Your Directors present the 51st Annual Report on the working of your Company
and the Audited Statement of Accounts for the year ended 31st March 2017:
Financial Highlights fStand Alone):
(Rs.in Lakhsj
| SI.No. |
Particulars |
2016-17 |
2015-16 |
| 1. |
Revenue from operations |
14767.32 |
20039.83 |
|
Other Income |
397.39 |
271.27 |
| 2. |
Total Revenue |
15164.71 |
20311.10 |
| 3. |
Profit /(Loss) before exceptional items and Tax |
(862.43) |
319.45 |
| 4. |
Exceptional items |
- |
- |
| 5. |
Profit / (Loss) after exceptional items but before tax |
(862.43) |
319.45 |
| 6. |
Provision for Taxation Current Tax |
|
|
| 7. |
Profit/(Loss)after Tax |
(862.43) |
319.45 |
|
LESS: Income Tax for the earlier years |
1.46 |
1.01 |
|
LESS: Prior year adjustments |
|
|
| 8. |
Net Profit/(Loss)for the year |
(863.89) |
318.44 |
| 9. |
Appropriation Dividend |
|
|
|
Dividend Tax |
- |
- |
| 10. |
Balance carried forward |
(863.89) |
318.44 |
| 11. |
EPS - Basic & Diluted |
(2.57) |
0.95 |
Review of performance:
The Company has registered net income of Rs.151.64 Crores, which represents a decrease
of about 25.34 % over the previous year. This has adversely impacted the financials,
resulting in the net loss of Rs.8.63 crores.
Dividend:
Your Directors regret the inability to recommend any dividend in view of the loss
incurred by the Company during the financial year.
Change in nature of business, if any and material changes and commitments:
There has been no change in the nature of business during the financial year.
So also there has been no material change and commitments between 31st March
2017 and 07th June 2017, impacting the financial position of the Company.
Details of significant and material Orders passed by Regulators / Courts :
a) Reduction of paid-up equity share capital :-
During June 2014, the Company filed a petition numbered 132/2014 before the Honble
High Court of Karnataka at Bangalore praying for an Order confirming the special
resolution passed by the members at the Annual General Meeting held on 30th
December 2013 for reduction of paid-up equity share capital by cancelling 39,31.042 shares
held by the public, under Section 100 read with Sections 101 to 105 of the Companies Act,
1956.
The Honble Court vide its Order dated 07th August 2014, allowed the
Companys petition by confirming the said special resolution. Upon filing a certified copy
of the said Order with the Registrar of Companies in Karnataka, Bangalore, the Registrar
issued the Certificate of Registration dated 12th September 2014, for
alteration by reduction of the paid-up equity share capital from Rs.37,59,12,370/- to
Rs.33,66,01,950/- . Consequently the entire paid-up share capital of the Company presently
held by its promoters and persons belonging to the promoter group. In compliance with the
procedure approved by the Court vide the said Order, the Company has deposited the entire
sum of Rs.29.48 Crores payable in respect of the shares so cancelled, in a Special Account
opened with Punjab National Bank,
L C Branch, Bangalore.
Subsequently , about 4 weeks thereafter, Securities and Exchange Board of India (SEBI),
filed multiple applications before the same Court for (i) impleading itself in the
Companys petition and (ii) recall and stay of the Order dated 07-08-
2014, which were all dismissed by the Court vide its subsequent Order dated 21-09-
2015. Although SEBI has filed an appeal before the Division Bench of the same Court,
which is pending adjudication, the said Order has not been stayed and is in force as an
Order-in-rem.
In the mean while, the Companys consistent efforts to implement the Courts Order by
fixing the Record Date first on 29-09-2014 and subsequently on 10-10-2014, 07- 12-2014,
07-04-2015, 22-06-2015 and 13-10-2015 for the purpose of drawing up the list of erstwhile
public shareholders entitled to payment in respect of the shares so cancelled, have not so
far been accepted by BSE Limited, reportedly at the instance of SEBI. Therefore the
Company has filed an application during July 2016 before the Honble High Court of
Karnataka, seeking to implead BSE Ltd in COP 132/2014 and a direction to it to accept the
fresh Record Date that may be fixed by the Company. The Company Judge who heard the said
application on 01-06-2017, has ordered issue of notice to BSE Ltd.
The Orders of the Court as detailed above, do not impact the going concern status of
the Company.
