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Your Directors here by present the33RDAnnual Report on business and operations of the Company together with the Audited statements of Accounts for the financial year ended on 31st March 2019.
During the year under review total revenue earned was Rs. 35,00,000/- and expenses was Rs. 1,47,61,612/- hence posted net loss of Rs. 1,12,61,612/-.
BRIEF DESCRIPTION OF THE COMPANYS WORKING DURING THE YEAR/STATE OF THE COMPANYS AFFAIR:
The Company does not have any significant business activity except trading.
Your Directors have not declared any dividend during the year under review due to loss incurred.
TRANSFER TO RESERVES:
The Company has not transferred any amount to Reserves for the period under review.
The issued, subscribed and paid up capital of the Company is Rs. 9600000/- (Rupees Ninety Six Lacs) divided into 960000 (Nine Lac Sixty Thousand) equity shares of Rs. 10/- each. There has been no change in the share capital of the Company during the year.
SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:
The Company does not have any subsidiary, associate companies & joint ventures.
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and theCompanies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The details of the Loans and Guarantees given during the year under review falling under Section 186 of the Companies Act, 2013 is given along with this report. The details of Investments are as mentioned in the notes of financial statements. During the year under review, the company has not provided any security falling within in purview of Section 186.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
No material changes and commitments affecting the financial position of the company have occurred between the end of financial year to which the financial statements relate and the date of the Directors Report.
SIGNIFICANT ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANYS OPERATIONS:
To the best of our knowledge, the company has not received any such orders passed by the regulators, courts or tribunals during the year, which may impact the going concern status or companys operations in future.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Companies Act, 2013, Mr. KetanbhaiSorathiya retire by rotationat the ensuing AGM and being eligible offers himself for reappointment.
Mr. RAGHAVBHAI MANIYA was appointed as an Additional Director with effect from 28.09.2018 and be and is hereby appointed as a director (Non-Executive) of the company, liable to retire by rotation.
Mr. KANUBHAI SHAMJIBHAI PATEL (DIN-08227396)and Mr.GOVINDBHAI DHANJIBHAI DHAPA (DIN-08227414) were appointed on 28.08.2018as an Additional Director of the Company and are hereby appointed as an Independent Director of the Company to hold office for five consecutive years up to the conclusion of the Annual General Meeting to be held in the calendar year 2024.
Mr. DEENABEN GANATRAand Mr. NIKUNJ NAVINBHAI SANGHANI were resigned as on 28.09.2018.
Since the Company does not have any significant business activities, hence the Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013.
COMPOSITION OF THE BOARD:
The Company has an optimum mix of Non-Executive and Independent Directors including Woman Director. All the members of theBoard are competent and are persons of repute with strength of character, professional eminence, having the expertise in theirrespective disciplines to deal with the management functions of the company. The composition of the Board of Directors as at 31st March, 2019:
|Sr. Name of No. Director||Executive/ NonExecutive/ Independent||No. of Directorships Held in Public Limited Companies (Including the Company)||
#Committee(s) position (Including the Company)
# Only Audit Committee and Stakeholders Relationship Committee has been considered as per Regulation 26 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations")
Name of other listed entities where Directors of the company are Directors and the category of Directorship:
|Sr. No. Name of Director||Name of listed entities in which the concerned Director is a Director||Category of directorship|
|1 KETANBHAI SORATHIYA||--|
|2 GOVINDBHAI DHAPA||--|
|3 KANUBHAI PATEL||--|
|4 RAGHAVBHAI MANIYA||--|
Minimum four pre-scheduled Board meetings are held annually. In case of business exigencies or urgency of matters,resolutions are passed by circulation. During the year6 (Six) number of Board meetings were held. The dates of the Board Meetings were25.05.2018, 28.07.2018, 29.08.2018, 28.09.2018, 03.11.2018 and 07.02.2019.Attendance record of Directors attending the Board meetings and Annual General Meetings:
|Name of the Director||Designation||Attendance of Board Meeting||Last AGM attendance|
|KETANBHAI SORATHIYA||Non-Executive (Director)||6||YES|
|DINABEN GANATRA||Non-Executive Independent||3||YES|
|Resigned as on 28.09.2018||Director|
|NILESHKUMAR KAVA Resigned as on 29.08.2018||Non-Executive IndependentDirector||2||NA|
|GOVINDBHAI DHAPA Appointed as on 28.09.2018||Non-Executive IndependentDirector||2||NA|
|KANUBHAI PATEL Appointed as on 28.09.2018||Non-Executive IndependentDirector||2||NA|
|RAGHAVBHAI MANIYA Appointed as on 28.09.2018||Non-Executive (Director)||2||NA|
MEETING OF INDEPENDENT DIRECTORS
The Companys Independent Directors met on February 07, 2019 without the presence of the Executive Director and the Senior Management team. The meeting was attended by majority of Independent Directors and was conducted to enable the Independent Director to discuss matters prescribed under Schedule IV to the Act and Regulation 25(3) of the SEBI (LODR) Regulation, 2015.
