Your Directors have great pleasure in presenting the 27th Annual Report ofthe business and operations of the Company together with the audited statement of accountsfor the year ended 31st March 2020.
1. STATE OF COMPANY'S AFFAIRS:
(A). Financial summary or highlights:
|Particulars || |
|Total Income ||50.97 ||46.08 |
|Profit (Loss) before interest depreciation and tax ||21.87 ||(58.46) |
|Finance cost ||- ||- |
|Depreciation ||0.16 ||0.09 |
|Profit (Loss) before Exceptional & Extra-ordinary items and tax ||21.71 ||(58.46) |
|Exceptional & Extra-ordinary items ||- ||- |
|Profit (Loss) after Exceptional & Extra-ordinary items & before tax ||21.71 ||(58.46) |
|Provision for taxation (Net of deferred tax) ||(0.06) ||2.91 |
|Profit (Loss) after tax ||21.77 ||(61.37) |
|Amount available for appropriation ||21.77 ||(61.37) |
|Appropriations: || || |
|Transfer to Statutory Reserve maintained u/s 45IC of RBI Act 1934 (including short provision for earlier years) ||4.35 ||- |
|Transfer to Statutory Reserves for shortfall for FY 2015-16 ||1.65 ||- |
|Transfer to General Reserve ||- ||- |
|Proposed dividend ||- ||- |
|Tax on proposed dividend ||- ||- |
|Balance carried to Balance Sheet || |
The Company has changed over to Ind AS accounting standards. Consequently the previousyear's figures given above have been re-stated according to the requirement of Ind ASaccounting Standards. A detailed reconciliation is given in the Statement of AccountingPolicies
(B) . Operations:
The Board wishes to record sad demise and irreparable loss of our promoter and formerDirector Shri. Ajit Kumbhat on 22.11.2019
The gross amount of loans provided by the Company stood at Rs.552.69 Lakhs as on 31stMarch 2020 as compared to Rs.566.33 Lakhs as on 31st March 2019.
(C) . Adoption of Ind-AS Standards:
The Company being a Listed Non-Banking Finance Company is required to prepare itsfinancial statements in accordance with the Ind AS standards with effect from April 12019. Accordingly your directors have framed the required policy for such adoption andtransition to Ind AS standards. The current accounts have been prepared as per Ind Asstandards.
(D). Impact of Covid-19 Pandemic:
In March 2020 the World Health Organization (WHO) declared Covid-19 to be a pandemic.It developed rapidly into a global crisis forcing Governments to enforce lockdowns of alleconomic activities. Consequent to this the Government of India declared a nation-widelockdown on March 24 2020 to prevent the spread of the virus.
This unavoidable step has caused a severe blow to the economy. For the Company thefocus immediately shifted to ensuring the health and well-being of all employees and onminimizing disruption in our operations and commitments to the customers.
Further the uncertainty created by the disruption in business activities world-over isa cause for concern for every sector and the impacts cannot be estimated at this stage.Even developed countries like US and European countries which have been severely impactedby Covid-19 are in the grip of recessionary trends. This will adversely affect the globalbusiness scenario particularly import and export. Loss of jobs and spiraling unemploymentare going to have cascading effect on every sphere of the economy.
The overall economic situation being uncertain due to Covid-19 it may impact theoperations of the Company in the current year. The Company would closely monitor suchdevelopments in economic conditions and consider their impact on its performance in thecoming months. The Company does not anticipate any challenges in its ability to continueas going concern or meeting its financial obligations.
2. EXTRACT OF ANNUAL RETURN (FORM MGT-9):
The extract of Annual Return pursuant to the provisions of sub-section (3) of section92 read with sub-rule (1) of rule 12 of the Companies (Management and Administration)Rules 2014 is furnished in Annexure-1 and is attached to this report.
3. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Board met seven times during the financial year the details of which are givenhereunder. The maximum interval between any two meetings did not exceed 120 days asprescribed in the Companies Act 2013.
|Quarter ||Date of Board Meeting |
|1st April 2019 to 30th June 2019 ||12.04.2019 |
| ||19.07.2019 |
|1st July 2019 to 30th September 2019 ||08.08.2019 |
| ||25.09.2019 |
|1st October 2019 to 31st December 2019 ||13.11.2019 |
|1st January 2020 to 31st March 2020 ||12.02.2020 |
4. COMPLIANCE WITH SECRETARIAL STANDARDS:
During the year under review the Company has followed applicable SecretarialStandards i.e. SS-1 and SS-2 relating to 'Meetings of the Board of Directors' and'General Meetings' respectively issued by the Institute of Company Secretaries of India.
5. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility statement:
(a) In the preparation of the annual accounts for the year ended 31st March 2020 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;
(e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively.
6. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLOSURES MADE BY THE STATUTORY AUDITORS:
The observations made by the auditors in their report and notes to the accountsreferred to in the Auditors Report are self-explanatory. There were no qualificationsreservations or adverse remarks made by the Auditors in their respective reports.
7. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLOSURES MADE BY THE SECRETARIAL AUDITORS:
The Secretarial Auditors have made the following observations in their report for theyear ended 31st March 2020
1. Except for general delays made in filing the e-Forms under the Companies Act 2013the Company has prima facie been regular in furnishing its required returns.
2. As informed by the management the promoters of the Company are yet to dematerializeall their share holdings in the Company.
3. The shares of the Company are suspended from trading in the Bombay Stock ExchangeLimited pursuant to the non-compliance with the provisions of the listing agreement. Asinformed by the management the Company has submitted all the required statutory returnswith the exchange and are awaiting the order for revocation of suspension.
4. With regard to compliances with other stock exchanges where the shares of theCompany were earlier listed viz. The Madras Stock Exchange Limited The Hyderabad StockExchange Limited The Coimbatore Stock Exchange Limited and The Ahmedabad Stock ExchangeLimited we have been informed that the said exchanges have been closed by the orders ofSecurities and Exchange Board of India (SEBI) and any communications with the saidexchanges are returned undelivered.
The company has initialised dematerialisation process and has lodged all physicalshares to respective demat agents of the promoters for dematerialisation. The process isin progress.
The other observations made by the secretarial auditors are self explanatory in natureand does not call for further explanation. The Directors now assure its members that theyare in the process of updating all its records and complying with various legalrequirements so as to make good the above qualifications.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
The Company being a Non-Banking Finance Company (NBFC) has in the ordinary course ofbusiness made loans or advances or given guarantees or provided securities or madeinvestments in bodies corporate and other persons during the financial year. YourDirectors would like to draw your attention to the notes to the financial statements whichsets out the details of loans and investments made.
9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and are at arm's lengthbasis. The Company presents a statement of all related party transactions before the Boardof Directors of the Company for their approval. Your Directors would like to draw yourattention to the notes to the financial statements which sets out related partydisclosures. A statement in Form AOC-2 pursuant to the provisions of clause (h) ofsub-section (3) of section 134 of the Act read with sub-rule (2) of rule 8 of theCompanies (Accounts) Rules 2014 is furnished in Annexure-2 and is attached to thisreport.
10. DETAILS OF AMOUNTS TRANSFERRED TO RESERVES:
During the financial year 2019-20 the Company made a transfer of profits to statutoryreserve maintained under section 45IC of the RBI Act amounting to Rs.6.00 lakhs. Theyear-end balance of such statutory reserve is Rs.48.72 lakhs.
In view of working capital requirements your directors do not recommend any dividendfor the financial year ended 31st March 2020.
12. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
The Company was not required to transfer any amounts in unpaid dividend accountapplication money due for refund matured deposits matured debentures and the interestaccrued thereon which have remained unclaimed or unpaid for a period of seven years toInvestor Education and Protection Fund.
13. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT (01/04/2020 to 14/08/2020):
Except as specified in Point No. 1 (D) of this report there were no material changesand commitments affecting the financial position of the Company between the period 1stApril 2020 to 14th August 2020.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOUNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013 READ WITH RULE 8(3) OF THE COMPANIES(ACCOUNTS) RULES 2014:
In terms of clause (m) of sub-section (3) of section 134 of the Companies Act 2013 andthe rules framed thereunder the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo is given below:
1). CONSERVATION OF ENERGY:
|(i) the steps taken or impact on conservation of energy; ||Your company is not engaged in any manufacturing activity and thus its operations are not energy intensive. However adequate measures are always taken to ensure optimum |
|(ii) the steps taken by the Company for utilising alternate sources of energy; |
|(iii) the capital investment on energy conservation equipments; ||utilization and maximum possible saving of energy |
2). TECHNOLOGY ABSORPTION:
|(i) the efforts made towards technology absorption; || |
|ii) the benefits derived like product improvement cost reduction product development or import substitution; || |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - ||The Company has no activity relating to technology absorption. |
|(a) the details of technology imported; |
|(b) the year of import; || |
|(c) whether the technology has been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof and || |
|(iv) the expenditure incurred on Research and Development. || |
3). FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Particulars || |
|Value of exports calculated on FOB basis ||- ||- |
|Value of Imports calculated on CIF basis: || || |
|Raw Materials ||- ||- |
|Components and Spare parts ||- ||- |
|Capital Goods ||- ||- |
|Expenditure in Foreign Currency: || || |
|Travel ||- ||- |
|Others ||- ||- |
15. DETAILS OF CHANGE IN NATURE OF BUSINESS IF ANY:
There was no change in the nature of business of the Company during the financial year.
16. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of section 152 of the Companies Act 2013 read withthe Companies (Appointment and Qualification of Directors) Rules 2014 and the Company'sArticles of Association Smt. SARIKA KUMBHAT (DIN: 08032091) retires by rotation at theforthcoming Annual General Meeting and she being eligible offers herself forre-appointment. The Board recommends the re-appointment.
Shri. S. SUNIL KUMAR (DIN: 06989391) was appointed as an Independent Director of theCompany with effect from 1st June 2018 during the financial year and his appointment wasapproved by the shareholders at their Annual General Meeting held on 25.09.2019.
Shri. SANJAY KUMBHAT (DIN: 03077193) was appointed as Managing Director of the Companyfor a period of three years with effect from 7th February 2019 during the financial yearand his appointment was approved by the shareholders at their Annual General Meeting heldon 25.09.2019.
Shri. K.N. NARAYANAN (DIN: 01543391) Director and Shri. R. VENUGOPAL (PAN:ABWPV3592R) Chief Financial Officer (CFO) of the Company resigned from the Board witheffect from 1st July 2019 during the financial year. The Board placed on record theirappreciation for the active guidance and valuable services rendered by them during theirtenure as Independent Director and Chief Financial Officer of the Company.
Shri. G. RAJASEKARAN (PAN: AEPPR8683H) was appointed as Chief Financial Officer (CFO)of the Company with effect from 1st July 2019 during the financial year.
Shri. SAKTHIVEL MURUGAN (DIN: 08531800) was appointed as an Independent Director of theCompany with effect from 8th August 2019 during the financial year and his appointmentwas approved by the shareholders at their Annual General Meeting Held on 25.09.2019.
17. EVALUATION OF THE BOARD'S PERFORMANCE:
In compliance with the Companies Act 2013 and regulation 17 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board its Committees and individual Directors was carried out during the year underreview. Questionnaire approach was adopted for said evaluations.
The Nomination and Remuneration Committee (NRC) at its meeting carried out a separateexercise for evaluating every Directors performance. The evaluation of IndependentDirectors was carried out without the presence of the said Directors. A separate meetingof the Independent Directors was convened which reviewed the performance of the Board (asa whole) the non-independent directors and the Chairman.
