Monte Carlo Fashions Ltd Directors Report.
To The Members,
Your Directors are pleased to present the Eleventh (11th) Annual Report of the Company along with the Audited Financial Results for the year ended March 31,2019.
1. FINANCIAL RESULTS
The Companys financial performance for the year under ended March 31,2019 is summarized below:
(Rs. In Lakhs)
|Particulars||Current Year 2018-2019||Previous Year 2017-2018|
|Revenue from operations||65,637.47||57,637.26|
|Total Revenue from operations & other income||67,460.32||59,415.83|
|Earnings before Interest, Depreciation & Tax (EBIDTA)||11,657.49||13,093.14|
|Depreciation & Amortization||1,910.01||2,096.28|
|Profit before Tax (PBT)||8,852.87||10,225.24|
|Tax Expenses/ Adjustment|
|1. Current Tax||2,272.37||3,075.54|
|2. Deferred Tax||620.89||358.23|
|Profit after Tax (PAT)||5,959.61||6,791.47|
|Other Comprehensive Income (net of tax)||(40.61)||(52.08)|
|Total Comprehensive Income||5,919.00||6,739.39|
|Earnings Per Share (Rs. ) - Basic||27.46||31.25|
|Earnings Per Share (Rs. ) - Diluted||26.85||31.25|
1. The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended and presentation requirements of Division II of schedule III of the Companies Act, 2013 (Ind AS compliant schedule III) as applicable to financial statement.
2. Effective from 1 April 2018, the Company has adopted Ind AS 115 using retrospective approach by adjusting the opening balance of equity for the earliest prior period presented and the other comparative amounts disclosed in financial results for each prior period presented, to the extent possible. To reflect the change in accounting policy in accordance with Ind AS 115, the Company has recognised a refund liability amounting to Rs. 1,232.43 lakhs as at 31 March 2018 and Rs. 1,790.46 lakhs as at 1 April 2017 with the corresponding adjustment in revenue from operations. Further, the Company has recognised right to receive returned goods amounting to Rs. 942.76 lakhs as at 31 March 2018 and Rs. 1,489.84 as at 1 April 2017 with the corresponding adjustment to changes in inventories of finished goods, work-in-progress and traded goods.
3. During the year, the Company has changed the accounting policy for determining cost of the manufactured finished goods from Retail method to Actual Cost method. In accordance with Ind AS 8, the Company has applied the change in accounting policy retrospectively by adjusting the opening balance of equity for the earliest prior period presented and the other comparative amounts disclosed in financial statements for each prior period presented, to the extent possible.
2. PERFORMANCE REVIEW
PRODUCTION AND SALES REVIEW
During the year under review, your company has registered robust revenue growth of around 14% backed by improved traction across all business segments. The revenue from operations has increased to Rs. 65,637.47 Lakhs from Rs. 57,637.26 Lakhs achieved last year. The production of the Company increased from 2,467,312 pcs to 3,223,038 pcs during the year 2018-19 showing an increase of 30.62%.
The Companys earnings before depreciation, interest and tax for the current year is Rs. 11,657.49 Lakhs as against Rs. 13,093.14 Lakhs achieved last year. After providing for deprecation of Rs. 1910.01 Lakhs (previous year 2096.28), finance cost of Rs. 894.61 Lakhs (previous year Rs. 771.62 Lakhs), provision for current tax of Rs. 2272.37 Lakhs (previous year Rs. 3075.54 Lakhs), provision for deferred tax Rs. 620.89 Lakhs (previous year Rs. 358.23 Lakhs), the Net Profit from the operations worked out to Rs. 5,959.61 Lakhs as compared to Rs. 6,791.47 Lakhs achieved last year. The major reasons for decrease in Net profit of the company is due to increase in advertisement costs and unspent amount of CSR for the previous years 2016-17, 2017-18 and current year 2018-19 has been paid during the year. The other income of the Company for the said Financial Year stood at Rs. 1,822.85 Lakhs.
A) Fixed assets
The Net Block as at 31st March, 2019 was Rs. 14,949.65 Lakhs as compared to 15,619.89 Lakhs in the previous year.
B) Current assets
The current assets as on 31st March, 2019 were Rs. 56,928.82 Lakhs as against Rs. 50,353.58 Lakhs in the previous year.
FINANCIAL CONDITION & LIQUDITY
The Company enjoys a rating of "(ICRA) AA- (pronounced double A minus)" from ICRA Limited (ICRA) for long term borrowings and "(ICRA) A1+ (pronounced ICRA A one plus)"for short term borrowings. Management believes that the Companys liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements.
The position of liquidity and capital resources of the company is given below:-
(Rs. in Lakhs)
|Cash and Cash Equivalents|
|Beginning of the year||152.23||69.49|
|End of the year||3,265.54||152.23|
|Net Cash provided (used) by:-|
3. BUSINESS OUTLOOK
Brand "Monte Carlo", as you are aware has diversified its presence across segments such as Woolens, Cotton, Home furnishings and Kids. To enhance the brand visibility to a wider market, focus is increased in southern and eastern regions by increasing the share of "All Season" Cotton product categories growth in revenues. The company continues to aggressively invest in brand building and marketing initiatives and continue to enjoy strong customer response. We continue with our endeavour to build a leading branded apparel company which can fulfil all the requirements of an individuals wardrobe and have successfully positioned as a lifestyle brand with a well-diversified product offering. Now, the focus is on Retail network expansion, for which the company has started selling products through shop in shop (SIS) Model and is focusing on Online sales through own portal as well as Tie-ups with e-commerce portals such as Flipkart, Jabong, Myntra, Amazon and Kapsons.
