The Directors have the pleasure of presenting the 33rd Annual Report of your Companywith the Audited Financial Statements of the Company for the financial year ended March31 2017.
Financial Results (Rs. In lakhs)
|Particulars ||F.Y. 2016-17 ||F.Y. 2015-16 |
|Revenue from Operations ||94 68 162 ||44 42 193 |
|Other operating Income ||28 02 142 ||17 83 061 |
|Total Revenue ||1 22 70 304 ||62 25 254 |
|Less: Total Expenses before Depreciation Finance Cost and Tax ||23 12 303 ||16 98 666 |
|Operating Profits before Depreciation Finance Cost and Tax ||99 58 001 ||45 26 588 |
|Less: Depreciation ||1 61 477 ||1 57 870 |
|Finance Cost ||1 27 448 ||- |
|Profit / (Loss) Before Tax ||96 69 076 ||43 68 718 |
|Less: Current Tax ||19 59 563 ||11 67 802 |
|Less: Deferred Tax Liabilities/ (Assets) ||1 67 000 ||- 4 81 000 |
|Profit / (Loss) after Tax ||75 42 513 ||36 81 916 |
Review of Business Operation
During the financial year 2016-17 The Company has earned total income of Rs. 122.70Lakhs from business activities including income from other sources compared to that of Rs.62.25 Lakhs of previous year which shows growth in Income of the Company by 97.11% overthe previous year. Due to expansion of Business the overall revenue of the Company wasincreased. During the financial year 2016-17 there were no loans written off. The totalProfit before tax for the financial year 2016-17 stood at Rs. 96.69 Lakh comparedto profit before tax of Rs. 43.69 Lakh for the financial year 2015-16 making net profitafter tax of Rs. 75.43 Lakh for financial year 2016-17 compared to profit after taxof Rs. 36.82 Lakh for the financial year 2015-16. The Directors of the Company areplanning to expand the business of the Company in the current year by providing the variedtypes of the financial services to the customers and thus confident of presenting thebetter figures in the coming years.
To conserve resources for future prospect and growth of the Company your Directorsregret to declare Dividend for the Financial Year 2016-17 (Previous year - Nil).
Net Profit Transfer to Reserve
The Company has transferred Rs. 15.08 Lakh to Statutory Reserve Fund in terms ofSection 45-1C of the Reserve Bank of India Act 1934. The balance net profit was adjustedagainst the debit balance of carried forward loss of the Company.
Change in Nature of Business
During the year your Company has not changed its business or object and continues tobe in the same line of business as per main object of the Company.
License for Money Changer
During the financial year 2016-17 the Company has added one more vertical in itsPortfolio. The Company has applied for the Full Fledge Money Changer License to ReserveBank of India and Reserve Bank of India has issued Licence to carry on business for FullFledge Money Changer; License No. 1916/2016 dated June 1 2016.
The Company has commenced activities of Full Fledged Money Changing and earned revenueof Rs. 1.37 Lakh in the financial year 2016-17. The Board of Directors are in planning toexpand the activities of Full Fledged Money Changing Activities in coming years and thusincreasing the line of business of the Company.
Changes in Share Capital
During the year under review there was no change in the Authorised Issued Subscribedand Paid-up Share Capital of the Company. After closure of financial year 2016-17 theAuthorised Share Capital of the Company was increased by the Members of the Company fromRs. 100000000/- (Rupees Ten Crore only) divided into 10000000 (One Crore only)Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 105000000/- (Rupees Ten CroreFifty Lakh only) divided into 10500000 (One Cr ore Five Lakh only) Equity Shares of Rs.10/- (Rupees Ten only) each by way of creation of an additional 500000 (Five Lakhsonly) Equity Shares of Rs. 10/- (Rupees Ten only) each ranking pari passu in all respectwith existing equity shares of the company aggregating to Rs. 5000000/- (Rupees FiftyLakh only). Further the Board of Directors had proposed Preferential Issue of 1740000Equity Shares to Promoter including Promoter Group and Public on Preferential Basis. Theallotment of 1690000 Equity Shares was made on May 30 2017 and the Company has receivedListing and Trading approval.
