Your Directors present the 51st Annual Report on the working of your Companyand the Audited Statement of Accounts for the year ended 31st March 2017:
Financial Highlights fStand Alone):
|SI.No. ||Particulars ||2016-17 ||2015-16 |
|1. ||Revenue from operations ||14767.32 ||20039.83 |
| ||Other Income ||397.39 ||271.27 |
|2. ||Total Revenue ||15164.71 ||20311.10 |
|3. ||Profit /(Loss) before exceptional items and Tax ||(862.43) ||319.45 |
|4. ||Exceptional items ||- ||- |
|5. ||Profit / (Loss) after exceptional items but before tax ||(862.43) ||319.45 |
|6. ||Provision for Taxation Current Tax || || |
|7. ||Profit/(Loss)after Tax ||(862.43) ||319.45 |
| ||LESS: Income Tax for the earlier years ||1.46 ||1.01 |
| ||LESS: Prior year adjustments || || |
|8. ||Net Profit/(Loss)for the year ||(863.89) ||318.44 |
|9. ||Appropriation |
| || |
| ||Dividend Tax ||- ||- |
|10. ||Balance carried forward ||(863.89) ||318.44 |
|11. ||EPS - Basic & Diluted ||(2.57) ||0.95 |
Review of performance:
The Company has registered net income of Rs.151.64 Crores which represents a decreaseof about 25.34 % over the previous year. This has adversely impacted the financialsresulting in the net loss of Rs.8.63 crores.
Your Directors regret the inability to recommend any dividend in view of the lossincurred by the Company during the financial year.
Change in nature of business if any and material changes and commitments:
There has been no change in the nature of business during the financial year.
So also there has been no material change and commitments between 31st March2017 and 07th June 2017 impacting the financial position of the Company.
Details of significant and material Orders passed by Regulators / Courts :
a) Reduction of paid-up equity share capital :-
During June 2014 the Company filed a petition numbered 132/2014 before the Hon'bleHigh Court of Karnataka at Bangalore praying for an Order confirming the specialresolution passed by the members at the Annual General Meeting held on 30thDecember 2013 for reduction of paid-up equity share capital by cancelling 3931.042 sharesheld by the public under Section 100 read with Sections 101 to 105 of the Companies Act1956.
The Hon'ble Court vide its Order dated 07th August 2014 allowed theCompany's petition by confirming the said special resolution. Upon filing a certified copyof the said Order with the Registrar of Companies in Karnataka Bangalore the Registrarissued the Certificate of Registration dated 12th September 2014 foralteration by reduction of the paid-up equity share capital from Rs.375912370/- toRs.336601950/- . Consequently the entire paid-up share capital of the Company presentlyheld by its promoters and persons belonging to the promoter group. In compliance with theprocedure approved by the Court vide the said Order the Company has deposited the entiresum of Rs.29.48 Crores payable in respect of the shares so cancelled in a Special Accountopened with Punjab National Bank
L C Branch Bangalore.
Subsequently about 4 weeks thereafter Securities and Exchange Board of India (SEBI)filed multiple applications before the same Court for (i) impleading itself in theCompany's petition and (ii) recall and stay of the Order dated 07-08-
2014 which were all dismissed by the Court vide its subsequent Order dated 21-09-
2015. Although SEBI has filed an appeal before the Division Bench of the same Courtwhich is pending adjudication the said Order has not been stayed and is in force as anOrder-in-rem.
In the mean while the Company's consistent efforts to implement the Court's Order byfixing the Record Date first on 29-09-2014 and subsequently on 10-10-2014 07- 12-201407-04-2015 22-06-2015 and 13-10-2015 for the purpose of drawing up the list of erstwhilepublic shareholders entitled to payment in respect of the shares so cancelled have not sofar been accepted by BSE Limited reportedly at the instance of SEBI. Therefore theCompany has filed an application during July 2016 before the Hon'ble High Court ofKarnataka seeking to implead BSE Ltd in COP 132/2014 and a direction to it to accept thefresh Record Date that may be fixed by the Company. The Company Judge who heard the saidapplication on 01-06-2017 has ordered issue of notice to BSE Ltd.
The Orders of the Court as detailed above do not impact the going concern status ofthe Company.