The Audit Committee of the reconstituted as on 28.09.2018 and presently comprises of three Directors being MR. GOVINDBHAI DHAPA, MR. KANUBHAI PATEL and MS. RAGHAVBHAI MANIYA.
Terms of Reference:
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company has revised theterms of reference of the Committee. The revised terms of reference are:
(1) oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
(2) recommendation for appointment, remuneration and terms of appointment of auditors of the company;
(3) approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(4) reviewing, with the management, the annual financial statements and auditors report thereon before submission to the board for approval, with particular reference to:
(a) matters required to be included in the directors responsibility statement to be included in the Boards report in terms of
(c) of sub-section
(3) of Section 134 of the Companies Act, 2013; 41 (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 by management;
(d) significant adjustments made in the financial statements arising out of audit findings;
(e) compliance with listing and other legal requirements relating to financial statements;
(f) disclosure of any related party transactions;
(g) modified opinion / Qualification in the draft audit report;
(5) reviewing, with the management, the quarterly financial statements before submission to the board for approval;
(6) reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the board to take up steps in this matter;
(7) reviewing and monitoring the auditors independence; performance, and effectiveness of audit process;
(8) Formulating a policy on related party transactions, which shall include materiality of related party transactions; (9) approval or any subsequent modification of transactions of the listed entity with related parties; (10) scrutiny of inter-corporate loans and investments;
(11) valuation of undertakings or assets of the company, wherever it is necessary;
(12) evaluation of internal financial controls and risk management systems;
(13) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
(14) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; (15) discussion with internal auditors of any significant findings and follow up there on;
(16) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
(17) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; (18) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(19) to review the functioning of the whistle blower mechanism;
(20) approval of appointment of Chief Financial Officer (i.e. the whole time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate; (21) reviewing the utilization of loans and/or advances from/investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as on the date of coming into force of this provision; (22) to review the compliance with the provisions of Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 at least once in a financial year and to verify that the systems for internal control are adequate and are operating effectively; (23) to carry out any other function as is mentioned in the terms of reference of the Audit Committee.
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 audit committee), submitted by management; (3) management letters / letters of internal control weaknesses issued by the statutory auditors; (4) internal audit reports relating to internal control weaknesses; and (5) the appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the audit committee; (6) statement of deviations: (a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; (b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Attendance at the Audit Committee Meetings:
During the year the Audit Committee met 4 times with attendance of the members as under:
|Name||No. of Meeting attended|
NOMINATION AND REMUNERATION COMMITTEE:
Nomination and Remuneration Committee has been re-constituted on 28.09.2018 as per the provisions of Section 178(1) of the Companies Act, 2013 to review and recommend the remuneration payable to the Executive Directors and Senior Management of the Company based on their performance and defined assessment criteria.
Nomination and Remuneration Committee of the Company presently comprises of three Directors being MR. GOVINDBHAI DHAPA, MR. KANUBHAI PATEL and MS. RAGHAVBHAI MANIYA.During the year two Meetingwere held on 29.08.2018 and 28.09.2018 and all members were remain present during the meeting.
