WholeTime Director (DIN: 07072356) retires by rotation at the forthcoming Annual GeneralMeeting and being eligible offers himself for reappointment. In accordance withRegulation 36 of the SEBI Listing Regulations and Secretarial Standard - 2 on GeneralMeetings brief profile of the Directors to be reappointed is included in the Notice whichforms part of this Annual Report.
c) KEY MANAGERIAL PERSONNEL:
During the year under review Mr. Shailesh Pednekar ceased to be the Chief FinancialOfficer of the Company w.e.f. January 23 2019 and Mr Milind Gandhi was appointed as theChief Financial Officer of the Company w.e.f. January 24 2019.
Further Ms. Manasi Modak was appointed as the Company Secretary & ComplianceOfficer w.e.f. September 20 2018.
Pursuant to the provisions of Section 203 of the Act read with the rules made thereunder the following employees are the whole time key managerial personnel of the Company:
1. Mr. V.P.Ravindran Menon - Whole Time Director
2. Mr. Milind Gandhi - Chief Financial Officer
3. Ms. Manasi Modak - Company Secretary and Compliance Officer
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have furnished the declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013.
BOARD AND COMMITTEE MEETINGS
During the year ended March 31 2019 the Board met 16 (sixteen) times and the gapbetween two Board Meetings did not exceed 120 days and atleast one meeting has been heldin each Quarter Details of the Board Meetings and Meetings of its Committees are furnishedin the Corporate Governance Report.
ORDERS PASSED BY REGULATORS/ COURTS/ TRIBUNALS
The Hon'ble NCLT vide it's Order dated August 02 2018 sanctioned the Scheme ofArrangement between Cox & Kings Limited and Cox & Kings Financial Service Limitedfor the demerger of the forex exchange division of Cox & Kings Limited into Cox &Kings Financial Service Limited w.e.f. April 01 2017.
POLICIES OF THE COMPANY
The Company is determined in maintaining a good corporate governance practice and has arobust system for smooth and effective functioning of the Board. Various policies havebeen framed by the Board of Directors as required under the Companies Act 2013 and SEBIListing Regulations in order to follow a uniform system of procedures. These policies areperiodically reviewed and updated by the Board of Directors of the Company from time totime. Following are some of the major policies adopted by the Company:
1. Code for Insider Trading Policy
2. Corporate Social Responsibility (CSR) Policy
3. Nomination & Remuneration Policy
4. Policy for determining material events or information
5. Policy on Related Party Transactions
6. Whistle Blower Policy
7. Document Retention and Archival Policy
8. Code for Directors and Senior Managerial Personnel
The aforementioned policies are available on the website of the Company and can beaccessed at www.ckfsl.com.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act your Directors to the best of their knowledgeand ability hereby confirm that:
i. In the preparation of annual accounts the applicable accounting standards have beenfollowed and no material departures have been made from the same;
ii. 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 March 31 2019 and of the profitand loss of the Company for the year ended on that date;
iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. The Directors have prepared the annual accounts on a "going concern"basis;
v. The Directors have laid down internal financial controls which are adequate andoperating effectively;
vi. The Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.
M/s. Desai Associates Chartered Accountants (Firm Registration Number - 102286W) wereappointed as the Statutory Auditors of the Company at the Second AGM held on July 31 2018to hold office for a period of 4 years i.e. till the conclusion of Fourth Annual GeneralMeeting to be held in the financial year 2020-21.
The Company has received a written consent and certificate of eligibility pursuant tothe provisions of Sections 139 141 and other applicable provisions of the Act and rulesframed thereunder (including any statutory modification or reenactment thereof for thetime being in force) from M/s. Desai Associates Chartered Accountants. Further M/s.Desai Associates Chartered Accountants have confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India asrequired under the SEBI Listing Regulations.
The Auditors' Report for the financial year ended March 31 2019 on the financialstatements of the Company is a part of this Annual Report. The Auditors' Report does notcontain any adverse remark qualification or reservation.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsin its meeting re-appointed CS Dilip Bharadiya Proprietor of M/s. Dilip Bharadiya andAssociates. Practicing Company Secretaries
(FCS: 7956) to carry out the audit of secretarial records of the Company. The consentof the Secretarial Auditor to undertake the secretarial audit for the financial year endedMarch 31 2019 has been received by the Company.
The Secretarial Audit Report for the financial year ended March 31 2019 is set out in"Annexure B" to this report. The Secretarial Audit Report does not contain anyadverse remark reservation or qualification.
In compliance with Regulations 17 to 27 and 34 read with Schedule V of SEBI ListingRegulations as applicable the Corporate Governance Report is annexed and forms part ofthe Annual Report. The report is duly certified by the Secretarial Auditors of theCompany. A certificate from M/s. Dilip Bharadiya & Associates Practising CompanySecretaries confirming compliance of conditions of Corporate Governance as prescribedunder the SEBI Listing Regulations is annexed to the Corporate Governance Report.
In accordance with the master circular issued by RBI on "NonBanking FinancialCompanies - Corporate Governance (Reserve Bank) Directions 2015" the Company hasadopted the internal guidelines on Corporate Governance.
EXTRACT OF THE ANNUAL RETURN
In terms of Section 134(3)(a) and Section 92(3) of the Act read with the Companies(Management and Administration) Rules 2014 the extract of Annual Return as at financialyear ended March 31 2019 in the prescribed Form MGT-9 has been provided at "AnnexureC" to this Board's Report and is also available on the website of the Company atwww.ckfsl.com.
PARTICULARS OF EMPLOYEES
In terms of Section 197 of the Act read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the disclosures with respect to theremuneration of Directors key managerial personnel and employees of the Company have beenprovided at "Annexure D" to this Board's Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company being an NBFC and engaged in the financial services activities itsoperations are not energy intensive nor does it require adoption of specific technologyand hence information in terms of Section 134(3)(m) of the Act read with the Companies(Accounts) Rules 2014 is not provided in this Board's Report. Your Company is vigilant onthe need for conservation of energy.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of foreign exchange earnings and outgo required under Section 134 (3) (m) ofthe Act read with Rule 8 (3) of the Companies (Accounts) Rules 2014 are as under:
| || ||(In Rs.) |
|Particulars ||F.Y. 2017-18 ||F.Y. 2018-19 |
|Foreign exchange earnings and outgo || || |
|Earnings ||11408.46 ||15764.90 |
|Outgo ||352971.32 ||396741.60 |
a. During the year under review the Company has not accepted any deposits which wouldbe covered under Section 73 of the Companies Act 2013 read with the Companies (Acceptanceof Deposits) Rules 2014 (including any statutory modification(s) or re-enactment(s)thereof for the time being in force);
b. The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India on Meetings of the Board of Directors and General Meetings;
c. The Statutory auditors and the Secretarial auditors of the Company have not reportedany instances of fraud or irregularities as specified under Section 143(12) of the Actread with Rule 13 of the Companies (Audit and Auditors) Rules 2014;
d. The Company does not have any scheme or provision of money for the purchase of orsubscription to its own shares by the employees/ Directors or by trustees for the benefitof the employees/ Directors.
Your Directors place on record their appreciation for the valuable support andco-operation of the Company's Bankers Government Agencies Customers SuppliersShareholders Employees and other statutory authorities who have reposed their continuedtrust and confidence in the Company.
|For and on behalf of the Board of Directors || |
| ||Ajay Ajit Peter Kerkar |
| ||Director |
| ||DIN:00202891 |
| ||V. P. Ravindran Menon |
|Place: Mumbai ||Whole Time Director |
|Date: May 29 2019 ||DIN: 07072356 |