Some of the key criteria's for performance evaluation were as follows:
Performance evaluation of Board and Committees:
1. Degree of fulfilment of key responsibilities;
2. Board structure and composition;
3. Effectiveness of Board processes information and functioning;
4. Board Culture and Dynamics;
5. Quality of relationship between the Board and the Management; and
6. Establishment and delineation of responsibilities to committees.
Performance evaluation of Directors:
1. provide meaningful and constructive contribution and inputs in meetings;
2. display a good degree of understanding of the company industry sector geography;and
3. display independence of judgment.
18. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Independent Directors of the Company are persons of integrity possessing richexperience and expertise in the field of corporate management finance capital marketeconomic and business information.
The Company has issued appointment letter to the Independent Directors setting out indetail the terms of appointment duties roles & responsibilities and expectationsfrom the appointed Director. The Board of Directors has complete access to the informationwithin the Company. Presentations are regularly made to the Board of Directors / AuditCommittee / Nomination & Remuneration Committee / Stakeholders Relationship Committeeon various related matters where Directors have interactive sessions with the Management.
The Company does not have any subsidiary companies or associate companies or jointventures
20. INTERNAL FINANCIAL CONTROLS:
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures. The Company has in place adequate internal financialcontrols with reference to financial statements. During the year under review suchcontrols were tested and no reportable material weaknesses in the design or operation wereobserved.
This is further strengthened by periodical review of the accounts and systems byInternal Auditors M/s. RSDKE & CO (FRN: 011949S) Chartered Accountants Chennai.
The Company has neither accepted nor renewed any deposits during the financial year andas such no amount of principal or interest was outstanding as on the Balance Sheet date.
22. MATERIAL ORDERS PASSED BY REGULATORY AUTHORITIES:
There are no significant and material orders passed by the regulators or courts ortribunals during the year impacting the going concern status and Company's operations infuture.
23. RISK MANAGEMENT POLICY:
Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk Management is a structured approach to manageuncertainty. Risk Management is the process of identification assessment andprioritization of risks followed by coordinated efforts to minimize monitor and mitigatethe probability and / or impact of unfortunate events or to maximize the realization ofopportunities. Although the Company does not have a formal risk management policy but aformal enterprisewide approach to Risk Management is being adopted by the Company and keyrisks will now be managed within a unitary framework. The Company has laid down aComprehensive Risk assessment and minimization procedure which is reviewed by the Boardfrom time to time. These procedures are reviewed to ensure that executive managementcontrols risks through means of a properly defined framework. Key business risks and theirmitigation are also considered in the annual / strategic business plans and in periodicmanagement reviews
24. DETAILS OF REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements of the company during the financialyear.
25. SHARES AND SHARE CAPITAL:
a. CAPITAL STRUCTURE:
The Authorised Share Capital of your Company is Rs.1000 lakhs comprising of 100 lakhsEquity Shares of Rs.10/- each and the Paid-up Share Capital is Rs.475 lakhs comprising of47.5 lakhs Equity Shares of Rs.10/- each.
b. BUY-BACK OF SHARES:
The Company has not bought back any of its securities during the financial year.
c. SWEAT EQUITY:
The Company has not issued any Sweat Equity Shares during the financial year.
d. BONUS SHARES:
No Bonus Shares were issued during the financial year.
e. EMPLOYEES STOCK OPTION PLAN:
The Company has not provided any Stock Option Scheme to the employees during thefinancial year.
26. STATUTORY AUDITORS:
Mr. MANISH MARDIA of M/s. MARDIA & ASSOCIATES (FRN: 007888S) CharteredAccountants Chennai were appointed as the Statutory Auditors of M/s. KUMBHAT FINANCIALSERVICES LIMITED from the conclusion of the 26th Annual Meeting for a period of five yearsfrom the financial year 2019-20 to 2023-24 and ending on the date of the Annual GeneralMeeting to be held in the calendar year 2024. Their appointment was approved by themembers at the Annual General Meeting held on 25.09.2019.
27. SECRETARIAL AUDITORS:
In accordance with the provisions of section 204 of the Companies Act 2013 the Boardhas appointed M/s. ACHARYA S.K. & ASSOCIATES Company Secretaries in Whole-timePractice Kolkata as the Secretarial Auditor for the financial year 2019-20. The report ofthe Secretarial Auditor is annexed to this report.
