Omfurn India Limited
(Formerly known as Omfurn India Private Limited)
Your Directors present the 21st Annual Report (First Report as a PublicListed Company) on the business and operations of Omfurn India Limited ("theCompany") along with the audited financial statements for the Financial Year endedMarch 312018.
1. FINANCIAL PERFORMANCE:
The financial performance of the Company during the year under review is summarisedbelow:
(Rs. in Lakhs)
|Particulars ||2017-18 ||2016-17 |
|Revenue from Operations (A) ||3367.80 ||2819.06 |
|Expenditure || || |
|Production Costs ||2483.17 ||1967.73 |
|Employee Benefit Expenses ||256.43 ||243.30 |
|Administration and other Costs ||220.41 ||195.30 |
|Sub Total (B) ||2960.01 ||2406.33 |
|Profit (Loss) before Interest and Depreciation (A-B) ||407.79 ||412.73 |
|Finance Cost ||72.36 ||79.69 |
|Depreciation ||85.34 ||95.60 |
|Profit (Loss) before Tax ||250.09 ||237.44 |
|Tax Expenses ||60.09 ||76.50 |
|Profit(Loss) after Tax ||190.00 ||160.94 |
|Add: Opening balance of profit and Loss Account ||1072.57 ||1361.63 |
|Less: Utilised for Issue of Bonus Shares ||- ||(450.00) |
|Balance Carried to Balance Sheet ||1262.57 ||1072.57 |
2. COMPANY'S PERFORMANCE REVIEW:
During the year under review the revenue from operations of the Company is Rs.3296.64 Lakhs as against Rs. 2723.44 Lakhs in the previous year-a growth of 21.05%. Theprofit before tax of the Company is Rs. 250.09 Lakhs as against Rs. 237.43 Lakhs in theprevious year a growth of 5.33%. The Company's policy of product innovation and the rangeof new products already introduced would yield sustainable profitability in the long run.
During the year under review the Directors have not recommended any divided tostrengthen the financial position of the Company.
4. HOLDING. SUBSIDIARIES AND ASSOCIATES:
The Company does not have any holding subsidiary and associate Company.
5. TRANSFER TO RESERVES:
During the year under review the Company has not transferred any amount to Reserves.
6. PARTICULARS OF LOANS. GUARANTEE OR INVESTMENT UNDER SECTION 186 OF THE COMPANIESACT. 2013
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 wherever applicable are given in the notes to financialstatements.
7. OTHER DISCLOSURES UNDER THE COMPANIES ACT. 2013:
i. EQUITY SHARE CAPITAL:
The Company entered the capital market with its Initial Public Offering (IPO) of1812000 equity shares of face value of Rs. 10/- and at a premium of Rs. 13/- per shareaggregating to Rs. 41676000. The holding of promoters is 73.40% and public is 26.60%.
Background on the IPO of the Company:
The issue opened for subscription on September 29 2017 and closed on October 5 2017in accordance with the Securities and Exchange Board of India(Issue of Capital andDisclosure Requirements) Regulations 2009.The equity shares have been listed on the SMEEmerge Platform of National Stock Exchange of India Ltd (NSE) w.e.f. October 13. 2017.Consequently the Company's paid up share capital has increased from Rs. 50000000/- toRs. 61812000/-. Your Directors are pleased to inform that the IPO of the Company wasfully subscribed with an over-subscription to the extent of 1.33 times over the issuesize. The response from investors was really very encouraging.
ii. EXTRACT OF THE ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of Annual Return is annexedherewith in "Annexure-A".
iii. BOARD MEETINGS:
During the year under review the Board of Directors met 5 (five) times on May 232017 June 24 2017 August 18 2017 October 10 2017 and January 27 2018. The time gapbetween two Board meetings did not exceed 120 days.
iv. GENERAL MEETINGS:
During the year under review there were 3 (three) Extra Ordinary General Meetings heldon May 30 2017 June 27 2017 and August 23 2017.
v. COMMITTEES OF THE BOARD:
The Board had constituted various committees which are as follows:
a. Audit Committee:
The Company has constituted an Audit Committee as per the provisions of Section 177 ofthe Companies Act 2013 and Regulation 18 of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015. The Committee presently comprises of following three (3)Directors:
|Name of the Directors ||Status ||Nature of Directorship |
|Mr. Umesh Madhukar Desai ||Chairman ||Non-Executive and Independent Director |
|Mr. Sudhir Jayantilal Shah ||Member ||Non-Executive and Independent Director |
|Mr. Rajendra Chitbahal Vishwakarma ||Member ||Managing Director |
The Role and powers of the committee are as under:
1) Overseeing the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statements are correct sufficient andcredible.
