Kothari World Finance Ltd.
|BSE: 511138||Sector: Financials|
|NSE: N.A.||ISIN Code: INE988F01017|
|BSE 00:00 | 03 Jun||Kothari World Finance Ltd|
|NSE 05:30 | 01 Jan||Kothari World Finance Ltd|
|BSE: 511138||Sector: Financials|
|NSE: N.A.||ISIN Code: INE988F01017|
|BSE 00:00 | 03 Jun||Kothari World Finance Ltd|
|NSE 05:30 | 01 Jan||Kothari World Finance Ltd|
Your Directors are pleased to present the 34th Annual Report on the business andoperations of the Company together with the Audited financial statements for the yearended 31st March 2019.
FINANCIAL SUMMARY AND HIGHLIGHTS:
A summary of the Company's financial results for the Financial Year 2018-19 is asunder:
(Rs. in Lakhs)
The Standalone Gross Revenue from operations for FY 2019 was Rs. 410.22 lakhs(Previous Year: Rs. 398.54 lakhs). The Net Profit after tax for the year stood at Rs.240.29 lakhs against Rs. 199.5 lakhs reported in the Previous Year.
The Consolidated Gross Revenue from operations for FY 2019 was Rs. 410.22 lakhs(Previous Year: Rs. 398.54) registering a growth of 2.93%. The Consolidated Net Profitafter tax stood at Rs. 253.19 lakhs (Previous Year: Rs. 206.52 lakhs).
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport.
REVIEW OF OPERATIONS/PERFORMANCE:
During the financial year under review the Company has earned total income ofRs.410.22 lakhs as compared to Rs.398.54 lakhs for the previous year.
Profit after Tax stood at Rs. 240.29 lakhs as compared to Rs.199.50 lakhs forthe previous year.
TRANSFER TO RESERVES:
The Board of Directors of your company has decided not. to transfer any amount to theReserves for the year under review.
The Directors of the Company have decided to conserve the resources and no dividend isbeing recommended for the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In terms of provisions of Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report is enclosedas a part of this report
The paid-up Equity Share Capital as at March 31 2019 stood at Rs.74375000. Duringthe year under review the Company has not issued shares or convertible securities orshares with differential voting rights nor has granted any stock options or sweat equityor warrants.
DISCLOSURE IN COMPLIANCE WITH THE ACCOUNTING STANDARD ON "RELATED PARTYDISCLOSURES"
In terms of provisions of Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the disclosure in compliance with the accounting standardon "related party disclosures" are provided in notes to accounts of Financialstatements.
DISCLOSURES RELATING TO SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
* There are no subsidiary Companies of Kothari World Finance Limited
Your Company has the following Company as its Associate Companies at the yearend. Statement containing salient features of the financial statement of the followingAssociate Companies are made in Form AOC-1 as (Part B: associates) andattached to this report as "Annexure - [D]"
* Your Company does not have any Joint Venture Company at the year end.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards issued by the Institute of Chartered Accountants of Indiaand forms an integral part of this Report
Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34(3) read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A report on Corporate Governance is included as a part ofthis Annual Report Certificate from the M/s. Uma Lodha & Co. Practicing CompanySecretaries confirming the compliance with the conditions of Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is included as a part of this report
The Company is regularly complying with Corporate Governance practices and alsouploading the information under Corporate Filing & Dissemination System (corp.filing). Your Company has also been enlisted in the new SEBI compliant redressal system(SCORES) enabling the investors to register their complaints if any for speedy redressal.
LISTING WITH STOCK EXCHANGES:
The Equity Shares of the Company continues to be listed at BSE Limited (BSE). The scripcode number of the Equity shares of the Company on BSE is 511138. The Company confirmsthat it has paid the Annual Listing Fees for the year 2018-19 to BSE Limited where theCompany's Shares are listed.
Your Company has neither accepted nor renewed any deposit within the meaning of Section73 and other applicable provisions if any of the Companies Act 2013 and the necessaryrules made there under during the year ended 31st March2019.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to Financial Statements forming a part of thisannual report
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 134(3) and 92(3) of the Act is annexed as "Annexure - [A]" whichforms an integral part of this Report and is also available on the Company's website viz. www.kothariworld.com.