Even though the Company has not been able to effect payment in respect of cancelled
shares in dematerialized mode owing to the procedural impediment of non acceptance of
Record Date (fixed by the Company in six attempts) by BSE Ltd, considering that the
company has been receiving incessant and anxious queries from the persons entitled to
payment and in view of the fact that the Order dt.07.08.2014 passed by the Honble High
Court of Karnataka in COP 132/2014 in the matter of Reduction of paid-up equity share
capital, is in force as Order-in-Rem and there were no legal and/or procedural impediment
to effect payment in respect of cancelled shares held only in physical mode by the
erstwhile public shareholders of the Company. In the backdrop of anxious queries, received
from the erstwhile public shareholders regarding the delay in payment due to them, the
Committee of Board of Directors on Reduction of Capital, at its meeting held on 13-03-2017
decided to effect payment to those erstwhile public shareholders who surrender their
original share certificates in respect of cancelled shares held in physical mode. Pursuant
to the opportunity extended as above, payment amounting to Rs.11,19,825/- has so far made
in respect of 14,931 cancelled shares held in physical mode out of the sum of money of
Rs.29.48 Crores deposited in the Special Account.
b) Listing Agreement with stock exchanges
The Company has complied with the requirements of regulatory authorities on capital
markets and no penalties have been imposed during the last three years. However, in the
matter of compliance with the requirement of minimum public shareholding under Rule 19
(2)(b) and 19(A) of Securities Contract (Regulation) Rules 1957, read with Clause 40(A) of
the erstwhile Listing Agreement and Regulation 38 of SEBI (Listing Obligations and
Disclosure Requirements) Regulation 2015, SEBI vide its final order dated 24th
July 2014 confirmed its interim order dated 04th June 2013, vide which i) the
voting right in respect of shares held by the persons in the promoters/ promoter group of
the Company was frozen and restricted to 1/3 of the entitlement, i.e. to the extent of
31.38 % ii) the buying and selling or otherwise dealing in securities of the Company held
by the promoters was prohibited and iii) the promoters and directors of the Company were
restrained from holding any new position as a director in any listed company.
The Appeal filed by the Company before Securities Appellate Tribunal, on the strength
of the Order dated 07th August 2014 (as reinforced vide the subsequent Order
dated 21-09-2015) passed by the Honble High Court of Karnataka, was disposed off by SAT
vide its Order dated 07-07-2016, with a direction to SEBI to consider a fresh
representation to be filed by the Company in the matter. Pursuant to the said Order, the
Company filed a detailed representation before SEBI on 27- 07-2016 and a personal hearing
was held in the matter on 08-11-2016, before the Whole-time Member. A written submission,
summing up our pleadings in the hearing has also been filed subsequently. Thereafter, the
Whole-time Member has passed an Order on 08-05-2017 disposing off the Companys
representation by confirming final Order of SEBI dt: 24-07-2014. The Companys management
has decided to file a fresh appeal before SAT challenging the said Order dated 08-05- 2017
of SEBI.
Internal Control Systems:
The Company has an adequate system of internal financial controls and procedures
commensurate with the size and nature of business. These procedures are designed to ensure
that all the assets are safeguarded, protected against loss and all transactions
authorized, recorded and reported correctly. The internal control systems of the Company
are monitored, reviewed and evaluated periodically by the members of the Audit Committee.
Deposits:
The Company did not accept any deposits from the public during the year. Further, there
were no outstanding deposits pending repayment.
Directors :
Changes in Directors:
The Board records its profound grief and sorrow, the sad and untimely demise of
Mr.K.LSrihari, Vice-Chairman and Managing Director of the Company, on 31-10-2016, after a
period of illness.
Mr.Srihari as a dynamic and versatile businessman with philanthropic disposition who
not only provided inspiring leadership for Khoday India Limited but was also the pivot of
the diversified businesses of 51 other Companies, 17 Partnership Firms and 2 Family Trusts
in the Khoday Group. Mr.Srihari was solely entrusted with the responsibility of treasury
management for Khoday India Ltd, other Companies, Firms and Trusts in the Khoday Group of
businesses.
The Board places on record its sincere and deep appreciation of the invaluable
contributions made by Mr.Srihari as Vice-chairman & Managing Director of Khoday India
Limited.
Re-appointment of directors retiring bv rotation:
In accordance with Article 37(A) of the Articles of Association of the Company
Mr.K.L.Ramachandra and Mr.K.S.Giridhar the Non-Executive Directors retire by rotation and
being eligible have offered to be re-appointed at the ensuing Annual General Meeting.
The particulars of the above Directors proposed to be re-appointed are given in the
separate section relating to report on Corporate Governance.
Appointment of Company Secretary as also the Chief Financial Officer:
Pursuant to Section 203 of the Companies Act, 2013, read with Companies (Appointment
and Remuneration of Managerial Personnel) Rules 2014, which mandates the appointment of
Chief Financial Officer for a Listed Company, Mr.R.Venkat subramanyan, Company Secretary
has been appointed as Companys Chief Financial Officer w.e.f. 07-06-2017 and consequently
re-designated as Company Secretary and Chief Financial Officer on the existing terms and
conditions of appointment including remuneration for the time being.
Form No. AOC-2
(Pursuant to clause (h) of subsection (3)of section 134 of the Act and Rule 8(2)
of the Companies (Accounts) Rules, 2014)
Form AOC - 2, giving details of transactions with related parties, is attached to this
report.