2) Recommending to the Board the appointment re-appointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees.
3) Approval of payment to statutory auditors for any other services rendered by thestatutory auditors.
4) Reviewing the annual financial statements before submission to the board forapproval with particular reference to:
a. Matters required to be included in the Directors Responsibility Statement in theBoard's report in terms of clause (c) of sub-section 3 of Section 134 of the CompaniesAct 2013.
b Changes if any in accounting policies and practices and reasons for the same.
c. Major accounting entries involving estimates based on the exercise of judgment bymanagement.
d. Significant adjustments made in the financial statements arising out of auditfindings.
e. Compliance with listing and other legal requirements relating to financialstatements.
f. Disclosure of any related party transactions.
g. Modified opinion(s) in the draft audit report.
5) Reviewing with the management the half yearly and annual financial statementsbefore submission to the board for approval.
6) Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offerdocument/prospectus/notice and the report submitted by the monitoring agency monitoringthe utilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter.
7) Reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process.
8) Approval of any transactions of the Company with Related Parties including anysubsequent modification thereof.
9) Scrutiny of inter-corporate loans and investments.
10) Valuation of undertakings or assets of the Company wherever it is necessary.
11) Evaluation of internal financial controls and risk management systems.
12) Reviewing with the management performance of statutory and internal auditors andadequacy of the internal control systems.
13) Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit.
14) Discussion with internal auditors on any significant findings and follow up thereon.
15) Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board.
16) Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern.
17) To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors.
18) To review the functioning of the Whistle Blower mechanism in case the same exists.
19) Approval of appointment of CFO or any other person heading the finance function ordischarging that function after assessing the qualifications experience & backgroundetc. of the candidate.
20) To overview the Vigil Mechanism of the Company and take appropriate actions in caseof repeated frivolous complaints against any Director or Employee.
21) To implement Ind AS (Indian Accounting Standards) whenever required.
22) Monitoring the end use of funds raised through public offers and related matters.
The Audit Committee shall mandatorily review the following information:
1. Management Discussion and Analysis of financial condition and results of operations.
2. Statement of significant related party transactions (as defined by the AuditCommittee) submitted by management.
3. Management letters / letters of internal control weaknesses issued by the statutoryauditors.
4. Internal audit reports relating to internal control weaknesses.
5. The appointment removal and terms of remuneration of the chief internal auditorshall be subject to review by the audit committee.
23) Statement of deviations:
a) Half yearly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1).
b) Annual statement of funds utilized for purposes other than those stated in the offerdocument/ prospectus/notice in terms of Regulation 32(7).
POWERS OF THE AUDIT COMMITTEE:
Investigating any activity within its terms of reference;
Seeking information from any employee;
Obtaining outside legal or other professional advice; and
Securing attendance of outsiders with relevant expertise if it considersnecessary.
b. Stakeholder Relationship Committee:
The Company has constituted a Stakeholders Relationship Committee as per the provisionsof Section 178(5) of the Companies Act 2013 and Regulation 20 of the SEBI (ListingObligation and Disclosure Requirements) Regulation 2015. The Committee presently comprisesof following three (3) Directors:
Name of the Directors Status Nature of Directorship
Mr. Sudhir Jayantilal Shah Chairman Non-Executive and Independent Director
Mr. Umesh Madhukar Desai Member Non-Executive and Independent Director
Mr. Rajendra Chitbahal Vishwakarma Member Managing Director
The Stakeholder Relationships Committee shall oversee all matters pertaining toinvestors of our Company. The terms of reference of the Investor Grievance Committeeinclude the following:
1. Redressal of shareholders'/investors' complaints;
2. Reviewing on a periodic basis the Approval of transfer or transmission of sharesdebentures or any other securities made by the Registrar and Share Transfer Agent;