Migration of Listing
The Company had made application for Migration from SME Platform of BSE Limited to MainBoard of BSE Limited and the application of the Company was approved by the stock exchangeand the Equity Shares of the Company are available for the trading at Main Board of BSELimited w.e.f. Wednesday August 9 2017
Information of Board of Directors and its Meetings
The Board of Directors of the Company consists of four (4) Directors; one (1) of whomis Promoter - Managing Director one (1) is Promoter - Whole-time Director and two (2) areNon-Executive Independent Directors. The composition of Board complies with therequirements of the Companies Act 2013. Further in pursuance of Regulation 15(2) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Company was exempted from requirement of having composition ofBoard as per Listing Regulations as on the end of financial year 2016-17. The Board of theCompany comprises following Directors as on date of this report;
|Name of Directors ||Category of Directorship ||No. of Directorships including Directorship in the Company ||No. of Committee1 Membership/ Chairmanship in Companies ||Attendance at the AGM held on 30-09- 2016 |
|Mr. Jay Morzaria ||Managing Director ||4 ||Member 2 ||Yes |
| ||(Promoter) || || || |
|Mr. Raman Morzaria ||Whole-time Director ||4 ||- ||No |
| ||(Promoter) || || || |
|Mr. Jay Somaiya ||Non-Executive ||3 ||Chairman 2 ||Yes |
| ||Independent Director || || || |
|Ms. Hardika ||Non-Executive ||2 ||Member 2 ||Yes |
|Mandavia ||Independent Director || || || |
1 Committee includes Audit Committee and Shareholders Grievances Committee acrossall Public Companies.
During the year under review Board of Directors of the Company met 7 (Seven) timesviz. April 13 2016 May 27 2016 September 05 2016 November 14 2016 January 062017 February 14 2017 and March 23 2017. The gap between two consecutive meetings wasnot more than one hundred and twenty days as provided in section 173 of the Act. Thedetails of attendance of each Director at the Board Meeting and Annual General Meeting aregiven below;
|Name of Director ||Mr. Jay Morzaria ||Mr. Raman ||Mr. Jay Somaiya ||Ms. Hardika |
| || ||Morzaria || ||Mandavia |
|No. of Board Meeting held ||7 ||7 ||7 ||7 |
|No. of Board Meeting attended ||7 ||7 ||7 ||7 |
|Presence at the previous AGM ||Yes ||No ||Yes ||Yes |
In terms of Section 149 of the Companies Act 2013 ("The Act") and rules madethere under the Company has two Non-Promoter Independent Directors in line with the act.A separate meeting of Independent Directors was held on March 23 2017 to review theperformance of Non-Independent Directors and Board as whole and performance of Chairpersonof the Company including assessment of quality quantity and timeliness of flow ofinformation between Company management and Board. The terms and conditions of appointmentof Independent Directors and Code for Independent Director are incorporated on the websiteof the Company at www.karnavatifinancelimited.com. The Company has received necessarydeclaration from each independent director under Section 149 (7) of the act that they meetthe criteria of independence laid down in Section 149 (6) of the act.
Information on Directorate
During the year under review Mr. Kaushal Ruparel Independent Director of the Companyhas resigned from the board w.e.f. April 13 2016. The Board of Directors had placed theirappreciation to Mr. Kaushal Ruparel for providing his service as director of the Company.Further in terms of Section 149 of the act the Board of Directors in their meeting heldon April 13 2016 has appointed Ms. Hardika Mandavia as an Additional (Non - Executive)Director of the company w.e.f. April 13 2016 and her appointment was regularised atAnnual General Meeting held on September 30 2016. In accordance with the provisions ofthe Articles of Association and Section 152 of the Companies Act 2013 Mr. RamanMorzaria Whole-Time Director of the Company retires by rotation at the ensuing annualgeneral meeting. He being eligible has offered himself for re-appointment as such andseeks re-appointment. The Board of Directors recommends his appointment on the Board.
The relevant details as required under Regulation 36 (3) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") ofthe person seeking re-appointment as Director are also provided in Note No. 32 of theNotice convening the 33rd annual general meeting.
None of the Director of the Company is serving as a Whole-Time Director in any ListedCompany and is holding position of Independent Director in more than 3 Listed Company andnone of the Director of the Company is holding position as Independent Director in morethan 7 Listed Company. Further none of the Directors of the Company is disqualified forbeing appointed as Director as specified in Section 164 (2) of the Companies Act 2013.
