DIRECTORS REPORT To The Members, Your Directors are pleased to present the 16th Annual Report of the company along with the Audited Financial Statements for the financial year ended March 31, 2016. 2. MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE DATE OF BALANCE SHEET AND THE DATE OF AUDIT REPORT No significant material changes and commitments have occurred between the date of the balance sheet and the date of the audit report. 3. PERFORMANCE OF THE COMPANY On Standalone basis, the total revenuefor the financial year 2015-16 at •Rs. 35775.63 Lacs was higher by 35.32% over last year (- • 26436.92 Lacs in 2014-15) while the Profit after tax (PAT) for the year was -Rs. 2167.30 Lacs, a recording growth of 363.96% over the Profit after Tax (PAT) of -• 467.13 Lacs in 2014-15. On Consolidated Basis, the total revenue for the financial year 2015-16 at -Rs. 159077.45 Lacs was higher by 266.73% over last year (-"43376.92 Lacs) while the Profit after tax (PAT) for the year was --9898.82 Lacs, a recording growth of 1406.26% over the Profit after Tax (PAT) of 657.18 Lacs in 2014-15 4. OUTLOOK The details about prospects/ outlook of your Company are provided under the Management Discussion and Analysis Report, forming part of this Annual Report 5. DIVIDEND Based on the Company's performance, the Board paid total interim dividend of -Rs. 2.00 per Equity share out of Profits of the company i.e. 100 % dividend during financial year 2015-16. (Previous year NIL). The Board in its Meeting held as on January 22, 2016 declared first interim dividend of -Rs. 0.80/-per Equity Share i.e. 40% on face value of - Rs. 2.00 per Equity share. Further, the Board in its meeting (adjourned) concluded on 9th March 2016, declared second interim dividend of -Rs. 1.20/- per Equity share i.e. 60 % on face value of -Rs. 2.00 per Equity share 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL a). Directors As per the provisions of the Companies Act, 2013, CA Arpan Shah, Professional Non-Executive Director (DIN: 06458101) retires by rotation at the ensuing 16th AGM and being eligible offers himself for re-appointment. The Board recommends the reappointment of CA Arpan Shah as Professional Non-Executive Director The Board of Directors at its meeting held on 22nd January, 2016 re-appointed Mr. Sandeep Agrawal as the Managing Director of the company (subject to the approval of members at the ensuing Annual General Meeting) for a further period of Five years commencing from 1st February 2016. As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief profile of the Directors proposed to be reappointed nature of their expertise in specific functional areas, names of the companies in which they hold directorships and shareholding are provided in the Notice attached forming part of the Annual Report. During the year, none of the directors have resigned from the board. All the Independent Directors have submitted their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. b). Key Managerial Personnel: Pursuant to Section 203 of the Companies Act, 2013, except the re-appointment of Mr. Sandeep Agrawal as the Managing Director of the company in the board meeting held on January 22nd, 2016 (subject to the approval of the members in the General Meeting) there was no change in the Key Managerial Personnel of the company. 7. NUMBER OF MEETINGS OF THE BOARD Eleven Meetings of the board of Directors were held during the year. For details of the meetings of the board, please refer to the Report on Corporate Governance which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 8. BOARD EVALUATION Pursuant to the section 134 (p) of Companies Act, 2013 read with Rule 8 (4) of Companies Accounts Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the Board Committees. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, frequency of committee meetings, their functioning etc. The evaluation of the Directors were based on their attendance and participation, acting in good faith and in the interests of the company as a whole, Exercising duties with due diligence and reasonable care, Complying with legislations and regulations in letter and spirit and such other factors. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non- independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. 9. COMMITTEES OF THE BOARD The Board has constituted various committees to support the Board in discharging its responsibilities. The following four committees are constituted by the Board: • Audit Committee • Shareholder and Investor Grievance Committee • Nomination and Remuneration Committee • Corporate Social Responsibility Committee A detailed note on the board and its committees is provided in the Corporate Governance Report forming part of this Annual Report. 10. EQUITY SHARE CAPITAL During the year under review, the face value of the Equity shares of the company was sub-divided from 10.00 to Rs. 2.00 per share by the member's resolution. After sub division, the Authorised Share Capital of the Company is •Rs. 25, 000, 00, 00/- divided into 125000000 Equity Shares of face value of • Rs. 2.00/-each and Paid up Share Capital of the company is •• 23,726,66,10/- divided into 118633305 Equity Shares of face value of •Rs. 2.00/- each. Further, Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity during the year. As on March 31st 2016, none of the Directors except Mr. Sandeep Agrawal, Managing Director, Mr. Mahendra Agrawal, Whole Time Director and CA Arpan Shah, Professional Non-Executive Director of the Company hold any shares of the Company. 11. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS The particulars of loans, guarantees and investments have been disclosed in the financial statements. 