3. Issue of duplicate certificates and new certificates on split/consolidation/renewal;
4. Non-receipt of declared dividends balance sheets of the Company; and
5. Carrying out any other function as prescribed under the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.
c. Nomination and Remuneration Committee:
The Company has constituted a Nomination and Remuneration Committee as per theprovisions of Section 178 of the Companies Act 2013 and Regulation 19 of the SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015. The Committeepresently comprises of following three (3) Directors:
|Name of the Directors ||Status ||Nature of Directorship |
|Mr. Parag Shrikrishna Edwanakar ||Chairman ||Non-Executive and Independent Director |
|Mr. Sudhir Jayantilal Shah ||Member ||Non-Executive and Independent Director |
|Mr. Umesh Madhukar Desai ||Member ||Non-Executive and Independent Director |
ROLE OF THE COMMITTEE:
Role of Nomination and Remuneration Committee are as under:
a) Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board of Directors a policy relating tothe remuneration of the directors Key Managerial Personnel and other associates.
b) Formulation of criteria for evaluation of performance of Independent Directors andthe Board of Directors.
c) Devising a policy on diversity of Board of Directors.
d) Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the Boardof Directors their appointment and removal.
e) Whether to extend or continue the term of appointment of the Independent Directoron the basis of the report of performance evaluation of Independent Directors.
f) Such other matters as may from time to time be required by any statutorycontractual or other regulatory requirements to be attended to by such committee.
vi. CHANGES IN NATURE OF BUSINESS:
There has been no change in the nature of business of the Company during the financialyear ended March 312018.
vii. RELATED PARTY TRANSACTIONS:
All the Related Party Transactions are entered are in the ordinary course of businessand at an arm's length basis and are in compliance with the applicable provisions of theCompanies Act 2013 and SEBI Listing Regulations. There are materially significant RelatedParty Transactions made by the Company with Promoters.
Omnibus approval is given by Audit Committee for the transactions which are foreseenand are repetitive in nature. A statement of all Related Party Transactions is presentedbefore the Audit Committee and the Board on a quarterly basis specifying the naturevalue and terms and conditions of the transactions. The said transactions were unanimouslyapproved by the Audit Committee as well as by the Board.
In accordance with Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014 the particulars of material contract or arrangemententered into by the Company with related parties referred to in Section 188(1) of theCompanies Act 2013 in FORM AOC-2 is annexed as "Annexure B".
8. WHISTLE BLOWER POLICY/VIGIL MECHANISM:
In compliance with the requirement of the Companies Act 2013 and SEBI ListingRegulations the Company has established a Whistle Blower Policy / Vigil Mechanism Policyand the same is placed on the web site of the Company viz. www.omfurnindia.com
A fraud and corruption free environment in a Company is the objective and in view ofthat a Vigil Mechanism (Whistle Blower) Policy has been adopted by the Board forDirectors and employees which is uploaded on the website of the companywww.omfurnindia.com pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. No complaint of this nature has been received by the Audit Committeeduring the year under review.
9. STATUTORY AUDITORS THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS AND FRAUD IFANY:
As per the requirements of the Companies Act 2013 the Audit Committee and the Board ofDirectors at their meeting held on May 11 2018 appointed M/S. Mehta Bharat &Associates Chartered Accountants (Firm Registration No. 106192W) as Statutory Auditors ofthe Company from the conclusion of this AGM till the conclusion of next AGM.
Further the report of the Statutory Auditors along with the notes is enclosed with thefinancial statements. The observations made in the Auditors' Report which containsunmodified opinion are self-explanatory and does not contain any qualification/modifiedopinion. Therefore it does not call for any further comments. Also the Auditors of theCompany have not reported any fraud as specified under Section 143(12) of the CompaniesAct 2013.
10. SECRETARIAL AUDITOR:
Pursuant to Section 204 of the Companies Act 2013 the Board of Directors had appointedMr. Prashant S. Mehta Practicing Company Secretary to undertake the Secretarial Audit ofthe Company for the period 2017-18. The Secretarial Audit Report is attached to thisreport as "Annexure-C". The Secretarial Audit Report does not contain anyqualification reservation adverse remark. Therefore it does not call for any furthercomments.
