To the Members
Your Board of Directors (Board') is pleased to present the Fifteenth AnnualReport of your Company Kaya Limited for the year ended March 31 2018 (the yearunder review' the year' or FY2017-18').
In line with the requirements of the Companies Act 2013 (the "Act") thisreport covers the financial results and other developments during April 1 2017 to March31 2018 in respect of Kaya Limited (Kaya') and Kaya Consolidated comprising Kayaits Subsidiaries and Joint Venture. The consolidated entity has been referred to asKaya Group' or Your Group' in this report.
FINANCIAL RESULTS - AN OVERVIEW
| || || |
(Rs. in Lakhs)
|Particulars || |
| ||Year ended March 31 2017 ||Year ended March 31 2018 ||Year ended March 31 2017 ||Year ended March 31 2018 |
|Total Revenue ||20593.34 ||21078.16 ||42042.60 ||40993.45 |
|(Loss) before Tax ||(1823.42) ||(1371.38) ||(2980.06) ||(1928.75) |
|Tax Expense || || || || |
|- Current Tax ||- ||- ||- ||- |
|- Deferred Tax ||(254.31) ||(37.81) ||(254.31) ||(37.81) |
|(Loss) After Tax ||(1569.11) ||(1333.57) ||(2830.28) ||(1976.92) |
Figures for Financial Year 2016-17 have been restated as per Ind AS and therefore maynot be comparable with financials for Financial Year 2016-17 approved by the Directors anddisclosed in the Financial Statement of previous year.
REVIEW OF OPERATIONS
During the year under review Your Group posted consolidated total revenue of INR40993.45 Lakhs a reduction of around 2.5% over the previous year. A loss of INR 1928.75Lakhs (4.71% of Total Revenue) was reported during the financial year under review ascompared to a loss of INR 2980.06 Lakhs (7.09% of previous year's Total Revenue) for theprevious financial year. There are no material changes and commitments affecting thefinancial position of your
Company which have occurred between the end of the FY 2017-18 and the date of thisreport.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to general reserve this year due tounavailability of profits.
The Directors have recommended no dividend for the year ended March 31 2018.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs ("MCA") vide its notification datedFebruary 16 2015 issued Indian Accounting Standards ("IND AS") applicable tocertain classes of companies. In exercise of the powers conferred by Section 133 read withsection 469 and Section 210A(1) of the Companies Act 1956 the Central Government inconsultation with the National Advisory Committee on Accounting Standards has replacedthe existing Indian GAAP with IND AS. For Kaya IND AS is applicable for the accountingperiod beginning April 1 2017 with the transition date of April 1 2016. The followingare the key areas which had an impact on account of IND AS transition:
Customer Loyalty Programme (Deferred Revenue)
Share based payments
Deferred Tax Asset
Defined employee benefit obligations
Fair valuation of certain financial instruments
The detailed reconciliation of the transition from IGAAP to IND AS has been provided inNote 36 in the notes to accounts of Standalone Financial Statement and Note 38 in thenotes to accounts of Consolidated Financial Statement.
SUBSIDIARIES/ JOINT VENTURE
Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act 2013read with Rule 5 8 of Companies (Accounts) Rules 2014 and other applicable provisionsif any a statement covering the salient features of the financial statements of oursubsidiaries joint venture in the prescribed format AOC-1 is annexed to this report asAnnexure I.
The financial statement of the subsidiary companies and related information areuploaded on the website of your Company and can be accessed using the linkhttp://www.kaya.in/investors/#kaya_investors.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements forming part of thisAnnual Report.
The Company did not accept any public deposits during the year 2017-18.
RELATED PARTY TRANSACTIONS
All the transactions with the related parties entered into during the financial year2017-18 were at arm's length and in the ordinary course of business and in accordance withthe provisions of the Act and the Rules made thereunder. There were no transactions whichwere material considering the materiality thresholds prescribed under the Act andRegulation 23 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations"). Accordinglyno disclosure is made in respect of the Related Party Transactions in the prescribed FormAOC-2 in terms of Section 134 of the Act.
The Policy on Related Party Transactions as approved by the Board is uploaded on thewebsite of the Company at http:// www.kaya.in/investors/#kaya_investors.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis forming a part of this Annual Report inter aliacovers the following:
Industry structure and development
Opportunities and Threats
Risks and Concerns
Internal control systems and their adequacy
Discussion on financial performance with respect to operational performance
Material Developments in Human Resources/ Industrial Relations front includingnumber of people employed.
DIRECTORS & KEY MANAGERIAL PERSONNEL
As per Section 152 and other applicable provisions of the Act Mr. Rajendra Mariwalabeing liable to retire by rotation at the ensuing Annual General Meeting of the Companyhas offered himself for re-appointment.
The Company has received declarations from the Independent Directors affirming thatthey meet the criteria of independence as provided in Section 149(6) of the Act anddeclaration under Regulation 26 of the Listing Regulations.
Further all the members of the Board of Directors and senior management personnel haveconfirmed compliance with the code of conduct of board of directors and senior management.
