To The Members
Your Directors are pleased to present the Eleventh (11th) Annual Report ofthe Company along with the Audited Financial Results for the year ended March 312019.
1. FINANCIAL RESULTS
The Company's financial performance for the year under ended March 312019 issummarized below:
(Rs. In Lakhs)
|Particulars ||Current Year 2018-2019 ||Previous Year 2017-2018 |
|Revenue from operations ||65637.47 ||57637.26 |
|Other Income ||1822.85 ||1778.57 |
|Total Revenue from operations & other income ||67460.32 ||59415.83 |
|Earnings before Interest Depreciation & Tax (EBIDTA) ||11657.49 ||13093.14 |
|Depreciation & Amortization ||1910.01 ||2096.28 |
|Finance Cost ||894.61 ||771.62 |
|Profit before Tax (PBT) ||8852.87 ||10225.24 |
|Tax Expenses/ Adjustment || || |
|1. Current Tax ||2272.37 ||3075.54 |
|2. Deferred Tax ||620.89 ||358.23 |
|Profit after Tax (PAT) ||5959.61 ||6791.47 |
|Other Comprehensive Income (net of tax) ||(40.61) ||(52.08) |
|Total Comprehensive Income ||5919.00 ||6739.39 |
|Earnings Per Share (Rs. ) - Basic ||27.46 ||31.25 |
|Earnings Per Share (Rs. ) - Diluted ||26.85 ||31.25 |
1. The financial statements of the Company have been prepared in accordance with IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 as amended and presentation requirements of Division II of schedule III ofthe Companies Act 2013 (Ind AS compliant schedule III) as applicable to financialstatement.
2. Effective from 1 April 2018 the Company has adopted Ind AS 115 using retrospectiveapproach by adjusting the opening balance of equity for the earliest prior periodpresented and the other comparative amounts disclosed in financial results for each priorperiod presented to the extent possible. To reflect the change in accounting policy inaccordance with Ind AS 115 the Company has recognised a refund liability amounting to Rs.1232.43 lakhs as at 31 March 2018 and Rs. 1790.46 lakhs as at 1 April 2017 with thecorresponding adjustment in revenue from operations. Further the Company has recognisedright to receive returned goods amounting to Rs. 942.76 lakhs as at 31 March 2018 and Rs.1489.84 as at 1 April 2017 with the corresponding adjustment to changes in inventories offinished goods work-in-progress and traded goods.
3. During the year the Company has changed the accounting policy for determining costof the manufactured finished goods from Retail method to Actual Cost method. In accordancewith Ind AS 8 the Company has applied the change in accounting policy retrospectively byadjusting the opening balance of equity for the earliest prior period presented and theother comparative amounts disclosed in financial statements for each prior periodpresented to the extent possible.
2. PERFORMANCE REVIEW
PRODUCTION AND SALES REVIEW
During the year under review your company has registered robust revenue growth ofaround 14% backed by improved traction across all business segments. The revenue fromoperations has increased to Rs. 65637.47 Lakhs from Rs. 57637.26 Lakhs achieved lastyear. The production of the Company increased from 2467312 pcs to 3223038 pcs duringthe year 2018-19 showing an increase of 30.62%.
The Company's earnings before depreciation interest and tax for the current year isRs. 11657.49 Lakhs as against Rs. 13093.14 Lakhs achieved last year. After providing fordeprecation of Rs. 1910.01 Lakhs (previous year 2096.28) finance cost of Rs. 894.61 Lakhs(previous year Rs. 771.62 Lakhs) provision for current tax of Rs. 2272.37 Lakhs (previousyear Rs. 3075.54 Lakhs) provision for deferred tax Rs. 620.89 Lakhs (previous year Rs.358.23 Lakhs) the Net Profit from the operations worked out to Rs. 5959.61 Lakhs ascompared to Rs. 6791.47 Lakhs achieved last year. The major reasons for decrease in Netprofit of the company is due to increase in advertisement costs and unspent amount of CSRfor the previous years 2016-17 2017-18 and current year 2018-19 has been paid during theyear. The other income of the Company for the said Financial Year stood at Rs. 1822.85Lakhs.