11. UPDATES ON BOARD OF DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP): a) PERFORMANCEEVALUATION:
In compliance with the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the annual evaluation has been carried out bythe Board of its own performance of its committees and Directors by way of individual andcollective feedback from Directors. The Directors expressed their satisfaction with theevaluation process.
b) DIRECTORS AND KEY MANAGERIAL PERFORMANCE:
The Composition of the Board of Directors and Key Managerial Personnel are as follow.
|Name of the Director ||Designation |
|1. Mr. Rajendra C Vishwakarma ||Managing Director |
|2. Mr. Mahendra C Vishwakarma ||Whole time Director & Chief Financial Officer |
|3. Mr. Narendra C Vishwakarma ||Director |
|4. Mr. Mahesh R Panchal ||Director |
|5. Mr. Umesh M Desai ||Independent Director |
|6. Mr. Sudhir J Shah ||Independent Director |
|7. Mr. Parag S Edwankar ||Independent Director |
|8. Ms. Sonali M Gandre ||Independent Woman Director |
|9. V Ms. Dhara P Shah ||Company Secretary |
During the year under review Mr. Ravindra C Vishwakarma and Mr. Nareshchandra Berawalaresigned from the Board with effect from June 24 2017.
RETIREMENT OF DIRECTOR BY ROTATION:
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Mahendra CVishwakarma (DIN: 00096586) Whole Time Director is liable to retire by rotation at theensuing Annual General Meeting and being eligible he has offered himself forre-appointment. Accordingly the proposal for his re-appointment has been included in theNotice convening the Annual General Meeting of the Company.
A brief resume of Mr. Mahendra C Vishwakarma seeking re-appointment is enclosedconsisting nature of expertise in specific functional areas and name of companies in whichthey hold directorship and/or membership/ chairmanships of committees of the respectiveBoards shareholding and relationship between directorship inter-se as stipulated underReg. 36(3) of the SEBI (LODR) Regulations 2015 are given in the section of notice of AGMforming part of the Annual Report.
c) CODE OF CONDUCT:
The Company has formulated a code of conduct for Board of Directors and SeniorManagerial Personnel. The confirmation of compliance of the same is obtained from allconcerned on an annual basis. All Board Members and Senior Managerial Personnel have giventheir confirmation of compliance for the year under review. The code of conduct forDirectors and Senior Managerial Personnel is also placed on the website of the Companyviz. www.omfurnindia.com .
d) FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company proactively keeps its Directors informed of the activities of the Companyits management operations and provides an overall industry perspective as well as issuesfaced by the industry. The Policy on Familiarization Programme adopted by the Board anddetails of the same are available on the Company's website under the Investors Relationssection at www.omfurnindia.com .
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of thisreport and is attached as "Annexure-D".
As per Section 73 of the Companies Act 2013 the Company has not invited/ accepted anydeposits from the public during the year ended March 312018.
14. CORPORATE SOCIAL RESPONSIBILITY:
The provisions of Section 135 of the Companies Act 2013 relating to Corporate SocialResponsibility is not applicable to the Company as the Company does not fall under thecriteria prescribed.
15. CORPORATE GOVERNANCE:
Since the Company's securities are listed on SME Emerge Platform of National StockExchange of India Limited by virtue of Regulation 15 of SEBI (Listing Obligation &Disclosure Requirements) Regulation 2015 the compliance with the corporate governanceprovisions as specified in Regulations 17 to 27 and clauses (b) to (i) of subregulation(2) of regulation 46 and Para C D and E of Schedule V are not applicable to the Company.Hence corporate governance does not form part of this Boards' Report.
16. INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS:
The Company has adequate internal financial control procedure commensurate with itssize and nature of business. These controls include well defined policies guidelinesstandard operating procedure authorization and approval procedures. The internalfinancial control of the company are adequate to ensure the accuracy and completeness ofthe accounting records timely preparation of reliable financial information preventionand detection of frauds and errors safeguarding of the assets and that the business isconducted in an orderly and efficient manner.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year under review there have been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.
18. RISK MANAGEMENT:
The Company has developed and implemented a Risk Management Policy which identifiesmajor risks which may threaten the existence of the Company. The same has also beenadopted by the Board and is also subject to its review from time to time.
19. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION-PROHIBITION& REDRESSAL) ACT. 2013 :
In line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has set up ComplaintsCommittee at its workplaces. No complaints have been received during the Financial Year2017-18.
20. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of directors has adopted the code of Internal Procedures and Conduct forregulating monitoring and reporting trading by designated persons in accordance with theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The said codelays down guidelines and procedures to be followed and disclosures to be made whiledealing with the securities of the Company. The Code of fair disclosure of unpublishedprice sensitive information is available on the Company's website under the InvestorsRelations section at www.omfurnindia.com .
