Your Directors have pleasure in presenting the 37th Annual Report of yourCompany together with the Audited Statements of Accounts for the financial year endedMarch 31 2019.
| || ||(Rs in Lakh) |
|Financial Results ||Year Ended 31.03.2019 ||Year Ended 31.03.2018 |
|Sales / Revenue for the Year ||64.01 ||42.50 |
|Profit before Tax & Extraordinary Items ||4.69 ||2.72 |
|Less : Provision for Taxation (including Deferred Tax) ||1.18 ||0.61 |
|Less : Extra-Ordinary Items ||0.00 ||0.02 |
|Profit after Tax & Extra-Ordinary Items ||3.51 ||2.13 |
|Add : Profit brought forward from Previous Year ||152.47 ||150.34 |
|Profit available for appropriation ||155.98 ||152.47 |
|Transfer to Special Reserves ||- ||- |
|Balance carried forward to Next Year ||155.98 ||152.47 |
OVERVIEW OF INDIAN ECONOMY
The Indian economy started the fiscal year 2018 19 with a healthy 8.2 percent growth inthe first quarter on the back of domestic resilience. Growth eased to 7.3 percent in thesubsequent quarter due to rising global volatility largely from financial volatilitynormalized monetary policy in advanced economies externalities from trade disputes andinvestment rerouting. Further the Indian rupee suffered because of the crude price shockand conditions exacerbated as recovery in some advanced economies caused faster investmentoutflows. Notwithstanding unforeseen global events or local political surprises growthfor India is estimated to remain upward of 7 percent for the year ahead. These projectionscould be attributed to the sustained rise in consumption and a gradual revival ininvestments especially with a greater focus on infrastructure development.
With significant leakages of liquidity driven by i) RBI's foreign exchange reservesoperations (net spot sales of USD 25.6bn during Apr-Jan '19 vs. net purchase of USD 31bnduring the same time last year) and ii) increase in currency in circulation (growth ofwhich averaged c.20% during Oct-Feb '19) liquidity was constrained. The RBI intervened toconduct open-market purchases of bonds that amounted to Rs 3tn by Mar '19. With year-end(26Mar '19) the RBI introduced a new tool for liquidity management foreign exchange swapauction for injecting rupee liquidity worth Rs 345.6bn.
Bank credit growth held up relatively in FY19. As on Feb '19 bank credit growth stoodat 8.0% FYTD driven by personal loans (13.4% FYTD) and services (11.0% FYTD). Aftersubdued growth over last 2-3 years industry credit uptake witnessed some recovery with agrowth of 2.8% FYTD (supported by strong 10.7% FYTD growth exhibited by infrastructuresector). As on March 31 2019 CRR stood at 4% SLR at 19.25% repo rate at 6.25% reverserepo at 6.00% and MSF/bank rate at 6.50%.
On the external front of the economy the Re stood at 65/USD at the start of FY19.However with rising oil prices (that began at USD 67/bbl in Apr'18 but peaked to USD86/bbl in early Oct'18) and foreign capital outflows (net FII outflow worth USD 7.9bn inequity and USD 8.7bn in debt respectively during Apr-Oct'18) the Re depreciated to anall-time peak of Rs 74.39/USD in early Oct '18. Since then lower global oil demand andanticipation of excess supply by the OPEC (Organisation of the Petroleum ExportingCountries) in 2019 moderated oil prices. This has tempered concerns around the currentaccount deficit which is estimated at 2.5% of the GDP for FY19 (Union Interim Budget2019-20). Further with dovishness of the Federal Reserve since Dec '18 foreign flowspicked up-cumulative FII in equity changed from a net outflow of USD 6.7bn until Dec '18to net inflows worth USD 1.76bn by Mar'19 and the Re closed at 69.2/USD on 31Mar '19.Foreign exchange reserves settled at USD 411.9bn vs. USD 424.4bn in Mar '18.
NBFCs continued to grow their share in the financial services industry. Data publishedby the RBI in its Financial Stability Report dated 31 December 2018 show that NBFCs haveoutperformed scheduled commercial banks (SCBs) on growth in advances asset quality andprofitability. This growth momentum of NBFCs should result in their share in the financialservices sector increasing in the near future.