Whistler Blower Mechanism :
The Company has a Whistler Blower Policy in place for vigil mechanism., as mandated by
Regulation 4(2)(d)(iv) of SEBI (LO&DR) Regulations 2015.
Statutory Auditors :
It is proposed to appoint Mr.G.S.Ravikumar, Chartered Accountant as Statutory Auditors
of the Company for a term of 5 consecutive years, in place of the erstwhile Statutory
Auditors, M/s Rangaraju and Associates, whose appointment ceases at the ensuing Annual
General Meeting, upon completion of their maximum tenure as prescribed under Section 139
(2) of the Companies Act, 2013. Mr.G.S.Ravikimar, has furnished the certificate of
eligibility for his appointment as required under Section 141 of the Act.
Secretarial Auditor
The provisions of Section 204 read with Section 134(3) of the Companies Act, 2013,
mandates Secretarial Audit to be conducted from the financial year commencing on or after
1st April 2016 by a Company Secretary in Practice. The Board at its meeting
held on 13-02-2017 has therefore appointed Mr.G.Nagaraju ( Certificate of Practice No.
4025) as the Secretarial Auditor for the financial year ended 31st March 2017.
The Secretarial Auditors Report for the financial year ended 31st March 2017
is annexed to this Boards Report.
Transfer to Investor Education & Protection Fund
The Company does not carry any amount representing unpaid and unclaimed dividend,
unpaid interest on debentures, unpaid deposits etc., of the nature specified under Section
125 of the Companies Act, 2013.
Share Capital
As stated in the foregoing paragraphs, the Honble High Court of Karnataka at Bangalore
vide its Order dated 07-08-2014, confirmed the special resolution passed by the members at
the Annual General Meeting held on 30th December 2013 for reduction of paid-up
equity share capital by canceling 39,31.042 shares held by the public, under Section 100
read with Sections 101 to 105 of the Companies Act, 1956. Upon registration of the said
Order by the Registrar of Companies in Karnataka, Bangalore, vide Certificate dated 12th
September 2014, the paid-up equity share capital of the Company stands reduced from
Rs.37,59,12,370/- to Rs.33,66,01,950/-, divided into 3,36,60,195 equity shares of
Rs.l0/-each . The entire paid-up share capital of the Company is presently held by its
promoters and persons belonging to the promoter group.
Details of Managerial Remuneration pursuant to Companies (Appointment and Remuneration
of Managerial Personnel) Rules 2014:-
During the financial year, the Company did not pay any remuneration to any of its
executive , non-executive and independent directors, excepting sitting fee paid to
independent directors for attending meetings of the Board and the Committees thereof. The
details of sitting fee paid are given in Corporate Governance Report annexed hereto.
There were 385 permanent employees on the rolls of the Company as at 31st
March 2017.
No employee of the Company was in receipt of a remuneration exceeding Rs.5 lakhs per
month or Rs.60 Lakhs per annum during the financial year.
During the financial year, no increase was effected in the salary of Chief Operations
Officer, Company Secretary or any Manager of the Company.
It is affirmed that the remuneration paid to the employees at all levels is as per the
remuneration policy of the company.
Particulars of loans, guarantees or investments:
During the financial year the Company has not given any loan or extended any guarantee
to any person. So also no fresh investment of the nature specified in Section 186 of the
Companies Act, 2013, was made by the Company.
Conservation of energy, technology absorption, foreign exchange earnings and outgo, if
any:
The information with respect to Conservation of Energy, Technology Absorption, Foreign
Exchange earnings and outgo is furnished at Annexure A.
Industrial Relations:
Industrial Relations were cordial throughout the year under review. Your Directors
appreciate the dedicated services and co-operation of employees at all levels.
Corporate Governance:
A separate section on Corporate Governance is included as Annexure "B" to the
Directors Report. The Company has complied with the requirements of Corporate Governance
as stipulated in Regulation 27 of the SEBI (L08tDR) Regulations 2015. The Certificate
obtained from the Companys Auditors on compliance with Corporate Governance requirements
is annexed thereto.
Directors Responsibility Statement:
Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013,
(the Act) your Directors state that:-
i. in the preparation of the annual accounts, the applicable accounting standards have
been followed and that there were no material departures;
ii. the accounting policies selected by them were applied consistently, judgments and
estimates that are reasonable and prudent have been made so as to give a true and fair
view of the state of affairs of the Company as at 31st March 2017 and of the
loss incurred by the Company for the period ended the said date;
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. the annual accounts have been prepared on a going concern basis.
v. the Directors had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively.
vi. the Directors devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
Acknowledgements:
Your Directors, thank the customers, vendors, bankers, financial institutions,
Central and State Governments for their continued support and co-operation extended to
the Company.
For and on behalf of the Board of Directors For Khoday India Limited
| Date: G7m June 2017 |
K.L.Ramachandra |
| Place: Bangalore |
Chairman |
+91-9892691696