21. PARTICULARS OF EMPLOYEE:
The Company has no employee who is in receipt of remuneration of Rs.850000/-per monthor Rs.10200000/ - per annum and hence the Company is not required to give informationunder Sub Rule 2 and 3 of Rule 5 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
Disclosure under Rule 5 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are disclosed in "Annexure E"
22. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:
A. CONSERVATION OF ENERGY:
(a) Steps taken or impact on conservation of energy;
The Company had strict control systems to monitor day to day power consumption. It alsoensured optimal use of energy with minimum extent of wastage as far as possible. The dayto day consumption is monitored in an effort to save energy and control cost. The Companyhas achieved a reduction in energy consumption with the use of transparent insulated rooftop.
(b) Steps taken by the company for utilising alternate sources of energy;
With the setup of Solar Plant at the new unit at Umbergaon factory the Company wasable to reduce energy consumption to a larger extent. This has resulted in savings in costby use of alternate source of energy.
(c) Capital investment on energy conservation equipments:
The Company has incurred an investment of Rs. 53.09 Lakhs for installing Solar Plant atthe new unit at Umbergaon factory. This investments in Solar Plant has helped the Companyto generate electricity as an alternate source of energy and reduce electricity costincurred in factory to a great extent.
B. TECHNOLOGY ABSORPTION:
(i) Efforts made towards technology absorption:
The Company is continuously updating itself to standardize and install requiredmachinery for manufacturing and quality control. The company has installed machinery atits new manufacturing unit at Umbergaon Factory.
(ii) Benefits derived like product improvement cost reduction product development orimport substitution;
High quality standards helps in maintaining a better image in the market and has helpedin improving the marketability of the products. There is a comprehensive quality controlto ensure that the Company's products meet international standards.
(iii) In case of imported technology:
(a) Details of technology imported and year of Import;
The Company has placed orders of Rs. 179.61 lakhs in 2017 for the import of thefollowing machines:
Linear Sander Machine;
Hydraulic Hot Press;
Cleaning Unit VEN CLEAN AIR & Spray Machine VEN SPRAY SMART;
Multi Purpose Surface Sanding Machine;
(b) Whether the technology been fully absorbed;
The Company has under taken expansion at the existing plot at GIDC Umergaon tomanufacture door frames shutters predominantly for the real estate sector. Thecommissioning of the indigenous and imported machinery as well as trial run is completedand the commercial production has commenced.
(c) If not fully absorbed areas where absorption has not taken place and the reasonsthereof; - Not Applicable.
(d) Expenditure incurred on Research and Development:
During the year under review the Company has not incurred any expenses towardsResearch and Development.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of foreign exchange earnings and outgo are as under:
( Rs. in Lakhs)
|Particulars ||2017-2018 |
|Foreign Exchange Earned ||NIL |
|Foreign Exchange used for Import Purchase and Capital Goods ||263.50 |
23. REVIEW OF A STATEMENT ON THE USAGE OF THE PROCEEDS OF THE ISSUE:
Your Company has raised funds from Initial Public Offer (IPO) aggregating to Rs.41676000 by issuing 1812000 equity shares at Rs. 23/- per share. The funds were usedto meet share issue expenses of Rs. 5804530/-. During the year under review yourcompany has under taken expansion at the existing plot at GIDC Umbergaon to manufacturedoor frames shutters predominantly for the real estate sector. The Construction work forthe proposed project erection of plant and machineries commissioning as well as trialrun is completed. The company has incurred a total cost of Rs. 70886104/- for capitalexpansion which is shown as "Capital Work in Progress" in Balance Sheet as atMarch 312018. The balance amount of proceeds of the IPO was used partly for investmentsin Capital Work in Progress and partly for meeting working capital needs of the company.
24. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors' the Directors state that:
a. In the preparation of the Annual Accounts for the period ended March 312018 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b. The Directors have 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 of the Company for that period;
c. The Directors have 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 have prepared the Annual Accounts on a going concern basis; and
e. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors take this opportunity to place on record their appreciation and sinceregratitude to the Banker and other authorities to the Company for their valuable supportand look forward to their continued co-operation in the years to come.
Your Directors acknowledge the support and co-operation received from the employees andall those who have helped in the day to day management.