A) Fixed assets
The Net Block as at 31st March 2019 was Rs. 14949.65 Lakhs as compared to15619.89 Lakhs in the previous year.
B) Current assets
The current assets as on 31st March 2019 were Rs. 56928.82 Lakhs asagainst Rs. 50353.58 Lakhs in the previous year.
FINANCIAL CONDITION & LIQUDITY
The Company enjoys a rating of "(ICRA) AA- (pronounced double A minus)" fromICRA Limited (ICRA) for long term borrowings and "(ICRA) A1+ (pronounced ICRA A oneplus)"for short term borrowings. Management believes that the Company's liquidity andcapital resources should be sufficient to meet its expected working capital needs andother anticipated cash requirements.
The position of liquidity and capital resources of the company is given below:-
(Rs. in Lakhs)
|PARTICULARS- ||2018-19 ||2017-18 |
|Cash and Cash Equivalents || || |
|Beginning of the year ||152.23 ||69.49 |
|End of the year ||3265.54 ||152.23 |
|Net Cash provided (used) by:- || || |
|Operating activities ||12561.24 ||2386.70 |
|Investing activities ||955.16 ||2053.18 |
|Financial activities ||(10403.09) ||(4357.14) |
3. BUSINESS OUTLOOK
Brand "Monte Carlo" as you are aware has diversified its presence acrosssegments such as Woolens Cotton Home furnishings and Kids. To enhance the brandvisibility to a wider market focus is increased in southern and eastern regions byincreasing the share of "All Season" Cotton product categories growth inrevenues. The company continues to aggressively invest in brand building and marketinginitiatives and continue to enjoy strong customer response. We continue with our endeavourto build a leading branded apparel company which can fulfil all the requirements of anindividual's wardrobe and have successfully positioned as a lifestyle brand with awell-diversified product offering. Now the focus is on Retail network expansion forwhich the company has started selling products through shop in shop (SIS) Model and isfocusing on Online sales through own portal as well as Tie-ups with e-commerce portalssuch as Flipkart Jabong Myntra Amazon and Kapsons.
The Company has comprehensive range of cotton and cotton-blended products which caterto all seasons in-order to expand our all-season product range and strengthen ourpan-India operations and expect these initiatives bring meaningful contribution to ouroverall revenue in the coming years.
Your company is strongly focused on optimizing asset utilization quality efficiencyand relationships and have strong distribution network across India through 262 EBOs2500+ MBO's & distributors and 300+ national chain stores. Majority of net revenuescomes from MBOs and franchise EBOs where primarily sales is done on preorders and onoutright basis. This helps the company to remain insulated against any inventory andcredit risk. The company has sufficient capacity to grow the business over near term anddo not foresee any major capex for the next two years.
4. SHARE CAPITAL
The Authorized Share Capital of your Company as at 31st March 2019 standsat Rs. 250000000 divided into 25000000 Equity Shares of Rs. 10/- each. During theyear the Company bought-back 1000000 Equity Shares of Rs. 10/- each through the tenderoffer route from its existing shareholders. As at 31st March 2019 the IssuedSubscribed and Paid- up Equity Share Capital of the Company stood at Rs. 2073.21 Lakhsdivided into 20732064 Equity Shares of Rs. 10/- each (Restated after taking the effectof extinguishment of 1000000 equity shares pursuant to buy back).
There was neither any issue of Equity shares with differential rights as to dividendvoting or otherwise nor grant of any stock options or sweat equity under any scheme duringthe year under review.
5. BUYBACK OF EQUITY SHARES
During the year for the purpose of Buy-back of Equity shares the following SpecialResolution(s) were passed by way of a Postal Ballot:-
1. Buy-Back of 1000000 fully paid up Equity Shares of face value of Rs. 10/- each ata maximum price of Rs. 550/- (Rupees Five Hundred Fifty only) per share for an aggregatemaximum amount of upto Rs. 550000000 (Rupees Fifty Five Crores only)
2. Transfer of Rs. 24222.55 Lakhs from Special Reserve to General Reserve in terms ofprovisions of the Section 2(43) of the Companies Act 2013.