Key Managerial Personnel
In accordance with Section 203 of the Companies Act 2013 the Company has Mr. JayMorzaria who is acting as Managing Director of the Company. During the year under reviewthe Company has not appointed/re-appointed any Key Managerial Personnel. Further no KeyManagerial Personnel has resigned from the post. However after the closure of financialyear 2016-17 the Company has appointed Mr. Pinak Soni as Company Secretary and ComplianceOfficer of the Company w.e.f April 15 2017.
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.
Further Nomination and Remuneration Committee has also carried out the performanceevaluation of the individual directors on the basis of the criteria such as thecontribution of the individual director to the board and committee meetings. In additionthe chairman was also evaluated on the key aspects of his role.
Separate meeting of independe nt directors was held to evaluate the performance ofnon-independent directors performance of the board as a whole and performance of thechairman taking into account the views of executive directors and non-executivedirectors.
Directors Responsibility Statement
Pursuant to section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
a) In preparation of annual accounts for the year ended March 31 2017 the applicableaccounting standards have been followed and that no material departures have been madefrom the same;
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 or loss of the Company for that year;
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 for the year ended March 31 2017 ongoing concern basis.
e) The Directors had laid down the 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.
Committee of Board
The Committees of our Board include the following committees constituted in accordancewith the Listing Regulations and the Companies Act:
A. Audit Committee
The Company has formed audit committee in line with the provisions Section 177 of theCompanies Act 2013. Audit Committee meeting is generally held for the purpose ofrecommending the half yearly and yearly financial result. Additional meeting is held forthe purpose of reviewing the specific item included in terms of reference of theCommittee. During the year under review Audit Committee met 4 (Four) times viz on May 272016 September 05 2016 November 14 2016 and February 14 2017. The composition of theCommittee and the details of meetings attended by its members are given below:
|Name of the Director ||Category ||Designation ||No. of Meetings Attended |
|Mr. Jay Somaiya ||Independent & Non Executive ||Chairman ||4 |
|Ms. Hardika Mandavia ||Independent & Non Executive ||Member ||4 |
|Mr. Jay Morzaria ||Executive Director ||Member ||4 |
The representative of Statutory Auditors of the Company was invited in the meeting ofthe Committee whenever required. Mr. Jay Somaiya the Chairman of the Committee hadattended last Annual General Meeting of the Company held on September 30 2016.Recommendations of Audit Committee have been accepted by the Board wherever/whenevergiven.
Composition of the Audit Committee was revised w.e.f. April 13 2016 due to resignationof Mr. Kaushal Ruparel. Ms. Hardika Mandavia Independent Director of the Company wasinducted as Member of the Committee in place of Mr. Kaushal Ruparel.
Further pursuant to Migration of the Company from SME Platform of BSE Limited to MainBoard of BSE Limited; the terms of reference of Audit Committee was revised by the Boardof Directors. The same is as under;
Role of Audit Committee
The scope of audit committee shall include but shall not be restricted to thefollowing:
1. Oversight of the company s financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible;
2. Recommending to the Board the appointment re-appointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees;
3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors;
4. Reviewing with the management the annual financial statements before submission tothe board for approval with particular reference to:
a. Matters required to be included in the Director s Responsibility Statement to beincluded in the
Board s report in terms of clause (c) of sub section 3 of section 134 of the CompaniesAct 2013
b. Changes if any in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment bymanagement
d. Significant adjustments made in the financial statements arising out of auditfindings
e. Compliance with listing and other legal requirements relating to financialstatements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report.
5. Reviewing with the management the quarterly financial statements before submissionto the board for approval;
6. Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document/ InformationMemorandum/notice and the report submitted by the monitoring agency monitoring theutilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter;
7. Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process;
8. Approval or any subsequent modification of transactions of our Company with relatedparties;
9. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the listed entity wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems;
13. Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit;
14. Discussion with internal auditors of any significant findings and follow up thereon;
15. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;
16. Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern;
17. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors;
18. To review the functioning of the whistle blower mechanism;
19. Approval of appointment of chief financial officer after assessing thequalifications experience and background etc. of the candidate;
20. Carrying out any other function as is mentioned in the terms of reference of theaudit committee.
Review of information by Audit Committee
The audit committee shall mandatorily review the following information:
1. Management discussion and a nalysis of financial condition and results ofoperations;
2. Statement of significant related party transactions (as defined by the auditcommittee) submitted by management;
3. Management letters / letters of internal control weaknesses issued by the statutoryauditors;
4. Internal audit reports relating to internal control weaknesses; and
5. The appointment removal and terms of remuneration of the Chief internal auditorshall be subject to review by the Audit Committee.