OVERALL PERFORMANCE & OUTLOOK
Gross Revenue from operations for the year stood at Rs 64.01 lakh in comparison to lastyear revenue of Rs 42.50 lakh. PBT Margin for the year stood at Rs 4.69 lakh in comparisonto last years' profit of Rs 2.72 lakh whereas Profit after Tax and Extra-Ordinary itemsstood at Rs 3.51 lakh in comparison to last years' figure of Rs 2.13 lakh. Your Company isengaged in the business of finance and investments. The Company is carryingtrading/investment activities in both Equity and FNO Segment and also trading inCommodities market apart from its financing activities. Management of company is continueto have positive outlook for current financial year however outcome depends entirely onthe capital market environment as well as RBI/Govt. policies on NBFC activities. Accordingto Ind AS considering that the views of the management have precedence over the erstwhilerisks and rewards model.
DIVIDEND AND RESERVES
Due to inadequate profit and in order to conserve resources to meet financialrequirements and to implement its future plans your Directors do not propose any dividendfor the year under review.
During the year under review sum of Rs Nil were transferred to Special (General)Reserves.
The paid up Equity Share Capital as on March 31 2019 was Rs 1328.4474 lakh. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on March 31 2019 none of the Directors of theCompany hold shares or convertible instruments of the Company.
Your Company is into the business of Finance & Investments in accordance with theAccounting Standard 17 notified by Companies (Accounting Standards) Rules 2006.
FINANCE AND ACCOUNTS
As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2019 has been prepared in accordance with the Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013 (hereinafterreferred to as "The Act") read with the Companies (Accounts) Rules 2014 asamended from time to time. The estimates and judgements relating to the FinancialStatements are made on a prudent basis so as to reflect in a true and fair manner theform and substance of transactions and reasonably present the Company's state of affairsprofits and cash flows for the year ended March 31 2019. The Notes to the FinancialStatements adequately cover the standalone and consolidated Audited Statements and form anintegral part of this Report.
The Company continues to focus on judicious management of its working capital.Receivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring. There is no audit qualification in the standalone financialstatements by the statutory auditors for the year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
The Company does not have any material subsidiary as defined under the ListingRegulations. However it has formulated a policy for determining its Material'Subsidiaries and the same is available on the website of the Company viz.www.khoobsuratltd.com
RELATED PARTY TRANSACTIONS
All transactions entered into with related parties as defined under the Companies Act2013 during the financial year were in the ordinary course of business and on an arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013. There were no materially significant transactions with the related partiesduring the financial year which were in conflict with the interest of the Company andhence enclosing of Form AOC-2 is not required. Suitable disclosure as required by theAccounting Standard (Ind-AS 24) has been made in the notes to the Financial Statements.All Related Party Transactions are placed before the Audit Committee for approval. Omnibusapproval was obtained on a yearly basis for transactions which are of repetitive nature.Transactions entered into pursuant to omnibus approval are verified by the Risk AssuranceDepartment and a statement giving details of all Related Party Transactions are placedbefore the Audit Committee and the Board for review and approval on a quarterly basis.None of the Directors has any pecuniary relationships or transactions vis--vis theCompany The Company has put in place a mechanism for certifying the Related PartyTransactions Statements placed before the Audit Committee and the Board of Directors froman Independent Chartered Accountant Firm. The Policy on Related Party Transactions asapproved by the Board of Directors has been uploaded on the website of the Company. Noneof the Directors has any pecuniary relationship or transactions vis--vis the Companyexcept remuneration and sitting fees.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis on the operations of the Company as prescribedunder Part B of Schedule V read with regulation 34 (3) of the Listing Regulations 2015 isprovided in a separate section and forms part of the Directors' Report.
CHANGE IN NATURE OF BUSINESS IF ANY.
There are no changes in the nature of business in the financial year 2018-19.
The Board of Directors have laid down the manner for carrying out an annual evaluationof its own performance its various Committees and individual directors pursuant to theprovisions of the Act and relevant Rules and the Corporate Governance requirements are incompliance with Regulation 17 of Listing Regulations 2015. The performance of the Boardwas evaluated by the Board after seeking inputs from all the Directors on the basis ofvarious criteria such as Board Composition process dynamics quality of deliberationsstrategic discussions effective reviews committee participation governance reviews etc.The performance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of criteria such as Committee composition processdynamics deliberation strategic discussions effective reviews etc. The Nomination andRemuneration Committee reviewed the performance of the individual Directors on the basisof the criteria such as transparency analytical capabilities performance leadershipethics and ability to take balanced decisions regarding stakeholders etc.
NUMBER OF MEETINGS OF THE BOARD
The details of the Board Meetings and other Committee Meetings held during thefinancial year 2018-19 are given in the separate section of Corporate Governance Report.