Accordingly the Company issued a public announcement dated 8 February 2019 forbuy-back of 1000000 Equity Shares of face value of Rs. 10 each from its existingshareholders as on the record date of 22 February 2019 on a proportionate basis through"Tender Offer" route in accordance with the provisions contained in theSecurities and Exchange Board of India (Buy Back of Securities) Regulations 2018 and theCompanies Act 2013 at a price of Rs. 550 per equity share aggregating to Rs. 5500 lakh.The tendering period for buy-back offer remained open from 19 March 2019 to 2 April 2019and the settlement in respect of shares bought back was completed on 10 April 2019.Extinguishment of the shares bought back has been completed on 11 April 2019. Consequentto the said buy-back and in accordance with the Ind AS 10 and 32 Rs. 100 lakhs has beenreclassified from equity and Rs. 5400 lakhs has been reclassified from other equity toother current financial liabilities.
Therefore As at 31st March 2019 the Issued Subscribed and Paid-up EquityShare Capital of the Company stood at Rs. 2073.21 Lakhs divided into 20732064 EquityShares of Rs. 10/- each.
6. DIVIDEND ON EQUITY SHARES
The company has earned a net profit of Rs. 5959.61 lakhs for the year 2018-19. With aview to plough back profits having regard to the future requirement of funds yourDirectors do not propose any dividend for the year ended 31st March 2019.
7. TRANSFER TO RESERVES
The General Reserve of the Company stood at Rs. 38134.09 Lakhs as at 31.03.2019. YourCompany has transferred a sum of Rs. 1000 Lakhs to the General Reserve out of the profitsof the Company.
8. SUBSIDIARY JOINT VENTURES OR ASSOCIATE COMPANIES
Your Company does not have any Subsidiary Joint Ventures or Associate Company
9. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATEAND THE DATE OF THIS REPORT:-
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company i.e. 31stMarch 2019 and the date of this report.
10. 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.
11. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNELS
The Board of Directors presently consists of 12 (Twelve) Directors including a Chairman& Managing Director 4 (Four) Executive Directors 1 (One) Non Executive NonIndependent Director and 6 (Six) Independent Directors.
In terms of the provision of Section 149 of the Companies Act 2013 and Regulation 17of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") your Company have 3 (Three) Women Directors on the Board namely Smt.Ruchika Oswal (DIN:00565979) Smt. Monica Oswal (DIN:00566052) and Dr. Manisha Gupta(DIN:06910242).
The Board consists of a balanced profile having specialization in different fields thatenable them to address various business needs of the Company while placing very strongemphasis on corporate governance.
The Board in its meeting held on 25.05.2018 had appointed Sh. Rishabh Oswal (DIN:03610853) as an Additional Director and designated him as an Executive Director for aperiod of 5 years w.e.f. 01.06.2018 which was subsequently approved by the Members at the10th Annual General Meeting of the Company. Also Board had taken note of Sh.Paurush Roy (DIN: 03038347) Non-Executive Director Non Independent Director of theCompany being an Independent Director of the Company for a term of 3 consecutive yearsw.e.f. 25.05.2018.