6. Statement of deviations:
a. Quarterly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1) of the ListingRegulations.
b. Annual statement of funds utilized for purposes other than those stated in the offerdocument/
Information Memorandum/ notice in terms of Regulation 32(7) of the Listing Regulations.
Powers of the Audit Committee:
The audit committee shall have the powers which should include the following:
1. To investigate any activity within its terms of reference;
2. To seek information from any employees;
3. To obtain outside legal or other professional advice; and
4. To secure attendance of outsiders with relevant expertise if it considersnecessary.
The Company has established a vigil mechanism and accordingly framed a Whistle BlowerPolicy. The policy enables the employees to report to the management instances ofunethical behaviour actual or suspected fraud or violation of Company s Code of Conduct.Further the mechanism adopted by the Company encourages the Whistle Blower to reportgenuine concerns or grievances and provide for adequate safe guards against victimizationof the Whistle Blower who avails of such mechanism and also provides for direct access tothe Chairman of the Audit Committee in exceptional cases. The functioning of vigilmechanism is reviewed by the Audit Committee from time to time. None of the Whistleblowers has been denied access to the Audit Committee of the Board. The Whistle BlowerPolicy of the Company is available on the website of the Company atwww.karnavatifinancelimited.com.
B. Shareholders Relationship Committee
The Company has constituted Shareholders Grievance Committee which mainly to focus onthe redressal of
Shareholders / Investors Grievances if any like Transfer / Transmission / Demat ofShares; Loss of Share
Certificates; Non-receipt of Annual Report; Dividend Warrants; etc. During the yearunder review Stakeholder s Grievance & Relationship Committee met 4 (Four) times vizon May 27 2016 September 05 2016 November 14 2016 and February 14 2017. Thecomposition of the Committee and the details of meetings attended by its members are givenbelow:
|Name of the Director ||Category ||Designation ||No. of Meetings |
| || || ||Attended |
|Mr. Jay Somaiya ||Independent & Non Executive ||Chairman ||4 |
|Ms. Hardika Mandavia ||Independent & Non Executive ||Member ||4 |
|Mr. Jay Morzaria ||Managing Director ||Member ||4 |
Composition of the Shareholders Grievances and Relationship Committee was revisedw.e.f. April 13 2016 due to resignation of Mr. Kaushal Ruparel. Ms. Hardika MandaviaIndependent Director of the Company was inducted as Member of the Committee in place ofMr. Kaushal Ruparel.
Further pursuant to Migration of the Company from SME Platform of BSE Limited to MainBoard of BSE Limited; the terms of reference of Shareholders Grievance Committee wasrevised by the Board of Directors. The same is as under;
Terms of Reference
Efficient transfer of shares; including review of cases for refusal of transfer/ transmission of shares;
Redressal of shareholder and investor complaints like transfer of Sharesnon-receipt of balance sheet
non-receipt of declared dividends etc.
Issue duplicate/split/consolidated share certificates;
Allotment and listing of shares;
Dematerialization/Rematerialization of Share
Review of cases for refusal of transfer / transmission of shares and debentures;
Reference to statutory and regulatory authorities regarding investor grievancesand to otherwise ensure proper and timely attendance and redressal of investor queries andgrievances;
Such other matters as may be required by any statutory contractual or other regulatoryrequirements to be attended to by such committee.
During the year the Company had not received any complaints from the Shareholders.There was no complaint pending as on March 31 2017.
C. Nomination and Remuneration Committee
The Company has formed Nomination and Remuneration committee. Nomination andRemuneration Committee meetings are generally held for identifying the persons who arequalified to become Directors and may be appointed in senior management and recommendingtheir appointments and removal. During the year under review Nomination and RemunerationCommittee met 3 (Three) times i.e on April 13 2016 September 05 2016 and March 232017. The composition of the Committee and the details of meetings attended by its membersare given below:
|Name of the Director ||Category ||Designation ||No. of Meetings |
| || || ||Attended |
|Mr. Jay Somaiya ||Independent & Non Executive ||Chairman ||3 |
|Ms. Hardika Mandavia ||Independent & Non Executive ||Member ||3 |
|Mr. Jay Morzaria ||Executive Director ||Member ||3 |
Composition of the Nomination and Remuneration Committee was revised w.e.f. April 132016 due to resignation of Mr. Kaushal Ruparel. Ms. Hardika Mandavia Independent Directorof the Company was inducted as Member of the Committee in place of Mr. Kaushal Ruparel.