Even though the Company has not been able to effect payment in respect of cancelledshares in dematerialized mode owing to the procedural impediment of non acceptance ofRecord Date (fixed by the Company in six attempts) by BSE Ltd considering that thecompany has been receiving incessant and anxious queries from the persons entitled topayment and in view of the fact that the Order dt.07.08.2014 passed by the Hon'ble HighCourt of Karnataka in COP 132/2014 in the matter of Reduction of paid-up equity sharecapital is in force as Order-in-Rem and there were no legal and/or procedural impedimentto effect payment in respect of cancelled shares held only in physical mode by theerstwhile public shareholders of the Company. In the backdrop of anxious queries receivedfrom the erstwhile public shareholders regarding the delay in payment due to them theCommittee of Board of Directors on Reduction of Capital at its meeting held on 13-03-2017decided to effect payment to those erstwhile public shareholders who surrender theiroriginal share certificates in respect of cancelled shares held in physical mode. Pursuantto the opportunity extended as above payment amounting to Rs.1119825/- has so far madein respect of 14931 cancelled shares held in physical mode out of the sum of money ofRs.29.48 Crores deposited in the Special Account.
b) Listing Agreement with stock exchanges
The Company has complied with the requirements of regulatory authorities on capitalmarkets and no penalties have been imposed during the last three years. However in thematter of compliance with the requirement of minimum public shareholding under Rule 19(2)(b) and 19(A) of Securities Contract (Regulation) Rules 1957 read with Clause 40(A) ofthe erstwhile Listing Agreement and Regulation 38 of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 SEBI vide its final order dated 24thJuly 2014 confirmed its interim order dated 04th June 2013 vide which i) thevoting right in respect of shares held by the persons in the promoters/ promoter group ofthe Company was frozen and restricted to 1/3 of the entitlement i.e. to the extent of31.38 % ii) the buying and selling or otherwise dealing in securities of the Company heldby the promoters was prohibited and iii) the promoters and directors of the Company wererestrained from holding any new position as a director in any listed company.
The Appeal filed by the Company before Securities Appellate Tribunal on the strengthof the Order dated 07th August 2014 (as reinforced vide the subsequent Orderdated 21-09-2015) passed by the Hon'ble High Court of Karnataka was disposed off by SATvide its Order dated 07-07-2016 with a direction to SEBI to consider a freshrepresentation to be filed by the Company in the matter. Pursuant to the said Order theCompany filed a detailed representation before SEBI on 27- 07-2016 and a personal hearingwas held in the matter on 08-11-2016 before the Whole-time Member. A written submissionsumming up our pleadings in the hearing has also been filed subsequently. Thereafter theWhole-time Member has passed an Order on 08-05-2017 disposing off the Company'srepresentation by confirming final Order of SEBI dt: 24-07-2014. The Company's managementhas decided to file a fresh appeal before SAT challenging the said Order dated 08-05- 2017of SEBI.
Internal Control Systems:
The Company has an adequate system of internal financial controls and procedurescommensurate with the size and nature of business. These procedures are designed to ensurethat all the assets are safeguarded protected against loss and all transactionsauthorized recorded and reported correctly. The internal control systems of the Companyare monitored reviewed and evaluated periodically by the members of the Audit Committee.
The Company did not accept any deposits from the public during the year. Further therewere no outstanding deposits pending repayment.
Changes in Directors:
The Board records its profound grief and sorrow the sad and untimely demise ofMr.K.LSrihari Vice-Chairman and Managing Director of the Company on 31-10-2016 after aperiod of illness.
Mr.Srihari as a dynamic and versatile businessman with philanthropic disposition whonot only provided inspiring leadership for Khoday India Limited but was also the pivot ofthe diversified businesses of 51 other Companies 17 Partnership Firms and 2 Family Trustsin the Khoday Group. Mr.Srihari was solely entrusted with the responsibility of treasurymanagement for Khoday India Ltd other Companies Firms and Trusts in the Khoday Group ofbusinesses.
The Board places on record its sincere and deep appreciation of the invaluablecontributions made by Mr.Srihari as Vice-chairman & Managing Director of Khoday IndiaLimited.
Re-appointment of directors retiring bv rotation:
In accordance with Article 37(A) of the Articles of Association of the CompanyMr.K.L.Ramachandra and Mr.K.S.Giridhar the Non-Executive Directors retire by rotation andbeing eligible have offered to be re-appointed at the ensuing Annual General Meeting.
The particulars of the above Directors proposed to be re-appointed are given in theseparate section relating to report on Corporate Governance.
Appointment of Company Secretary as also the Chief Financial Officer:
Pursuant to Section 203 of the Companies Act 2013 read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 which mandates the appointment ofChief Financial Officer for a Listed Company Mr.R.Venkat subramanyan Company Secretaryhas been appointed as Company's Chief Financial Officer w.e.f. 07-06-2017 and consequentlyre-designated as Company Secretary and Chief Financial Officer on the existing terms andconditions of appointment including remuneration for the time being.