In accordance with the provisions of Section 152 of the Act and the Company's Articlesof Association Mr. Nitesh Kothari Director retires by rotation at the forthcoming AnnualGeneral Meeting and being eligible offers himself for re-appointment The Board recommendshis re-appointment for the consideration of the Members of the Company at the forthcomingAnnual General Meeting. Brief profile of Mr. Nitesh Kothari has been given in the Noticeconvening the Annual General Meeting.
During the year Mr. Jayesh Gandhi resigned as an Independent Director of the Boardeffective from 2nd February2019 due to health problems. The Board places onrecord its deep appreciation for the services rendered by him during his tenure asDirector and Member of various committees of the Board of Directors of the Company.
During the year Mr Manohar Mhatre resigned as Non-Executive Director of the Boardeffective from 2nd February2019 due to other commitments. The Board places onrecord their deep appreciation for the services rendered by him during his tenure asDirector and Member of Stakeholder Relationship Committee of the Board of Directors of theCompany.
Constitution of Board of Directors as on 31st March 2019 is as follows:
KEY MANAGERIAL PERSONNEL (KMP):
The following are the Key Managerial Personnel of the Company:
In terms of provisions of Section 203 of the Companies Act 2013 Ms. Shefali Tanna wasappointed as Company Secretary & Compliance officer of the company with effect from 25thMay 2018.
Your Board of Directors duly met Four (4) times during the financial year under reviewi.e. on 25th May 2018 7th August2018 12th November2018 and 13th February 2019 respectively in respect of which proper noticeswere given and the proceedings were properly recorded and signed in the Minute Bookmaintained for the purpose. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013.
The Board of Directors have the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
The details of the Committees along with their composition as well as changes in theircomposition number of meetings and attendance at the meetings are provided in theCorporate Governance Report.
DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF CODE OF CONDUCT:
Your Company has received declarations from all the Independent Directors confirmingthat they fulfill the criteria of independence as prescribed under the provisions ofCompanies Act 2013 and Listing Regulations. The Independent Directors have also compliedwith the Code for Independent Directors prescribed in Schedule IV to the Act and Code ofConduct for directors and senior management personnel. The Independent Directors have alsoconfirmed that he/she is not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact his ability to discharge his dutieswith an objective independent judgment and without any external influence and that he/sheis independent of the management.
The Board of Directors based on the declaration(s) received from the IndependentDirectors has verified the veracity of such disclosures and confirms that the IndependentDirectors fulfill the conditions of independence specified in the Listing Regulations andare independent of the management of the Company.
The Board of Directors has carried out an annual evaluation of its own performance.Board committees and individual Directors pursuant to the provisions of Section 134 of theCompanies Act2013 and the Corporate Governance requirements as prescribed by Securitiesand Exchange Board of India ("SEBI") under Chapter II of SEBI LODR (ListingObligation and Disclosure Requirements) Regulation 2015.
The performance of the Board and its Committees was evaluated by the Board and Membersof the Committee respectively after seeking inputs from all the Directors on the basis ofthe criteria such as the Board composition functioning and structure cultureeffectiveness of board processes information and functioning etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual Directors on the basis of the criteria such as thecontribution of the individual Director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc.
In a separate meeting of independent Directors performance of non-independentDirectors performance of the Board as a whole taking into account the views of ExecutiveDirectors and Non-Executive Directors. The Board of Directors expressed their satisfactionwith the evaluation process.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Your Company understands and values Corporate Social Responsibility (CSR) initiativesof the Government and has also noted the requirements of CSR activities in terms ofCompanies Act 2013. The requirement of mandatory implementation of CSR activity ispresently not applicable to your company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO:
Conservation of energy:
Considering the nature of business activities carried out by the Company yourDirectors have nothing to report regarding conservation of energy as required under theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988.
The management keeps itself abreast of the technological advancements in the industryand has adopted the state- of-the-art transaction billing and accounting systems and alsorisk management solutions.
Foreign exchange earnings and Outgo:
a) The foreign exchange earnings - Nil (previous year Nil).
b) The foreign exchange expenditure - Nil (previous year Nil).