It is also proposed to re-appoint Ms. Ameera Shah Independent Director whose term ofoffice expires on March 31 2019 for a further period of 5 (Five) years to hold officeupto March 31 2024.
During the year Mr. Dharmendar Jain resigned as the Chief Financial Officer of theCompany w.e.f. April 21 2017 and Mr. Naveen Duggal was appointed as the Chief FinancialOfficer w.e.f. August 2 2017.
Further during the year Ms. Almas Badar resigned as the Company Secretary of theCompany w.e.f. November 10 2017 and Ms. Nitika Dalmia was appointed as the CompanySecretary & Compliance Officer w.e.f. December 5 2017.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met 6 times during the year to deliberate onvarious matters. The details of the meetings of the Board and its Committees held duringthe year are stated in the Corporate Governance Report forming part of this Annual Report.
In accordance with the relevant provisions of the Act Rules made thereunder and theRegulation 17(10) of the Listing Regulations and the Guidance Note on Board Evaluationissued by SEBI vide its circular dated January 5 2017 the evaluation of the performanceof the individual directors Chairman of the Board the Board as a whole and itsCommittees was carried out. The details of the same are explained in the CorporateGovernance Report.
A separate section on corporate governance practices followed by the Company togetherwith a certificate from the Statutory Auditors confirming compliance thereto is annexed tothis Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosure on the details of remuneration to Directors and other employees pursuantto Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure II.
Details of employee remuneration as required under provisions of Section 197 of theCompanies Act 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 shall be made available on the website of the Company 21days prior to the date of meeting of forthcoming Annual General Meeting. This informationis also available for inspection by the members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. Any member desirous of obtaining a copy of the said annexure may write tothe Company Secretary of your Company.
POLICY ON NOMINATION AND REMUNERATION
In terms of the applicable provisions of the Act read with the rules made thereunderand the Listing Regulations your Board has formulated a policy in relation toappointment removal and remuneration of Directors and Key Managerial Personnel. TheNomination & Remuneration Policy can be accessed using the linkhttp://www.kaya.in/investors/#kaya_ investors.
EMPLOYEES' STOCK OPTION SCHEME
The Company had formulated and implemented Kaya Limited Employees Stock Option Scheme2014 and Kaya Limited Employees Stock Option Scheme 2014 KME for grant of optionsto employees of the Company and its subsidiaries respectively. Vesting Date for theoptions granted under Kaya Limited Employees Stock Option Scheme 2014 and Kaya LimitedEmployees Stock Option Scheme 2014 KME was March 31 2016 and March 31 2017respectively. In view of the implementation of the Kaya Employee Stock Options Plan 2016as explained below no further grant of stock options is envisaged in these Schemes.
KAYA EMPLOYEE STOCK OPTION PLAN 2016
The Board of Directors of the Company through a circular resolution passed on June 282016 had approved the introduction and implementation of Kaya Employee Stock Option Plan2016 ("Kaya ESOP 2016" or "the Plan") for employees of the Company andits subsidiaries and the same was approved by the shareholders at the Annual GeneralMeeting held on August 4 2016. Under the plan Stock Options shall be granted to eligibleemployees by the Nomination and Remuneration Committee through various Schemes to benotified under the Plan. The total number of options granted in aggregate under the Planshall not exceed 2% of the paid-up equity capital of the Company as on March 31 2016 andthe grant of options to any single employee shall not exceed 0.5% of the paid-up equityshare capital of the Company.
KAYA ESOP 2016 SCHEME I
Nomination and Remuneration Committee of the Board of Directors through a circularresolution passed on August 23 2016 had approved the Kaya ESOP 2016 - Scheme I. Total of253893 stock options were granted under the said Scheme to the eligible employees of theCompany and its Subsidiaries.
KAYA ESOP 2016 SCHEME II
The Nomination and Remuneration Committee of the Board of Directors through a circularresolution passed on June 28 2017 had approved the Kaya ESOP 2016 - Scheme II. Total of27400 stock options were granted under this Scheme to the eligible employees of theCompany and its Subsidiaries. However due to resignation of the said eligible employeesduring 2017-18 the options granted under this Scheme have lapsed. The vesting date forthe options granted was March 31 2019.
KAYA ESOP 2016 SCHEME III
The Nomination and Remuneration Committee of the Board of Directors through a circularresolution passed on June 28 2017 had approved the Kaya ESOP 2016 - Scheme III. Total of14700 stock options were granted under this Scheme to the eligible employees of theCompany and its Subsidiaries. The vesting date for the options granted under this Schemeis March 31 2020.
Additional information on ESOS in terms of section 62(1)(b) of the Companies Act 2013read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014 andapplicable provisions of the SEBI (Share Based Employee Benefits) Regulations 2014 isannexed to this Report as Annexure III.
CORPORATE SOCIAL RESPONSIBILTY ("CSR")
The statutory provisions of Section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Company ason March 31 2018.
However as a good Corporate Governance initiative the Board of Directors hadconstituted the CSR Committee. Once the said statutory provisions are applicable to theCompany the CSR Committee shall recommend to the Board of Directors the CSR Policy andamount of expenditure to be incurred for the purpose. The Composition of the Committee islaid down in the Corporate Governance Report forming part of this Annual Report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 and Rules made thereunder your Company hasconstituted an Internal Committee and during the year under review the Committee receivedno complaints on sexual harassment.