Further pursuant to Migration of the Company from SME Platform of BSE Limited to MainBoard of BSE Limited; the terms of reference of Nomination and Remuneration Committee wasrevised by the Board of Directors. The same is as under;
Terms of Reference:
The terms of Reference of Nomination and Remuneration Committee includes;
formulation of the criteria for determining qualifications positive attributesand independence of a director and recommend to the board of directors a policy relatingto the remuneration of the directors key managerial personnel and other employees;
formulation of criteria for evaluation of performance of independent directorsand the board of directors;
devising a policy on diversity of board of directors;
identifying persons who are qualified to become directors and who may beappointed in senior management in accordance with the criteria laid down and recommend tothe board of directors their appointment and removal.
Whether to extend or continue the term of appointment of the independentdirector on the basis of the report of performance evaluation of independent directors.
Nomination and Remuneration Policy
The Company has adopted the Nomination and Remuneration Policy. Key points of theNomination and Remuneration Policy are;
a. Policy on Appointment of Directors Key Managerial Personnel and Senior Management
o The policy is formulated to identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director Key ManagerialPersonnel and Senior Management personnel and recommend to the Board for his / herappointment.
o A person should possess adequate qualification expertise and experience for theposition he/ she is considered for appointment.
o In case of appointment of Independent Director the Committee shall satisfy itselfwith regard to the independent nature of the Director vis--vis the Company so as toenable the Board to discharge its function and duties effectively.
b. Policy on remuneration of Director KMP and Senior Management Personnel
The Company s remuneration policy is driven by the success and performance of DirectorKMP and Senior Management Personnel vis--vis the Company. The Company s philosophy is toalign them with adequate compensation so that the compensation is used as a strategic toolthat helps us to attract retain and motivate highly talented individuals who arecommitted to the core value of the Company. The Company follows mixed of fixed paybenefits and performance based variable pay. The Company pays remuneration by way ofsalary benefits perquisites and allowance. The remuneration and sitting fees paid by theCompany are within the salary scale approved by the Board and Shareholders. The Nominationand Remuneration Policy as adopted by the Board of Directors is placed on the website ofthe Company at www.karnavatifinancelimited.com.
Remuneration of Director
The details of remuneration paid during the financial year 2016-17 to ExecutiveDirector of the Company is provided in Form MGT-9 which is the part of this report.
The company being Non-Deposit accepting Non-Banking Finance Company has not acceptedany deposits from the public. Hence the directives issued by the Reserve Bank of India& the Provision of Section 73 to 76 of the Company Act 2013 or any other relevantprovisions of the Act and the Rules there under are not applicable. Moreover the Companyis not holding any Deposit as at the financial year ended on March 31 2017.
Particulars of Loans Guarantees Investments & Security
Details of Loans Guarantees Investments and Security covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statement.
Contracts or Arrangements with Related Parties
All transactions to be entered by the Company with related parties will be in theordinary course of business and on an arm s length basis. Further there are fewtransactions which may not be on Arms Length Basis the detail of which is given in "AnnexureA" in Form AOC-2 and the same forms part of this report.
Extract of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of Companies (Management and Administration) Rules2014 the extract of the Annual Return as at March 31 2017 in Form MGT-9 forms part ofthis Annual Report as "Annexure - B".
Particular of Employees
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules will be available for inspection at theRegistered Office of the Company during working hours and any member interested inobtaining such information may write to the Company Secretary and the same will befurnished on request.
Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. Disclosures relating to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided as an "AnnexureC" which forms part of this Report.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The details of conservation of energy technology absorption etc. as required to begiven under section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 are not applicable to our Company as the Company is not carrying on anymanufacturing activities. Further there was no foreign exchange earnings and outgo duringthe financial year 2016-17 (Previous Year Nil).
Material Changes and commitment affecting financial position of the Company
There are no material changes and commitments affecting the financial position of theCompany which has occurred between and after the end of financial year of the Company tillthe date of Director s Report except following;
The Company has made Preferential Issue of 1690000 Equity Shares of Rs. 10/-each at a price of Rs. 16/- per Equity Share on preferential basis to Promoters includingPromoter Group and identified Public.
The Listing status of the Company has been migrated from SME Platform of BSELimited to Main Board of BSE Limited.