Re-appointment of Independent Directors
Based on recommendation of Nomination and Remuneration Committee the Board hasproposed for re-appointment of Independent Directors for a second term as detailed below:
|Name of Director ||Director Identification Number (DIN) of Director ||Proposed Second Term |
|Dr. Suresh Kumar Singla ||00403423 ||5 (five) consecutive years with effect from 27.06.2019 to 26.06.2024 |
|Dr. Manisha Gupta ||06910242 ||5 (five) consecutive years with effect from 27.06.2019 to 26.06.2024 |
|Sh. Alok Kumar Misra ||00163959 ||5 (five) consecutive years with effect from 09.08.2019 to 08.08.2024 |
|Dr. Amrik Singh Sohi ||03575022 ||3 (five) consecutive years with effect from 01.02.2019 to 31.01.2022 |
|Sh. Ajit Singh Chatha ||02289613 ||3 (five) consecutive years with effect from 01.04.2019 to 31.03.2022 |
The Company has received the following documents from them:
i. Consent in writing to act as Director in Form DIR- 2 pursuant to Rule 8 of theCompanies (Appointment & Qualification of Directors) Rules 2014;
ii. intimation in Form DIR-8 pursuant to terms of the Companies (Appointment &Qualification of Directors) Rules 2014 to the effect that they are not disqualified asper Section 164(2) of the Companies Act 2013; and
iii. a declaration to the effect that they meet the criteria of independence asprovided under Section 149 of the Companies Act 2013
Pursuant to Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended vide SEBI (Listing Obligations and Disclosure Requirements)(Amendment) Regulations 2018 no listed Company shall appoint a person or continue thedirectorship of any person as a Non-Executive Director who has attained the age of seventyfive years unless a Special Resolution is passed to that effect. Re-appointment of Sh.Ajit Singh Chatha (DIN: 02289613) aged about 83 years is proposed by Board in its meetingheld on Feburary 8 2019 as Independent Director for 3 (Three) consecutive years witheffect from 01.04.2019 to 31.03.2022. Therefore the approval of his re-appointment isbeing sought by a Special Resolution
In compliance with Regulation 36(3) of Listing Regulations and Secretarial Standardsbrief resumes of all the Directors proposed to be appointed / re-appointed are attachedalong with the Notice calling the ensuing Annual General Meeting.
Statement of declaration from Independent Directors
All the Independent Directors of the Company have given their respective declarationsthat they meet the criteria of Independence as provided in Section 149(6) of the Act andRegulation 16(1)(b) of the SEBI Listing Regulations
Retirement by Rotation
In accordance with the provisions of Section 152(6) of the Companies Act 2013 Sh.Sandeep Jain (DIN: 00565760) Executive Director and Sh. Dinesh Gogna (DIN: 00498670)Director of the Compay being longest in the office since their last appointments/re-appointments shall retire at the forthcoming Annual General Meeting and being eligibleoffers themselves for re-appointment on the same terms and conditions on which they wereappointed/ re-appointed.
In compliance with Regulation 36(3) of Listing Regulations and Secretarial Standardsbrief resumes of all the Directors proposed to be appointed / re-appointed are attachedalong with the Notice calling the ensuing Annual General Meeting.
Key Managerial Personnel (KMP's)
The following persons are the Key Managerial Personnel (KMP's) of the Company as onMarch 31 2019 in terms of provisions of Section 203 of the Companies Act 2013 and rulesmade there under:
|Names of KMP's ||Designation |
|Sh. Jawahar Lal Oswal ||Chairman & Managing Director |
|Sh. Sandeep Jain ||Executive Director |
|Smt. Ruchika Oswal ||Executive Director |
|Smt. Monica Oswal ||Executive Director |
|Sh. Rishabh Oswal ||Executive Director |
|Sh. Raj Kapoor Sharma1 ||Chief Financial Officer |
|Sh. Sahil Jain2 ||Company Secretary |
1. Sh. Raj Kapoor Sharma was appointed as Chief Financial Officer with effect from 30hNovember 2018.
2. Sh. Sahil Jain has resigned from the post of Company Secretary with effect from 04thApril 2019 and in his place Mr. Ankur Gauba is appointed by the Board of Directors asCompany Secretary with effect from 20h May 2019.
12. NUMBER OF BOARD MEETINGS HELD
The Board meets at regular intervals to discuss and decide on policy and strategy apartfrom other business discussions. However in case of a special and urgent business needthe Board's approval is taken by passing resolution(s) through circulation as permittedby law which is confirmed in the subsequent Board Meeting.
During the Financial Year 2018-2019 the Board met on 5 (Five) occasions viz. May 252018; July 30 2018; November 13 2018; November 30 2018 and February 08 2019. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.
13. COMMITTEES OF THE BOARD
The Company has constituted the following committees in compliance with the CompaniesAct 2013 and the Listing Regulations.