AUDITORS Statutory Auditors
The shareholders of the Company at their 14th Annual General Meeting held on August 22017 had appointed M/s. B S R & Co. LLP Chartered Accountants (Firm Registration No.101248W/W-100022) as the Statutory Auditors of the Company to hold office from theconclusion of the 14th Annual General Meeting till the conclusion of 19th Annual GeneralMeeting of the Company subject to ratification by the shareholders at Annual GeneralMeeting(s) as applicable.
Consequently the Board of Directors recommends the ratification of appointment of M/s.B S R & Co. LLP Chartered Accountants as the Statutory Auditors of the Company tohold office from the conclusion of this Annual General Meeting till the conclusion of 16thAnnual General Meeting of the Company.
M/s. Ernst & Young LLP a Chartered Accountant Firm has been associated with yourCompany as its internal auditor partnering your Company in the area of risk management andinternal control systems.
Pursuant to Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your company appointed Amita Desai& Co. Practicing Company Secretaries Mumbai to conduct the Secretarial Audit ofyour Company. The Secretarial Audit Report for FY2017-18 is enclosed as Annexure IV tothis report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
The Auditor's Report does not contain any qualification reservation or adverse remarkor disclaimer by M/s. B S R & Co. LLP Chartered Accountants.
COMPOSITION OF THE AUDIT AND RISK MANAGEMENT COMMITTEE
The composition and the detailed terms of reference of the Committee are stated in theCorporate Governance Report forming part of this Annual Report.
The Company has a robust Risk Management framework to identify evaluate business risksand opportunities. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company's competitive advantage.
INTERNAL FINANCIAL CONTROLS
Kaya has developed IFC framework on the basis of review of Policies procedures andprocesses. Controls for each of the processes were documented. Design and operatingeffectiveness of controls was tested by management and later audited by the statutoryauditors. Your statutory auditors have given a clean report after checking effectivenessof controls. The management believes that strengthening IFC is a continuous process andtherefore it will continue its efforts to make the controls smarter with focus onpreventive and automated controls as opposed to mitigating and manual controls.
We have embodied the mechanism in the Code of Conduct of the Company for employees toreport concerns about unethical behaviour actual or suspected fraud or violation of ourCode of Conduct. This mechanism also provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provide for direct accessto the Chairman of the Audit Committee in exceptional cases and no personnel have beendenied access to the Audit Committee. The Board and its Audit Committee are informedperiodically on the cases reported if any and the status of resolution of such cases.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS significant/There were no material orders passed by the regulators or courts or tribunals impactingthe going concern status of your Company and its operations in future.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOConservation of Energy
Your company emphasizes on conservation of energy as its responsibility towards theenvironment and society at large by ensuring that its products services and operationsare safe for consumers employees and the environment. Your Company focuses on technologyprocesses and improvements that matter for environment which includes reduction in powerconsumption optimal water usage and eliminating excess use of paper.
The Company strives to adopt technology that provides the best possible outcome to itscustomers. The Company constantly reviews technological innovations/advancementsapplicable to its business.
Foreign Exchange Earnings and Outgo
The details of Foreign Exchange Earnings and Outgo for the year under review are asfollows:
| ||2017-18 ||2016-17 |
|Foreign exchange earnings and Outgo ||(Rs. in Crore) ||(Rs. in Crore) |
|1. The Foreign Exchange earned in terms of actual inflows during the year. ||8.54 ||5.17 |
|2. The Foreign Exchange outgo during the year in terms of actual outflows. ||5.75 ||7.74 |
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of the Section 92 of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 as amended from time to time theextract of Annual Return of the Company for the financial year ended March 31 2018 isgiven as Annexure V to this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company has complied with the Secretarial Standards related to the Board Meetingsand General Meeting issued by the Institute of Company Secretaries of India (ICSI).
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and information and based on the information andexplanations provided to them by the Company your Directors make the following statementin terms of Section 134(3)(c) of the Act
that in the preparation of the annual financial statements for the year endedMarch 31 2018 the applicable accounting standards have been followed and there are nomaterial departures from the same;
that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of your Company as at March 31 2018 andof the loss of your Company for the said year;
that proper and sufficient care has been taken 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;
that the annual accounts have been prepared on a going concern' basis;
that proper internal financial controls to be followed by the Company were laiddown and such internal financial controls are adequate and were operating effectively;
that proper systems to ensure compliance with the provisions of all applicablelaws were devised and that such systems were adequate and operating effectively.
The Board takes this opportunity to thank all its employees for their dedicated serviceand firm commitment to the goals of the Company. The Board also wishes to place on recordits sincere appreciation for the wholehearted support received from shareholders bankersall other business associates and customers. We look forward to continued support of allthese partners in progress.
| ||On behalf of the Board of Directors |
|Place : Mumbai ||Harsh Mariwala |
|Date : May 4 2018 ||Chairman & Managing Director |