Your Directors have the pleasure of presenting this 25th Annual Report alongwith the Audited Financial Statements and the Auditor's Report thereon for the FinancialYear ended 31st March 2017.
|FINANCIAL PERFORMANCE: || |
Rs. in 000
|Particulars ||2016-17 ||2015-16 |
|Gross Total Income ||0 ||0 |
|Other Income ||734.35 ||420.09 |
|Profit before financial expenses depreciation and taxation ||16.36 ||3465 |
|Financial Expenses ||0 ||0 |
|Depreciation ||0 ||0 |
|Profit Before Exceptional Items and Taxation ||16.36 ||3465 |
|Exceptional Items ||0 ||0 |
|Profit Before Taxation ||16.36 ||3465 |
|Provision of Taxes ||3.12 ||0 |
|Profit After Taxation ||13.24 ||3465 |
Your Directors do not recommend any dividend for the financial year.
DIVERSIFICATION OF BUSINESS:
Members are aware that your Company has opted for complete diversification itsbusiness operations by venturing into biotechnology and/or pro-biotic sector. Accordinglyyour Company has passed a special resolution in this regard on 2nd August 2017through postal ballot process.
CHANGE IN THE PAID UP SHARE CAPITAL OF THE COMPANY:
During the year under review the paid-up capital of your Company was increased fromRs.9.739 Crores to Rs.10 Crores on account of re-issue of 260800 forfeited equity sharesto non-promoter category. The paid- up capital further increased to Rs.13 Crores as aresult of issue and allotment of 3000000 equity shares on preferential basis tonon-promoter category on August 16 2017.
As a part of diversification plans your Company has acquired 100% shareholding of'Genesis I.B.R.C. Private Limited' a Company engaged in the business areas of Pro-biotics.Consequently the said Company has become the wholly owned subsidiary of your Company witheffect from 24th June 2017. Further M/s. 'Genesis I.B.R.C. Private Limited'the wholly owned subsidiary of your Company has acquired 'Genesis Biosciences IBRC' apartnership firm engaged in manufacturing and marketing of pro-biotic products foraquaculture and fisheries.
SHIFTING OF REGISTERED OFFICE:
Members are aware that the registered office of the Company is situated in the State ofTelangana while the proposed operations of the Company will be based in the State ofAndhra Pradesh. Hence for operational convenience to explore the business opportunityavailable in the market and in overall interest of the Company your directors recommendedshifting of registered office from the State of Telangana to the State of Andhra Pradesh.Accordingly your Company has passed a special resolution in this regard on 2ndAugust 2017 through postal ballot process and is in process of making petition to theconcerned authorities of Ministry of Corporate Affairs in this regard.
The Company has neither accepted nor renewed any deposits falling within the provisionsof Sections 73 and 76 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 from the its member and public during the Financial Year.
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. P.Mastan Rao Director retires by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for reappointment. The Board recommends his re-appointmentfor the consideration of the Members of the Company at the ensuing Annual General Meeting.During the year under review Mrs. J. Vaghira Kumari has resigned as Director of theCompany with effect from 10th November 2016.
Further Mrs. A. Lakshmi Sowjanya has been co-opted as Additional Directors on 10thNovember 2016 under independent director category. She will hold the office till the dateof the forthcoming Annual General Meeting. A Notice in writing has been received from aMember signifying his intention to propose the appointment of Mrs. A. Lakshmi Sowjanya asa Director under Independent Director Category at the Annual General Meeting to holdoffice for 5 consecutive years with effect from 10th November 2016 withoutbeing subject to retirement by rotation.
The Board of Directors met 4 times during the year on 30-05-2016 12-08-201610-11-2016 and 14-02-2017. The maximum gap between any two meetings was less than 120days as stipulated under the Companies Act 2013 and Regulation 17 (2) of SEBI (LODR)Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that:
i. in the preparation of the annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed and there are nomaterial departures;
ii. accounting policies have been selected and applied consistently and judgments andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company as at 31st March 2017 and of theprofit of the Company for the year ended on that date;
iii. proper and sufficient care have been taken for the maintenance of accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany for preventing & detecting fraud and/or other irregularities;
iv. the annual accounts have been prepared on a going concern basis;
v. internal financial controls have been laid down by the Company and that suchinternal financial controls are adequate and are operating effectively; and
vi. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 and Regulation16 (b) of SEBI (LODR) Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 a structured questionnaire was prepared after taking into consideration of thevarious aspects of the Board's functioning composition of the Board and its Committeesculture execution and performance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the other Directors was carried out by the IndependentDirectors. The Board of Directors expressed their satisfaction with the evaluationprocess.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Ramasamy Koteswara Rao & Co. (fRn: 010396S)Chartered Accountants Hyderabad the Statutory Auditors of the Company hold office up tothe conclusion of the 28th Annual General Meeting. However their appointmentas Statutory Auditors of the Company is subject to ratification by the Members at everyAnnual General Meeting. The Company has received a certificate from the said Auditors thatthey are eligible to hold office as the Auditors of the Company and are not disqualifiedfor being so appointed.