Sexual Harassment of women at workplace
There were no incidences of sexual harassment reported during the year under review interms of the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 as there are no woman employees employed by theCompany during the Financial Year 2016-17.
Your Company strives to incorporate the appropriate standards for corp orategovernance. However pursuant to Regulation 15(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company is not required to mandatorilycomply with the provisions of certain regulations of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and therefore the Company has not provided aseparate report on Corporate Governance although few of the information are provided inthis report of Directors under relevant heading.
Management Discussion and Analysis
Management Discussion and Analysis for the year under review as stipulated underRegulations 27(2) of the SEBI (LODR) 2015 is presented in a separate section formingpart of this Annual Report.
A well-defined risk management mechanism covering the risk mapping and trend analysisrisk exposure potential impact and risk mitigation process is in place. The objective ofthe mechanism is to minimize the impact of risks identified and taking advance ac tions tomitigate it. The mechanism works on the principles of probability of occurrence andimpact if triggered. A detailed exercise is being carried out to identify evaluatemonitor and manage both business and non-business risks.
Internal Financial Control Systems and their Adequacy:
The details on Internal Financial Control and their adequacy are provided in ManagementDiscussion and Analysis Report.
Statutory Auditor & their report
The Company s Auditor M/s. Maharishi & Co. Chartered Acc ountants Jamnagar(FRN:124872W) were appointed as the Statutory Auditors of the Company for a period of 3years from the conclusion of 31st (Thirty First) Annual General Meeting till the 34th(Thirty Forth) Annual General Meeting subject to ratification at every ensuing AnnualGeneral Meeting from members.
The resolution for the ratification of their appointment has been put in the Noticeconvening the 33rd (Thirty-Third) Annual General Meeting of the Members for theirapproval.
The Board of Directors based on recommendation made by the Audit Committee hasrecommended the ratification of appointment of M/s. Maharishi & Co. CharteredAccountants Jamnagar (FRN: 124872W) as the Statutory Auditors of the Company to hold theoffice from the ensuing AGM till the conclusion of the 34th AGM of the Company on suchremuneration as may be determined by the Board in consultation with the auditors.
The Auditors Report on the accounts of the Company for the acco unting year ended March31 2017 is self-explanatory and do not call for further explanations or comments that maybe treated as adequate compliance of Section 134 of the Companies Act 2013 except theauditor has stated that they are unable to obtain sufficient appropriate audit evidence toprovide a basis for our opinion whether the Company had adequate internal financialcontrols were operating effectively as at March 31 2017. Your Director state that thecompany is in process of establishment of its internal financial control over financialreporting on criteria based on or considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.
Secretarial Auditor & their report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Mr. AnandLavingia Practicing Company Secretary Ahmedabad to carry out the Secretarial Audit forthe financial year ended on March 31 2017. Secretarial Audit Report is attached to thisreport as "Annexure D".
The Secretarial Auditors Report of the Company for the Financial Year ended March 312017 contains annotations relating to appointment of Key Managerial Personnel i.e. ChiefFinancial Officer and Company Secretary as required under Companies Act 2013.
The Board of Directors states that the Board has taken adequate steps to find asuitable persons having work experience in finance Company. The Company is in process toappoint the key managerial personnel. In fact the Company has appointed Mr. Pinka Soni asCompany Secretary and Compliance officer of the Company w.e.f. April 15 2017.
Your Directors state that the Company has made disclosures in this report for the itemsprescribed in section 134(3) of the Act and Rule 8 of The Companies (Accounts) Rules 2014to the extent the transactions took place on those items during the year.
Your Directors further state that no disclosure or reporting is required in respect ofthe following items as there were no transactions on these items during the year underreview:
1. Details of Annual Report on Corporate Social Responsibility as Company is notfalling wit hin the criteria as prescribed u/s 135 of the Companies Act 2013
2. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and ESOS.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company s operations in future.
Your Directors take this opportunity to place on record the valuable co-operation andsupport extended by the banks government business associates and the shareholders fortheir continued confidence reposed in the Company and look forward to having the samesupport in all future endeavours.
| || ||Karnavati Finance Limited |
| ||Jay Morzaria ||Raman Morzaria |
|Place: Jamnagar ||Managing Director ||Whole time Director |
|Date: August 22 2017 ||DIN: 02338864 ||DIN: 00203310 |
|EXTRACT OF ANNUAL RETURN |
|as on the financial year ended March 31 2017 |
|[Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014] |