All Committees of the Board of Directors are constituted in line with the provisions ofthe Companies Act 2013 and applicable regulations of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
There is no Change in Management of the Company during the year under review.
During the current financial year Mr. Goutam Bose Managing Director of the Companyhas resigned w.e.f 23rd November 2018 and in his place Mr. Goutam Bhowal hasbeen appointed as Managing Director of the Company w.e.f. 23rd November 2018.Apart from the above there is no other change/es in composition of Board.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Further none of the Directors of the Company are disqualified under sub-section (2) ofSection 164 of the Companies Act 2013.
As per provisions of Section 149 of the 2013 Act independent directors shall holdoffice for a term up to five consecutive years on the board of a company but shall beeligible for re-appointment for another term up to five years on passing of a specialresolution by the company and disclosure of such appointment in Board's Report.
Further Section 152 of the Act provides that the independent directors shall not beliable to retire by rotation in the Annual General Meeting (AGM') of the Company.
As per requirements of Regulation 25 of SEBI LODR Regulations 2015 a person shall notserve as an independent director in more than seven listed entities: provided that anyperson who is serving as a whole time director in any listed entity shall serve as anindependent director in not more than three listed entities. Further independentdirectors of the listed entity shall hold at least one meeting in a year without thepresence of non-independent directors and members of the management and all theindependent directors shall strive to be present at such meeting. All IndependentDirectors of the Company have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16(1) (b) of theListing Regulations. In the opinion of the Board the Independent Directors fulfil theconditions of independence specified in Section 149(6) of the Act and Regulation 16(1) (b)of the Listing Regulations. The Independent Directors have also confirmed that they havecomplied with the Company's Code of Business Conduct & Ethics.
DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR
|Sl. No. ||Name ||Designation ||Date of Appointment ||Date of Resignation |
|1. ||Mr. Goutam Bose ||Managing Director ||- ||23rd Nov 2018 |
|2. ||Mr. Goutam Bhowal ||Managing Director ||23rd Nov 2018 ||- |
|3. ||Ms. Bhagyashree Hirawat ||Company Secretary & Compliance Officer ||- ||16th July 2018 |
|4. ||Ms. Sneha Gupta ||Company Secretary & Compliance Officer ||16th July 2018 ||- |
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT
There have been no material changes and commitments affecting the financial position ofthe Company between the end of Financial Year and date of the report.
CHANGE IN SITUATION OF REGISTERED OFFICE
During the year the Company has changed the situation of Registered Office within theCity limit of Kolkata.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statement in terms of Section 134(3)(c) of theCompanies Act 2013:
1. that in the preparation of the Annual Accounts for the year ended March 31 2019the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
2. 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 theprofit/(loss) of the Company for the year ended on that date;
3. that 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;
4. the annual accounts have been prepared on a going concern basis;
5. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and 6. that the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Innovation and Technology are synonymous with the Company. The investment in technologyacts as a catalyst and enables the Company to be innovative.
BUSINESS RISK MANAGEMENT
The Company is exposed to credit liquidity and interest rate risk. On the other handinvestment in Stock Market both in Quoted and Unquoted Shares have the risk of loweringthe price and value and thus can affect the profitability of the Company.
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.However the Company is not required to constitute Risk Management Committee under ListingRegulations 2015.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an Internal Control System which is commensurate with the sizescale scope and complexity of its operations. To maintain its objectivity andindependence an independent firm of Chartered accountants has been appointed as theInternal Auditors who report to the Chairman of the Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in your Company its compliance with operating systems accountingprocedures and policies of your Company. Based on the report of the Internal Auditorsplaced before the Audit Committee process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. The internal controls have beenreported by the Auditors to be adequate and effective during the year.
NOMINATION REMUNERATION AND BOARD DIVERSITY POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Policy broadly lays down the guiding principles philosophy and the basis for paymentof remuneration to Executive and Non-executive Directors (by way of sitting fees andcommission) Key Managerial Personnel Senior Management and other employees. The policyalso provides the criteria for determining qualifications positive attributes andIndependence of Director and criteria for appointment of Key Managerial Personnel / SeniorManagement and performance evaluation which are considered by the Nomination andRemuneration Committee and the Board of Directors while making selection of thecandidates. The above policy has been posted on the website of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company i.e.www.khoobsuratltd.com
RESEARCH & DEVELOPMENT
The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development and is not significant in relation to thenature size of operations of your Company.