Necessary resolution for ratification of appointment of the said Auditors is includedin the Notice of Annual General Meeting for seeking approval of members.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P S Rao & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith as 'Annexure I' and forms an integral part of the Board's Report.
There were no secretarial audit qualifications for the year under review.
M/s. S V P & Co. (FRN: 014048S) Chartered Accountants Hyderabad are InternalAuditors of your Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company
RISK MANAGEMENT FRAMEWORK:
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The Internal AuditReports were reviewed periodically by Audit Committee as well as by the Board. Furtherthe Board annually reviews the effectiveness of the Company's internal control system. TheDirectors and Management confirm that the Internal Financial Controls (IFC) is adequatewith respect to the operations of the Company. A report of Auditors pursuant to Section143 (3) (i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditors report.
RELATED PARTY TRANSACTIONS:
During the year under review there were no related party transactions. Hence adisclosure in Form AOC-2 is not applicable. As required under Regulation 46 (2) (g) ofSEBI (LODR) Regulations 2015 the Company has developed a Policy on Related PartyTransactions in accordance with provisions of all applicable laws for the purpose ofidentification and monitoring of such transactions. The Policy on dealing with relatedparty transactions is available on the website of the Company www.ssklifestyles.com
PARTICULARS OF EMPLOYEES AND RELATED DISCLSURES:
During the year under review your Company has not paid any managerial remuneration.Hence the disclosures in terms of provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 relating to remuneration are not applicable for the Company forthe financial year.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014
A. Conservation of Energy:
Being a wholesale and retail trading company and not involved in any industrial ormanufacturing activities the Company's activities involve very low energy consumption andhas no particulars to report regarding conservation of energy. However efforts are madeto further reduce energy consumption.
|B. Technology Absorption ||: NIL |
|C. Foreign Exchange Earnings & Outgo : || |
(In Rs. Lakhs)
| ||2016-17 ||2015-16 |
|Foreign Exchange earnings ||Nil ||Nil |
|Foreign Exchange outgo ||Nil ||Nil |
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The present financial position of your Company does not mandate the implementation ofcorporate social responsibility activities pursuant to the provisions of Section 135 andSchedule VII of the Companies Act 2013. The Company will constitute CSR Committeedevelop CSR policy and implement the CSR initiatives whenever it is applicable to theCompany.
MANAGEMENT DISCUSSION AND ANALYSIS:
During the year under review your Company has not recorded any operational income. Asyou are aware those during the year under review your Company was engaged in the businessareas of marketing distributing and trading of lifestyle products and due to variousfactors the Company is not able to carry out its business activities effectively. Henceyour Company has opted for complete diversification its business operations by venturinginto biotechnology and/or pro-biotic sector by passing a special resolution on 2nd August2017.
CORPORATE GOVERNANCE REPORT:
During the year under review the paid-up equity share capital and net worth of theCompany is not exceeding Rs. 10 Crores and 25 Crores respectively. Hence the provisionsof Para C D & E of Schedule V of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 are not applicable to theCompany.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT 9 as requiredunder Section 92 of the Companies Act 2013 is annexed herewith as 'Annexure II' to thisreport.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
None of the orders passed by the Any Regulator / Courts which would impact the futureoperations / going concern status of the Company.
Your Directors take this opportunity to record their appreciation for the continuoussupport and co-operation extended by the customers and bankers. The Directors alsoacknowledge the confidence reposed by the investors and shareholders in the Company.
| ||By Order of the Board |
|Hyderabad 16th August 2017 ||Sd/- |
| ||K Ratnakara Rao |
| ||Chairman of the Meeting |