FOR OMFURN INDIA LIMITED
RAJENDRA C. VISHWAKARMA
CHAIRMAN & MANAGING DIRECTOR
Date: May 112018
ANNEXURE-C TO DIRECTORS' REPORT
Form No. MR-3
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
For the Financial Year ended March 31 2018
Omfurn India Limited.
(Formerly known as Omfurn India Private Limited)
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practice by Omfurn India Limited(hereinafter called the Company'). Secretarial Audit as required under CompaniesAct 2013 was conducted in a manner that provided me a reasonable basis for evaluating thecorporate conducts/statutory compliances and expressing my opinion thereon.
The Company was originally incorporated as a Private Limited Company on November 131997 and was converted into a Public Limited Company on June 15 2017. The Company gotlisted on the SME Emerge Platform of National Stock Exchange of India Ltd (NSE')w.e.f October 13 2017.
Based on my verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the Financial Year ended on March 312018 (Audit Period')complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the Financial Year ended March 312018 as madeavailable to me according to the following provisions including any statutorymodification amendments or re-enactment thereof for the time being in force:
(i) The Companies Act 2013 (the Act') and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA') and the rules madethereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment as applicable to the Company;-
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act'):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 and amendments from time to time;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999/- Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014; Not Applicable during the Audit period;
(e) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding Companies Act and dealing with the Client;
(f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 and amendments from time to time; Not Applicable during the Auditperiod.
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; Not Applicable during the Audit period
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; Not Applicable during the Audit period.
I have relied on the representation made by the management of the Company and itsofficers for systems and mechanism formed by the Company and having regard to thecompliance system prevailing in the Company and on examination of the relevant documentsand records in pursuance thereof on test-check basis the Company has complied with thefollowing laws applicable specifically to the Company:
a. The Information Technology Act 2000;
b. The Trade Marks Act 1999;
c. Indian Stamp Act 1999;
d. Negotiable Instruments Act1881;
e. Registration Act 1908;
f. Labour Laws and other incidental laws related to labour and employees appointed bythe Company either on its payroll or on contractual basis as related to Wages BonusApprentice Gratuity Provident Fund ESIC Profession Tax compensation IndustrialDispute Act Industrial Relation Act Factories Act 1948 Contract Labour (Regulation andAbolition)Act etc;
g. The Indian Contract Act 1872;
h. Income Tax Act 1961 and other Indirect Tax laws;
i. Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013;
j. Bombay Shops and Establishments Act 1948;
k. Electricity Act 2003;
l. Factories Act 1948.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards in respect of Meeting of Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by The Institute of Company Secretaries of India.
(ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015entered into by the Company with SME Emerge platform of NSE.
To the best of my knowledge and belief during the period under review the Company hasgenerally complied with the provisions of the Act Rules Regulations GuidelinesStandards etc. mentioned above.
I further report that based on the information provided and the representation made bythe Company and also on the review of the compliance reports of Managing Director andChief Financial Officer taken on record by the Board of Directors of the Company in myopinion adequate systems and processes exist in the Company to monitor and ensurecompliance with provisions of applicable general laws like labour laws etc.
I further report that:
The Board of Directors of the Company is duly constituted with a proper balance ofExecutive Director Non-Executive Directors and Independent Directors as required underthe Act. Further the Company has appointed Key Managerial Personnel as required under theAct. The changes in the composition of the Board of Directors that took place during theperiod under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent in advance and a system exists for seeking andobtaining further information and clarifications on the agenda items before the meetingand for meaningful participation at the meeting.
Decisions at the meetings of the Board of Directors of the Company were carriedunanimously. There were no dissenting views by any member of the Board of Directors duringthe period under review.
There are adequate systems and processes in the Company commensurate with the size andoperations of the Company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.
I further report that during the year following special event had occurred:
1. The Company has been converted into public limited Company;
2. The Company entered capital market with its Initial Public Offering (IPO) of1812000 equity shares of Rs. 10/- each at a premium of Rs. 13/- per share aggregating toRs. 41676000/-. The issue opened on September 29 2017 and closed on October 5 2017and was oversubscribed by 1.33 times. The Company got listed its equity shares under SMEEmerge Platform of NSE on October 13 2017. The paid up share capital was increased fromRs. 50000000/- to 68120000/-.
Prashant S. Mehta
Membership No: A5814
Date: May 112018