Messrs DBS & Associates Chartered Accountants Mumbai (FRN 018627N) were appointedas Statutory Auditors of the Company for a period of five consecutive years at the 36thAnnual General Meeting (AGM) of the Members held on September 27 2018 on a remunerationmutually agreed upon by the Board of Directors and the Statutory Auditors. Theirappointment was subject to ratification by the Members at every subsequent AGM held afterthe AGM held on September 27 2018. Pursuant to the amendments made to Section 139 of theCompanies Act 2013 by the Companies (Amendment) Act 2017 effective from May 7 2018 therequirement of seeking ratification of the Members for the appointment of the StatutoryAuditors has been withdrawn from the Statute. Hence the resolution seeking ratification ofthe Members for continuance of their appointment at this AGM is not being sought. There isno audit qualification reservation or adverse remark for the year under review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Kriti Daga Company Secretaries in Practice (C. P. No. 14023) to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report isannexed in this Annual Report as Annexure II. There is no secretarial audit qualificationfor the year under review.
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted to M/s K. Ray & Co.Chartered Accountants Kolkata (FRN - 312142E). The main thrust of internal audit is totest and review controls appraisal of risks and business processes besides benchmarkingcontrols with best practices in the industry. The Audit Committee of the Board ofDirectors actively reviews the adequacy and effectiveness of the internal control systemsand suggests improvements to strengthen the same. The Company has a robust ManagementInformation System which is an integral part of the control mechanism. The AuditCommittee of the Board of Directors Statutory Auditors and the Business Heads areperiodically apprised of the internal audit findings and corrective actions taken. Auditplays a key role in providing assurance to the Board of Directors. Significant auditobservations and corrective actions taken by the management are presented to the AuditCommittee of the Board. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman of the Audit Committee.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return for the financial year ended 31st March 2019 made under theprovisions of Section 92(3) of the Act is attached as Annexure III to this report.
PARTICULARS 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 thesame is not applicable to the Company as none of employee is drawing remuneration inexcess of the limits set out in the said rules and thus no disclosure has been provided inthis Annual Report. Disclosures pertaining 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 by way of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2016 dated June 30 2016 ("AmendedManagerial Remuneration Rules 2016") the report is not applicable to the Company.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder the Companyhas not received any complaint of sexual harassment during the year under review.
STATUTORY INFORMATION AND OTHER DISCLOSURES
Since the Company is into the business of financing and investment activities in Sharesand Securities; the information regarding Conservation of Energy Technology AbsorptionAdoption and Innovation as defined under section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is reported to be NIL. TheDisclosure required under Section 197(12) of the Act read with the Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedas Annexure IV' and forms an integral part of this Report. A statement comprisingthe names of top 10 employees in terms of remuneration drawn and every persons employedthroughout the year who were in receipt of remuneration in terms of Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexure V' and forms an integral part of this annual report. The above Annexure isnot being sent along with this annual report to the members of the Company in line withthe provisions of Section 136 of the Act. Members who are interested in obtaining theseparticulars may write to the Company Secretary at the Registered Office of the Company.The aforesaid Annexure is also available for inspection by Members at the RegisteredOffice of the Company 21 days before and up to the date of the ensuing Annual GeneralMeeting during the business hours on working days. None of the employees listed in thesaid Annexure is a relative of any Director of the Company. None of the employees hold (byhimself or along with his spouse and dependent children) more than two percent of theEquity Shares of the Company.
BUSINESS RESPONSIBILITY REPORT
As the Company is not among top 500 or 1000 Companies by turnover on Stock Exchangesthe disclosure of Report under of Regulation 34(2) of the Listing Regulations is notapplicable to the Company for the year under review.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company did not earned or used any foreign exchange during the year under review.
During the year under review your Company has not accepted any deposit from the publicfalling within the ambit of Section 73 of the Companies Act 2013 and The Companies(Acceptance of Deposits) Rules 2014.
REPORT ON CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report.
Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.
Your Directors wish to place on record their appreciation towards the contribution ofall the employees of the Company and their gratitude to the Company's valued customersbankers vendors and members for their continued support and confidence in the Company.
|Kolkata May 22 2019 ||By order of the Board |
| ||For Khoobsurat Limited |
| ||Sd/- |
|Registered Office : ||Goutam Bhowal |
|7-A Bentinck Street 3rd Floor ||(DIN : 08268162) |
|Kolkata-700 001 ||Managing Director |