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee and
4. Corporate Social Responsibility Committee.
During the Financial Year 2018-19 there was change in composition of the Board byvirtue of resignation of Dr. Yash Paul Sachdeva (DIN: 02012337) and take note of Sh.Paurush Roy (DIN: 03038347) being an Independent Director. Accordingly after detaileddiscussion about the requirements laid down under Companies Act 2013 and SEBI (LODR)Regulations 2015 the Board of Directors in its meeting held on 25.05.2018 reconstitutedall the relevant Committees such as Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committee and Corporate Social ResponsibilityCommittee.
Apart from the aforesaid Committees of the Board the Company has also constitutedShare Transfer Committee. All these Committees have been established as a part of the bestcorporate governance practices. There have been no instances where the Board has notaccepted any recommendation of the aforesaid Committees. The details in respect to theCompositions Powers Roles and Terms of Reference etc. are provided in the CorporateGovernance Report forming part of this Report.
14. ANNUAL BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual evaluation of its own performance that of its committees and individual directors.Further the Independent Directors of the Company met once during the year on February 082019 to review the performance of the Non-executive Directors Chairman of the Company andperformance of the Board as a whole. Composition of Board / Committees Quality and timelyflow of information frequency of meetings and level of participation in discussions weresome of the parameters considered during the evaluation process.
15. NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy adopted by the Company lays down a framework inrelation to selection appointment/ reappointment of Directors Key Managerial Personneland Senior Management alongwith their remuneration. It also lays down criteria fordetermining qualifications positive attributes independence of director(s) and othermatters provided under sub section (3) of section 178 of the Companies Act 2013.
The said Policy is available on Company's website and the web link for the same is http://www.montecarlocorporate.com/pdf/NOMINATION AND REMUNERATION POLICY.pdf
16. PUBLIC DEPOSIT
During the year under review your Company has not accepted any deposits as envisagedunder Section 73 of the Companies Act 2013 and rules made there under.
17. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an adequate system of internal financial control commensurate with itssize and scale of operations procedures and policies ensuring orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of frauds and errors accuracy and completeness ofaccounting records and timely preparation of reliable financial information.
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company work performed by the Internal AuditorsStatutory Auditors and Secretarial Auditors and External Consultants including audit ofinternal financial controls over financial reporting by the Statutory Auditors and thereviews performed by the management and the Audit Committee the Board is of the opinionthat Internal Financial Controls of the Company were adequate and effective during theyear under review.
18. BUSINESS RISK MANAGEMENT
Pursuant to Section 134(3)(n) of the Companies Act 2013 your management at regularintervals evaluates various risks faced by the Company which could affect its businessoperations or threaten its existence. Major risks identified by the businesses andfunctions from time to time are systematically addressed through mitigating actions on acontinuing basis.
19. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Board has constituted a CSR Committee under Section 135 of the Companies Act2013. As per the adopted CSR policy the Company is committed to certain CSR initiativesin the fields of Medical Relief and Research Environmental Sustainability Education andSocial Upliftment etc. in collaboration with its Group Companies through the ImplementingAgency i.e Oswal Foundation. The said policy is available at http://www.montecarlocorporate.com/pdf/Corporate-Social-Responsibilitv-Policv.pdf.
The Company carries on its CSR activities through Oswal Foundation along with the othergroup companies. The Company discharges its CSR liability by either contributing theamount to the said foundation or making a provision by way of CSR reserve.
The Company was required to spend Rs. 162.71 Lakhs on account of its liability towardsCorporate Social Responsibility (CSR) for the Financial year 2018-19. Also the Companyhas contributed an amount of Rs. 5.00 lakhs as donation to Christian Medical College andHospital and Rs. 3.00 lakhs to Society for Promotion of ethical and affordable healthcare.
During the year Company has contributed a sum of Rs. 457.63 lakhs (Rs. 146.72 lakhs-unspent CSR amount for the financial year 2016-17 Rs. 156.20 Lakhs- unspent CSR amountfor the financial year 2017-18 and Rs. 154.71 Lakhs - being the prescribed CSR expenditurefor the financial Year 2018-19) to Oswal Foundation for the purposes of CSR includingpromotion of charitable hospital being run by Mohan Dai Oswal Cancer Treatment &Research Foundation.