The terms of reference of the Committee:
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company has revised the terms of reference of the Committee. The revised terms of reference are:
(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees; (2) formulation of criteria for evaluation of performance of independent directors and the board of directors; (3) devising a policy on diversity of board of directors;
(4) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the board of directors their appointment and removal; (5) Specify the manner for effective evaluation of performance of Board, its committees and individual directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance; (6) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors; (7) recommend to the board, all remuneration, in whatever form, payable to senior management; (8) to administer and supervise Employee Stock Options Schemes (ESOS) including framing of policies related to ESOS and reviewing grant of ESOS; (9) Carrying out any other function as is mentioned in the terms of reference of the Nomination and Remuneration Committee.
Nomination and Remuneration Policy:
The Committee is in process of formulating Nomination and Remuneration Policy which determines criteria inter-alia qualification, positive attributes and independence of Directors for their appointment on the Board of the Company and payment of remuneration to Directors, Key Managerial Personnel and other Employees.The Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director.
-Qualification, expertise and experience of the Directors in their respective fields; - Personal, Professional or business standing; - Diversity of the Board
In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.
REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES:
No Directors/ Key Managerial Personnel are drawing any remuneration. Hence, the informationrequired pursuant toSection 197 read with Rule 5 (1) (i) of The Companies (Appointment andRemuneration) Rules, 2014 in respect of ratio of remuneration of each director to the medianremuneration of the employees of the Company for the Financial year is not given.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Board of Directors of the Company has set up Stakeholders Relationship Committee in order to align it with the provisions of Section178 of the Companies Act, 2013. The Committee has been constituted to strengthen the investorrelations and to inter-alia, look into issues relating to shareholders grievances pertaining to transfer ofshares, non- receipt of declared dividends, non-receipt of Annual Report, issues concerning de-materializationetc.
This committee re-constituted as on 28.09.2018 and presently consists of three directors namely, MR. GOVINDBHAI DHAPA, MR. KANUBHAI PATEL and MS. RAGHAVBHAI MANIYA. Two committee meeting held on 28.07.2018 and 07.02.2019 respectively all committee members present at the meeting.
Pursuant to the provisions of the Schedule IV, clause VIII of the Companies Act, 2013 the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration Committees. The performance evaluations of Independent Directors were also carried out and the same was noted. Independent Directors in their meeting decided to bring more transparency in their performance and bring more responsibility while taking any policy decisions for the benefit of the shareholders in general.
AUDITORS AND AUDITORS REPORT:
M/S. RISHI SEKHRI AND ASSOCIATES, CHARTERED ACCOUNTANTS, MUMBAI, FRN: 128216W, be and are hereby appointed as the Statutory Auditors of the Company for a period of three years i.e. from the conclusion of this 31st Annual General Meeting till the conclusion of 34th Annual General Meeting of the Company, subject to annual ratification by the shareholders at every Annual General Meeting and at such remuneration as may be fixed by the Board of Directors of the Company on the recommendation of the Audit Committee.
However, the requirement of ratification of appointment of Statutory Auditors under proviso to Section 139 of the Companies Act, 2013 is done away with under the Companies (Amendment) Act, 2017. As such, your Board does not seek members ratification for their re-appointment.
The observations made by the Auditors in their Auditors Report and the Notes on Accounts referred to in the Auditors Report are self-explanatory and do not call for any further comments.
SECRETARIAL AUDIT AND SECRETARIAL AUDITORS REPORT:
Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Ms. HeenaPatel,Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report in the prescribed Form No MR-3 is annexed herewith.