Form No. AOC-2
(Pursuant to clause (h) of subsection (3)of section 134 of the Act and Rule 8(2)of the Companies (Accounts) Rules 2014)
Form AOC - 2 giving details of transactions with related parties is attached to thisreport.
Whistler Blower Mechanism :
The Company has a Whistler Blower Policy in place for vigil mechanism. as mandated byRegulation 4(2)(d)(iv) of SEBI (LO&DR) Regulations 2015.
Statutory Auditors :
It is proposed to appoint Mr.G.S.Ravikumar Chartered Accountant as Statutory Auditorsof the Company for a term of 5 consecutive years in place of the erstwhile StatutoryAuditors M/s Rangaraju and Associates whose appointment ceases at the ensuing AnnualGeneral Meeting upon completion of their maximum tenure as prescribed under Section 139(2) of the Companies Act 2013. Mr.G.S.Ravikimar has furnished the certificate ofeligibility for his appointment as required under Section 141 of the Act.
The provisions of Section 204 read with Section 134(3) of the Companies Act 2013mandates Secretarial Audit to be conducted from the financial year commencing on or after1st April 2016 by a Company Secretary in Practice. The Board at its meetingheld on 13-02-2017 has therefore appointed Mr.G.Nagaraju ( Certificate of Practice No.4025) as the Secretarial Auditor for the financial year ended 31st March 2017.The Secretarial Auditor's Report for the financial year ended 31st March 2017is annexed to this Board's Report.
Transfer to Investor Education & Protection Fund
The Company does not carry any amount representing unpaid and unclaimed dividendunpaid interest on debentures unpaid deposits etc. of the nature specified under Section125 of the Companies Act 2013.
As stated in the foregoing paragraphs the Hon'ble High Court of Karnataka at Bangalorevide its Order dated 07-08-2014 confirmed the special resolution passed by the members atthe Annual General Meeting held on 30th December 2013 for reduction of paid-upequity share capital by canceling 3931.042 shares held by the public under Section 100read with Sections 101 to 105 of the Companies Act 1956. Upon registration of the saidOrder by the Registrar of Companies in Karnataka Bangalore vide Certificate dated 12thSeptember 2014 the paid-up equity share capital of the Company stands reduced fromRs.375912370/- to Rs.336601950/- divided into 33660195 equity shares ofRs.l0/-each . The entire paid-up share capital of the Company is presently held by itspromoters and persons belonging to the promoter group.
Details of Managerial Remuneration pursuant to Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014:-
During the financial year the Company did not pay any remuneration to any of itsexecutive non-executive and independent directors excepting sitting fee paid toindependent directors for attending meetings of the Board and the Committees thereof. Thedetails of sitting fee paid are given in Corporate Governance Report annexed hereto.
There were 385 permanent employees on the rolls of the Company as at 31stMarch 2017.
No employee of the Company was in receipt of a remuneration exceeding Rs.5 lakhs permonth or Rs.60 Lakhs per annum during the financial year.
During the financial year no increase was effected in the salary of Chief OperationsOfficer Company Secretary or any Manager of the Company.
It is affirmed that the remuneration paid to the employees at all levels is as per theremuneration policy of the company.
Particulars of loans guarantees or investments:
During the financial year the Company has not given any loan or extended any guaranteeto any person. So also no fresh investment of the nature specified in Section 186 of theCompanies Act 2013 was made by the Company.
Conservation of energy technology absorption foreign exchange earnings and outgo ifany:
The information with respect to Conservation of Energy Technology Absorption ForeignExchange earnings and outgo is furnished at Annexure 'A'.
Industrial Relations were cordial throughout the year under review. Your Directorsappreciate the dedicated services and co-operation of employees at all levels.
A separate section on Corporate Governance is included as Annexure "B" to theDirector's Report. The Company has complied with the requirements of Corporate Governanceas stipulated in Regulation 27 of the SEBI (L08tDR) Regulations 2015. The Certificateobtained from the Company's Auditors on compliance with Corporate Governance requirementsis annexed thereto.
Directors' Responsibility Statement:
Pursuant to the provisions of Section 134 (5) of the Companies Act 2013
(the Act) your Directors state that:-
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there were no material departures;
ii. the accounting policies selected by them were applied consistently judgments andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company as at 31st March 2017 and of theloss incurred by the Company for the period ended the said date;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for . safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a going concern basis.
v. the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi. the Directors devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors thank the customers vendors bankers financial institutions
Central and State Governments for their continued support and co-operation extended tothe Company.
For and on behalf of the Board of Directors For Khoday India Limited
|Date: G7m June 2017 ||K.L.Ramachandra |
|Place: Bangalore ||Chairman |