Thus the Company has fulfilled its CSR obligations for the unspent CSR amount for thefinancial Year 2016-17 201718 and 2018-19 and complied with the provisions of section 135of the Companies Act 2013.
The Annual Report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 including a brief outline of the Company's CSR Policyis set out as Annexure-A forming part of this Report.
20. RELATED PARTY TRANSACTIONS
All the transactions entered into by the Company with its related parties during theyear under review were in the "ordinary course of the business" and on "anarm's length basis" none of which was "material" in accordance with theCompany's Related Party Transactions Policy. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2is enclosed as Annexure-B. Further there are no materially significant relatedparty transactions made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the Company atlarge.
Prior approval of the Audit Committee was also obtained for all the transactionsentered into during the year 2018-19 by the Company with its Group Companies. The detailsof all the related party transactions were placed before the Audit Committee and Board forits consideration and ratification on quarterly basis.
The details of the transactions entered with Related Parties during the year areprovided in the Company's Financial Statements at Note No. 39 of the Notes to Accounts inaccordance with the relevant Accounting Standard.
Your Company has framed a Policy on Related Party Transactions for purpose ofidentification and monitoring of such transactions in line with the requirements of theCompanies Act 2013 and Listing Regulations and the said policy is available at http://www.montecarlocorporate.com/pdf/RELATED-PARTY-TRANSACTION-POLICY.pdf.
21. PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
The Company has not given any loan guarantee or made any investment covered under theprovisions of Section 186 of the Companies Act 2013. However the detail of investmentsmade by the Company is given in the notes to the Financial Statement.
22. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of Companies Act 2013 substituted byCompanies (Amendment) Act 2017 w.e.f. July 31 2018 the Annual Return is put up on theCompany's website and can be accessed at http:// www.montecarlocorporate.com/annualreturns.php
23. INTERNAL CONTROL SYSTEM & ITS ADEQUACY
Your Company has developed a well defined Internal Control System commensurate with thesize scale and complexity
of its operations. The internal audit function is entrusted to M/s Gupta Vigg &Co. Chartered Accountants who were appointed as Internal Auditors by the Board in termsof Section 138 of the Companies Act 2013 and rules made there under. The InternalAuditors monitors and evaluates adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies of the Company.Significant audit observations are addressed to the Audit Committee and the Committeethereafter reviews the adequacy and effectiveness of the internal control systems andsuggests various measures to improve and strengthen the same.
24. CORPORATE GOVERNANCE
The Company is committed to follow the best Corporate Governance practices includingthe requirements under the SEBI Listing Regulations and the Board is responsible to ensurethe same from time to time. The Company has duly complied with the Corporate Governancerequirements. Further a separate section on Corporate Governance in compliance with theprovisions of Regulation 34 of the Listing Regulations read with Schedule V of the saidregulations alongwith a Certificate from a Practicing Company Secretary confirming thatthe Company is and has been compliant with the conditions stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 forms part of the Annual Report.
Statutory Auditors & Auditor's Report
M/s Walker Chandiok & Co. LLP (Firm Registration No: 001067N / N500013) CharteredAccountants were appointed as Statutory Auditors of the Company in the 7thAnnual General Meeting to hold office up to the conclusion of the 12th AnnualGeneral Meeting subject to ratification by shareholders each year. Accordingly the Boardof Directors based on the recommendation of the Audit Committee have proposed theratification of appointment of M/s Walker Chandiok & Co. LLP as the StatutoryAuditors by the shareholders of the Company to hold the office from the conclusion of theforthcoming Annual General Meeting till the conclusion of 12th Annual GeneralMeeting of the Company.
As per Section 40 of the Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditor is notrequired to be ratified at every AGM still the Board of Directors have proposed theratification of appointment of M/s Walker Chandiok & Co. LLP as the StatutoryAuditors to hold the office from the conclusion of the forthcoming Annual General Meetingtill the conclusion of 12th Annual General Meeting of the Company in truesense of the resolution passed by the shareholders in their 7th AGM asrecommended by the Audit Committee.