28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The Company has adequate measures including checks and corrections in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment.
The following is a summary of sexual harassment complaints received and disposed offduring the financial year:
|- No. of Complaints received ||NIL |
|- No. of Complaints disposed off ||NIL |
|- No. of cases pending for more than 90 days ||NIL |
|- No. of workshops / awareness programmes carried out ||ONE |
|- Nature of action taken by the employer / DO ||Not Applicable |
29. RESERVE BANK OF INDIA REGULATIONS:
Your Company is generally complying with the directions of the Reserve Bank of Indiaregarding prudential norms of accounting capital adequacy ratio provisions for bad anddoubtful debts and other requirements as per the directions issued from time to time. Thecompany was invited by the Reserve Bank of India Committee for clarifications on10.01.2020 seeking prior permission on appointment of Directors Your company hadclarified the issue and is awaiting Reserve Bank of India reply.
30. CORPORATE GOVERNANCE:
Report of Corporate Governance for the financial year and Management Discussion andAnalysis are forming part of this Annual report.
31. COMPOSITION OF AUDIT COMMITTEE:
The Board has constituted the Audit Committee which comprises of Shri. SUNIL KUMAR. Sas Chairman of the Committee with effect from 1st July 2019 (Shri. K.N. NARAYANAN wasChairman of the Committee till 30th June 2019) Shri. SANJAY KUMBHAT Shri. SAKTHIVELMURUGAN and Smt. SARIKA KUMBHAT as the members of the committee. More details on thecommittee are given in the Corporate Governance Report.
32. CERTIFICATE FROM MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER:
A certificate has been obtained from Shri. SANJAY KUMBHAT (DIN: 03077193) ManagingDirector and Shri. Shri. G. RAJASEKARAN (PAN: AEPPR8683H) Chief Financial Officer asrequired under regulation 34(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 on Corporate Governance which is enclosed and is formingpart of this Report.
33. LISTING AT STOCK EXCHANGE:
The Equity Shares of the Company continue to be listed on The Bombay Stock ExchangeLimited. With regard to other stock exchanges where the shares of the Company were earlierlisted viz. The Madras Stock Exchange Limited The Hyderabad Stock Exchange Limited TheCoimbatore Stock Exchange Limited and The Ahmedabad Stock Exchange Limited your directorswould like to state that the said exchanges have been closed by the orders of Securitiesand Exchange Board of India (SEBI) and any communications with the said exchanges arereturned undelivered.
34. CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER THELISTING AGREEMENT AND THE SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS)REGULATIONS 2015:
A certificate from the Statutory Auditors of the Company regarding compliance with theCode of Corporate Governance is forming part of this annual report.
35. MANAGEMENT'S DISCUSSION AND ANALYSIS:
In terms of the provisions of regulation 34(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the required Management's Discussion andAnalysis is set out in this Annual Report.
36. DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each independent director undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in section 149(6) of the Companies Act 2013 and regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
37. EMPLOYEE REMUNERATION:
The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of sub-section (12) of section 197 of the Companies Act 2013read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report and are annexed as Annexure-3 tothis report.
38. CORPORATE SOCIAL RESPONSIBILITY:
The provisions of section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Company.
Your Directors wish to place on record their appreciation of the dedicated and untiringhard work put by the employees at all levels. Your Directors would like to thank thebanks consultants auditors and above all the shareholders and valued customers for theircontinued support and patronage.
| || |
For and on behalf of the Board
| ||(SANJAY KUMBHAT) ||(SARIKA KUMBHAT) |
| ||Managing Director ||Director |
| ||DIN:03077193 ||DIN:08032091 |
| ||Block A B Bungalow ||Block A B Bungalow |
| ||No. 234 Doshi Royale ||No. 234 Doshi Royale |
|Place: Chennai ||Kilpauk Garden Road ||Kilpauk Garden Road |
|Date : 14.08.2020 ||Chennai - 600 010. ||Chennai - 600 010. |