STATE OF AFFAIRS:
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT:
There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES:
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is set out in "Annexure - [C]" tothis Report
DIRECTORS RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Act;
(a) In the preparation of the Annual Accounts for the year ended 31st March 2019 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;
(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 and loss of the company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the Annual Accounts on a going concern basis; and
(e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND AUDITORS' REPORT:
(a) STATUTORY AUDITORS:
M/s. JMK & Co. Chartered Accountants Mumbai (Firm Registration No. 120459W) wereappointed as the Statutory Auditors of the Company for a period of five consecutive yearsat the Annual General Meeting (AGM) of the Members held on 1st September2017on a remuneration mutually agreed upon by the Board of Directors and the StatutoryAuditors. Their appointment was subject to ratification by the Members at every subsequentAGM held after the AGM held on 1st September2017. Pursuant to the amendmentsmade to Section 139 of the Companies Act 2013 by the Companies (Amendment) Act 2017effective from May 72018 the requirement of seeking ratification of the Members for theappointment of the Statutory Auditors has been withdrawn from the Statute.Hence theresolution seeking ratification of the Members for continuance of their appointment atthis AGM is not being sought
The Auditors' Report for the financial year 2018-19 does not contain anyqualification reservation or adverse remark.
( b) SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed M/s Uma Lodha & Co. Practicing Company Secretary to conduct theSecretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure- [B]" to this Report
The Secretarial Audit Report for the financial year 2018-19 does not contain anyqualification reservation or adverse remark.
In accordance with Clause 3(b)(ii) of SEBI Circular CIR/CFD/CMD1/27/2019 dated 8thFebruary2019 and Regulation 24A of SEBI (Listing Obligations and Disclosure RequirementsRegulations) 2015 M/s. Uma Lodha & Co. Practicing Company Secretary issued AnnualSecretarial Compliance Report of the Company for the year ended 31st March 2019. TheReport for the financial year 2018-19 does not contain any qualification reservation oradverse remark. The Annual Secretarial Compliance Report is annexed herewith as Annexure- D]" to this Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
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. DMS & CoChartered Accountants (Firm Registration No: 001169C) Chartered Accountant The mainthrust of internal audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observation and corrective actions taken by the management are presentedto the Audit Committee of the Board. To maintain its objectivity and independence theinternal Audit function reports to the Chairman of the Audit Committee.
REPORTING OF FRAUDS:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
In terms of provisions of section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of the Listing Obligations and Disclosure Requirements Regulations 2015 aVigil Mechanism for Directors and employees to report genuine concerns has beenestablished.
The purpose of the "Whistle blower Policy is to allow employees to raiseconcerns about unacceptable improper or unethical practices being followed in theorganization. They will be protected against any adverse action and/or discrimination as aresult of such a reporting provided it is justified and made in good faith. The Chairmanof the Audit Committee has been designated for the purpose of receiving and recording anycomplaints under this policy.
Based on the recommendations from Audit Committee the Existing Vigil Mechanism Policyhas been amended and revised policy has been adopted at the Board meeting held on 13thFebruary2019 in order to align with the amendments in Securities and Exchange Board ofIndia (PIT) Regulations 2015. The Vigil Mechanism Policy has been uploaded on the websiteof the Company at www.kothariworld.com under investor's relations /policies/VigilMechanism.
NOMINATION REMUNERATION AND BOARD DIVERSITY POLICY:
Based on the recommendations from Nomination and Remuneration Committee Board ofDirectors has adopted revised policy at the Board meeting held on 13th February 2019which lays down a framework in relation to remuneration of Directors Key ManagerialPersonnel and Senior Management of the Company. The Policy broadly lays down the guidingprinciples philosophy and the basis for payment of remuneration to Executive andNon-executive Directors (by way of sitting fees and commission) Key Managerial PersonnelSenior Management and other employees. The policy also provides the criteria fordetermining qualifications positive attributes and Independence of Director and criteriafor appointment of Key Managerial Personnel /Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board ofDirectors while making selection of the candidates. The above policy has been posted onthe website of the Company at www.kothariworld.com under investor's relations/policies.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large.
Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee for its omnibus approval andthe particulars of contracts if any are entered during the year as per Form AOC-2 isenclosed as "Annexure - [E]". The Board of Directors of the Company atthe Board meeting held on 13th February 2019 has on the recommendation of theAudit Committee adopted a revised policy to regulate transactions between the Company andits Related Parties in compliance with the applicable provisions of the Companies Act2013 the Rules there under and the Listing Regulations. This Policy was considered andapproved by the Board has been uploaded on the website of the Company at www.kothariworld.comunder investors relations /policies/Policy on Related Party Transaction.
CODE OF CONDUCT:
The Board of Directors has approved a revised Code of Conduct which is applicable tothe Members of the Board and Senior Management. The Company believes in "ZeroTolerance" against bribery corruption and unethical dealings / behaviors of any formand the Board has laid down the directives to counter such acts. The code laid down by theBoard is known as "code of business conduct" which forms an Appendix to theCode. The Code has been posted on the Company's website www.kothariworld.com underinvestor relations /policies/Code of Conduct for Board of Directors and Senior Management.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the workplace in business practices and indealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
Pursuant to Section 134(3) (n) of the Companies Act 2013 Company has formulated RiskManagement Policy. As per Regulation 21 of the Listing Obligations and DisclosureRequirements Regulations 2015 the Company does not require to constitute a riskmanagement committee. At present the company has not identified any element of risk whichmay threaten the existence of the company.
ENVIRONMENT HEALTH AND SAFETY:
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has formulated a Policy on Prevention of Sexual Harassment at Workplace forprevention prohibition and redressal of sexual harassment at workplace in accordance withthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act;2013 (hereinafter referred to as "Prevention of Sexual Harassment Act"). As theCompany have less than 10 nos. of employees the company is not required to constituteInternal Complaints Committee (ICC).
During the year under review no complaints were reported to the Board. This Policyconsidered and approved by the Board has been uploaded on the website of the Company atwww.kothariworld.com under investor relations/policies/prevention of Sexual Harassment atworkplace.
Further pursuant to amendments in Schedule V Part C of Listing Regulations theCompany is required to disclose the number of complaints filed and disposed during thefinancial year and pending as on end of the financial year. Considering the aboveamendments to be included in the existing policy the Board of Directors of the Companyhas approved and adopted revised 'Policy on Protection of Women against Sexual Harassmentat Workplace' on 13th February 2019.
The Company is committed to providing a safe and conducive work environment to all ofits employees and associates. Further the details / disclosure pertaining to number ofcomplaints filed during the F.Y. 2018-19 disposed during the F.Y. 2018-19 and pending ason end of the financial year i.e. 31st March 2019 forms part of the CorporateGovernance Report.
PREVENTION OF INSIDER TRADING:
The Company has adopted a revised Code of Conduct for Prevention of Insider Tradingwith a view to regulate trading in securities by the Directors and designated employees ofthe Company at the Board meeting held on February 132019. The Code requires pre-clearancefor dealing in the Company's shares and prohibits the purchase or sale of Company sharesby the Directors and the designated employees while in possession of unpublished pricesensitive information in relation to the Company and during the period when the TradingWindow is closed. The Board is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
STATUTORY INFORMATION AND OTHER DISCLOSURES DISCLOSURE UNDER SECTION 43(a)(ii) OF THECOMPANIES ACT 2013
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
DISCLOSURE UNDER SECTION 54(l)(d) OF THE COMPANIES ACT 2013
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1) (d) of the Act read with Rule8(13) of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
? DISCLOSURE UNDER SECTION 62(l)(b) OF THE COMPANIES ACT 2013
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1) (b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014 is furnished.
Cost audit records are not required to be maintained by the Company.
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
Electronic copies of the Annual Report 2018-19 and the Notice of the 34th AnnualGeneral Meeting (AGM) are sent to all members whose email addresses are registered withthe Company/ Depository Participants. For members who have not registered their emailaddresses physical copies are being sent through permitted modes
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support Your Directors also wishto express our deep sense of gratitude to the Shareholders of the Company Securities andExchange Board of India BSE Limited Registrar of Companies National SecuritiesDepository Limited Central Depository Services (India) Limited M/s. Sharex Dynamic(India) Private Limited Bankers and other Government Agencies for their continuedsupport.
By Order of the Board
For Kothari World Finance Limited