The Company has obtained from Auditors a written consent and a certificate as requiredunder the Section 139 of the Companies Act 2013 to the effect that their reappointmentif made would be within the limits and in accordance with the criteria specified underSection 141 of the Companies Act 2013.
The Auditor's Report on the Annual Accounts of the Company for the year under review isself explanatory and requires no comments. Further there are no adverse remarks orqualification in the report that calls for Board's explanation. During the year underreview there were no frauds reported by Auditors under Section 143(12) of Companies Act2013.
M/s PS. Dua & Associates Company Secretary in whole time practice were appointedas Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year2018-19 pursuant to the provisions of Section 204 of the Companies Act 2013 andCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
There has been no qualification reservation adverse remark or disclaimer given by theSecretarial Auditor in his Report for the year under review reported except that the Boardof Directors has appointed Mr. Raj Kapoor Sharma as Chief Financial Officer (KMP) on 30thNovember 2018 in their meeting to fill the vacancy caused by the resignation of Mr. RamanKumar on 13th November 2017.
The Board comments that inadvertent delay is because the Company was in search of theRight Candidate who can efficiently handle the affairs of the Company. Thereafter theCompany re-designated Sh. Raj Kapoor Sharma VicePresident- Accounts as Chief FinancialOfficer (KMP) on 30th November 2018. The Secretarial Audit Report is annexed asAnnexure-C to this report.
In terms of the Companies (Cost Records and Audit) Amendment Rules 2014 the Companyis not covered under the purview of Cost Audit.
26. LISTING OF EQUITY SHARES
The Equity Shares of the Company are listed on BSE Limited (BSE) and National StockExchange of India Limited (NSE) Mumbai and the listing fees for the Financial Year2018-2019 have been duly paid to both the Stock Exchanges.
27. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has formulated a Vigil Mechanism/ Whistle blower Policy to encourageemployees to report matters about unethical behaviour actual or suspected fraud orviolation of Company's code of conduct without the risk of subsequent victimisation anddiscrimination. The details of the same are explained in the Corporate Governance Reportand the said policy is also posted on the website of the Company i.e. www.montecarlocorporate.com.
28. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has adopted a policy against sexual harassment and constituted an InternalCompliant Committee in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. Duringthe Financial Year 2018-19 the Company has not received any complaints on the same andhence no complaint was pending as at 31st March 2019.
29. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(3) read with Schedule V of the Listing Regulations is presentedseparately and forms part of this Annual Report.
30. DISCLOSURE OF REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 is annexed hereto as Annexure-Dand forms part of this report.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure-E.
32. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the year under review your Company has duly complied with the applicableprovisions of the Secretarial Standards.
33. HUMAN RESOURCE & INDUSTRIAL RELATIONS
During the year under review your Company enjoyed cordial relationship with theworkers and employees at all levels of the organisation. A detailed section on HumanResources/Industrial Relations is provided in the Management Discussion and AnalysisReport which forms part of this Annual Rep
34. DIRECTOR'S RESPONSIBILITY STATEMENT
In compliance of Section 134(3)(c) of the Companies Act 2013 it is hereby confirmedthat:
a) In the preparation of the annual accounts for the year ended March 312019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b) The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
c) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) The directors have prepared the annual accounts on a going concern basis;
e) The directors have 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 have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
35. GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:-
1. Significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
2. Transfer of unclaimed / unpaid dividend to Investor Education and Protection Fund.
3. Change in nature of Business of Company
36. ACKNOWLEDGEMENT & APPRECIATION
Your Board is grateful to express its deep sense of gratitude and appreciation to allthe Shareholders Customers Vendors Bankers Financial Institutions and BusinessAssociates of the Company for their continued support during the relevant financial year.Your Board acknowledges support and cooperation received from all the regulatoryauthorities of the Central Government and State Government respectively.
It also express its sincere appreciation of the employees at all levels for beingencouraged to meet several challenges encountered and look forward to their valuablesupport and commitment in the times ahead.
| ||For and on behalf of Board of Directors |
| ||Jawahar Lal Oswal |
|Place: Ludhiana ||Chairman & Managing Director |
|Date : 05.08.2019 ||(DIN: 00463866) |