QUALIFICATION IN SECRETARIAL AUDIT REPORT AND EXPLANATIONS BY THE BOARD:
|Sr. No. Qualifications made by Secretarial Auditor||Explanations by the Board|
|a) The Company has decided not to opt for compliance of Corporate Governance Report for the time being||The paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause. The Company has decided not to opt for compliance of Corporate Governance for the time being.|
|b) Acknowledgement for sending the notices of the Meeting of the Board and Committees are not maintained by the company.||The notice and agenda for the Board and committee meeting are sent by the email or hand delivery. The company will ensure to maintain to the acknowledgements for sending the notice of the meeting of the board and the committee.|
|c) Updating of website with regard to various policies is pending||The company will take necessary steps to update website with regard to various policies which are pending.|
|d) The company has not complied with certain regulation of SEBI (LODR), Regulation, 2015 as regards publication of Notice of Board Meeting, Notice of AGM, quarterly results.||The company will take necessary steps to comply with the same.|
|e) As per section 203(1)(i),(ii) & (iii), the Company is required to appoint Company Secretary & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer.||Since the Company does not have any significant business activities, hence the Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary.|
|f) As per section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor.||The size of operation of the Company is very small, it is not viable to appoint Internal Auditor but the Company has established the internal control system.|
|g) The company has not maintained the attendance register for Board and committee meeting||The company will take necessary steps to maintain the attendance register for board and committee meetings.|
|h) Statutory Registrar as per companies Act 2013 is yet to be updated.||The company will take necessary steps to update Statutory Register as per companies Act 2013.|
|i) Certain event based E Forms have not been filed by the company in time which were required to be filed with ROC during the audit period.||The company will ensure to file all relevant documents in time with ROC and other authorities as when required.|
COST AUDITOR AND COST AUDIT REPORT:
Cost Audit is not applicable to your Company.
INTERNAL CONTROL SYSTEMS:
As there is no significant business activities hence there was no systems set up for Internal Controls.
EXTRACT OFANNUAL RETURN:
An extract of Annual Return as prescribed under Section 92(3)of the Companies Act, 2013 (the Act) and rule 12(1) of theCompanies (Management and Administration) Rules, 2014, inthe prescribed Form No. MGT 9forming part of this report is annexed herewith.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management Discussion and Analysis forms part of the Annual Report to the shareholders and it includes discussion on matters as required under the provisions SEBI (LODR) Regulation, 2015forming part of this report is annexed herewith.
CORPORATE GOVERNANCE REPORT:
In pursuance to Regulation 15 (2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, submission of Corporate Governance report is not applicable to the listed companies which have:
a. paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore as on the last day of the previous financial year; or
b. have listed its specified securities on the SME Exchange.
Accordingly the paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance. The Company has decided not to opt for compliance of Regulation 27 (2) of SEBI (LODR)Regulation, 2015 for the time being.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Company has not developed and implemented any Corporate Social Responsibility initiative under the provisions of Section 135 of the Companies Act, 2013, read with Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014, as the said provisions are not applicable.
PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required to be given as there were no employees coming within the purview of this section.
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy, technology absorption etc. as required to be given under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are not applicable to Company, as our Company has not carried out in the manufacturing activities.
The foreign exchange earning on account of the operation of the Company during the year was Rs. Nil.
DIRECTORS RESPONSIBILITY STATEMENT:
The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation by way of notes to accounts relating to material departures;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
e) Directors have prepared the accounts on a "going concern basis".
f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.The Company has not received any sexual harassment related complaints during the year 2018-19.
DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:
Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment & Remuneration) Rules, 2014, every Listed Company mandates to disclose in the Boards Report the ratio of the remuneration of each director to the permanent employees remuneration. However, since there is no permanent employee in the Company, no disclosure under the said provision has been furnished.
BUSINESS RISK MANAGEMENT:
Since the Company does not have any significant business activities, hence the Business Risk is at the Minimal Level. Hence, no major risk factors are envisaged except for: a. Government Policies b. Human Resource Risk
As the Company does not have any significant business activity, there was no need to have a Vigil Mechanism Policy.
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, and Shareholders during the year. Your directors also wish to take on record their deep sense of appreciation for the committed services of the employees at all levels, which has made our Company successful in the business.
|For and on Behalf of the Board|
|For, CUPID TRADES AND FINANCE LIMITED|