12. DEPOSITS FROM PUBLIC The Company has not accepted any deposits from public. 13. TRANSACTIONS WITH RELATED PARTIES All contracts / arrangements / transactions entered into by the Company alongwith its Subsidiaries during the financial year with related parties were in the ordinary course of business and on an arm's length basis. As provided under section 134[3][h] of the Act and Rules made there under disclosure of particulars of material transactions with related parties entered into by the Company with related partiesin FORM AOC 2annexed to this report as "Annexure A". Disclosures on related party transactions as per Accounting Standard 18 are set out in Note No. 28 to the financial statements. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board maybe accessed on the Company's website: (<http://www.kushaltradelink.com/images/pdf/9p> olicies/Policy%20on%20Related%20Party%20Tra nsactions.pdf 14. SUBSIDIARY COMPANIES During the year, a Wholly Owned Subsidiary was incorporated at Ajman, U.A.E under the name and style "KASHISH WORLDWIDE F.Z.E" (Effective date: 10.01.2016, License No.: 16816). There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Pursuant to the provisions of section 136 of the Act, the financial statements of the Company and consolidated financial statements along with documents are available on the website of the Company. 15. CORPORATE SOCIAL RESPONSIBILITY The Annual Report on Corporate Social Responsibility activities is annexed herewith as "Annexure B". Information on the composition of the Corporate Social Responsibility (CSR) Committee is provided in the Report on Corporate Governance that forms part of this Annual Report. The Corporate Social Responsibility Policyas approved by the Board may be accessed on the Company's website: (www.kushaltradelink.com) 16. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the annual return in form MGT 9 is annexed herewith as 'Annexure C'. 17. CORPORATE GOVERNANCE The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance. 18. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the report of Corporate Governance, which forms part of the Directors' report. 19. WHISTLEBLOWER/VIGIL MECHANISM In accordance with the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy to provide a mechanism to its directors, employees and other stakeholders to raise concerns about any violation of legal or regulatory requirements, misrepresentation of any financial statement and to report actual or suspected fraud orviolation of the Code of Conduct of the Company. The Whistle Blower Policy/ Vigil Mechanism Policy is available on the company's website: (<http://www.kushaltradelink.com/images/pdf/9p> olicies/Whistle%20Blower%20Policy.pdf) 20. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii. they have selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the annual accounts on a going concern basis; v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2015-16. 21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. 22. AUDITORS a). Statutory Auditors In the 15th Annual General Meeting held on 4th July, 2015, M/s. K.G Vakharia & Co., Chartered Accountants Ahmedabad having FRN: 117022W were reappointed as the Statutory Auditors of the Company until the conclusion of the 19th Annual General Meeting, subject to the Ratification of re- appointment by the members at every Annual General Meeting. Your Directors recommend the ratification of their appointment as Statutory Auditors of the Company till the conclusion of the 17th Annual General Meeting to be held in the year 2017. b). Auditor's Report The report of the Statutory Auditor along with Notes to Accounts are enclosed to this report. The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments. c). Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the board of directors in its meeting held on 28th December 2015 appointed M/S. M.S BUCHASIA & ASSOCIATES, Practising Company Secretaries, Ahmedabad (COP: 4156) as the Secretarial Auditor of the Company for the financial year 2015-16. The Secretarial Audit Report for Financial Year 2015-16 forms part of the Annual report as "Annexure D" to the Board's report. 23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Board has adopted the policies and procedure for ensuing the orderly and efficient conduct of its business, including adherence to the company's policies, the safeguarding of its assets, the prevention and detection of frauds and other irregularities and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosure. The Report on the Internal Financial Controls as per Section 143(3)(i) of the Companies Act, 2013 is enclosed as Annexure B to the Auditors Report. 24. PARTICULAR OF EMPLOYEES The information pertaining to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure E" There is no employee drawing a salary exceeding the limit prescribed under Section 197(12) read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The information on conservation of energytechnology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014 are as under: A). Conservation of Energy: The Company consumes minor power and hence no details are required to be disclosed. B). Technology Absorption: The company not being engaged in any manufacturing / service sector, no specific technology involved in the business model of the company 26. ACKNOWLEDGEMENT Your Directors would like to express their gratitude for the assistance and cooperation received from various financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. Your Directors place on record their appreciation for the committed services from every member of the Kushal family globally. For and on Behalf of the Board Sandeep Agrawal (Chairman & Managing Director) (DIN: 00239648) Place: Ahmedabad Date: May 23, 2016 |