The Company has comprehensive range of cotton and cotton-blended products which cater to all seasons in-order to expand our all-season product range and strengthen our pan-India operations and expect these initiatives bring meaningful contribution to our overall revenue in the coming years.
Your company is strongly focused on optimizing asset utilization, quality, efficiency and relationships and have strong distribution network across India through 262 EBOs, 2,500+ MBOs & distributors and 300+ national chain stores. Majority of net revenues comes from MBOs and franchise EBOs where primarily sales is done on preorders and on outright basis. This helps the company to remain insulated against any inventory and credit risk. The company has sufficient capacity to grow the business over near term and do not foresee any major capex for the next two years.
4. SHARE CAPITAL
The Authorized Share Capital of your Company as at 31st March, 2019 stands at Rs. 250,000,000 divided into 25,000,000 Equity Shares of Rs. 10/- each. During the year, the Company bought-back 1,000,000 Equity Shares of Rs. 10/- each through the tender offer route from its existing shareholders. As at 31st March, 2019, the Issued, Subscribed and Paid- up Equity Share Capital of the Company stood at Rs. 2,073.21 Lakhs divided into 20,732,064 Equity Shares of Rs. 10/- each (Restated after taking the effect of extinguishment of 1,000,000 equity shares pursuant to buy back).
There was neither any issue of Equity shares with differential rights as to dividend, voting or otherwise nor grant of any stock options or sweat equity under any scheme during the year under review.
5. BUYBACK OF EQUITY SHARES
During the year, for the purpose of Buy-back of Equity shares, the following Special Resolution(s) were passed by way of a Postal Ballot:-
1. Buy-Back of 1,000,000 fully paid up Equity Shares of face value of Rs. 10/- each at a maximum price of Rs. 550/- (Rupees Five Hundred Fifty only) per share for an aggregate maximum amount of upto Rs. 550,000,000 (Rupees Fifty Five Crores only)
2. Transfer of Rs. 24,222.55 Lakhs from Special Reserve to General Reserve in terms of provisions of the Section 2(43) of the Companies Act, 2013.
Accordingly, the Company issued a public announcement dated 8 February 2019 for buy-back of 1,000,000 Equity Shares of face value of Rs. 10 each from its existing shareholders as on the record date of 22 February 2019 on a proportionate basis through "Tender Offer" route in accordance with the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018 and the Companies Act, 2013 at a price of Rs. 550 per equity share, aggregating to Rs. 5,500 lakh. The tendering period for buy-back offer remained open from 19 March 2019 to 2 April 2019 and the settlement in respect of shares bought back was completed on 10 April 2019. Extinguishment of the shares bought back has been completed on 11 April 2019. Consequent to the said buy-back and in accordance with the Ind AS 10 and 32, Rs. 100 lakhs has been reclassified from equity and Rs. 5,400 lakhs has been reclassified from other equity to other current financial liabilities.
Therefore, As at 31st March, 2019, the Issued, Subscribed and Paid-up Equity Share Capital of the Company stood at Rs. 2,073.21 Lakhs divided into 20,732,064 Equity Shares of Rs. 10/- each.
6. DIVIDEND ON EQUITY SHARES
The company has earned a net profit of Rs. 5,959.61 lakhs for the year 2018-19. With a view to plough back profits having regard to the future requirement of funds, your Directors do not propose any dividend for the year ended 31st March, 2019.
7. TRANSFER TO RESERVES
The General Reserve of the Company stood at Rs. 38,134.09 Lakhs as at 31.03.2019. Your Company has transferred a sum of Rs. 1000 Lakhs to the General Reserve out of the profits of the Company.
8. SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES
Your Company does not have any Subsidiary, Joint Ventures or Associate Company
9. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT:-
There are no material changes or commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company i.e. 31st March, 2019 and the date of this report.
10. REPORTING OF FRAUDS:
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.
11. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNELS
The Board of Directors presently consists of 12 (Twelve) Directors including a Chairman & Managing Director, 4 (Four) Executive Directors, 1 (One) Non Executive Non Independent Director and 6 (Six) Independent Directors.
In terms of the provision of Section 149 of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), your Company have 3 (Three) Women Directors on the Board namely Smt. Ruchika Oswal (DIN:00565979), Smt. Monica Oswal (DIN:00566052) and Dr. Manisha Gupta (DIN:06910242).
The Board consists of a balanced profile having specialization in different fields that enable them to address various business needs of the Company, while placing very strong emphasis on corporate governance.
The Board in its meeting held on 25.05.2018 had appointed Sh. Rishabh Oswal (DIN: 03610853) as an Additional Director and designated him as an Executive Director for a period of 5 years w.e.f. 01.06.2018, which was subsequently approved by the Members at the 10th Annual General Meeting of the Company. Also, Board had taken note of Sh. Paurush Roy (DIN: 03038347), Non-Executive Director Non Independent Director of the Company, being an Independent Director of the Company for a term of 3 consecutive years w.e.f. 25.05.2018.
Re-appointment of Independent Directors
Based on recommendation of Nomination and Remuneration Committee, the Board has proposed for re-appointment of Independent Directors for a second term, as detailed below:
|Name of Director||Director Identification Number (DIN) of Director||Proposed Second Term|
|Dr. Suresh Kumar Singla||00403423||5 (five) consecutive years with effect from 27.06.2019 to 26.06.2024|
|Dr. Manisha Gupta||06910242||5 (five) consecutive years with effect from 27.06.2019 to 26.06.2024|
|Sh. Alok Kumar Misra||00163959||5 (five) consecutive years with effect from 09.08.2019 to 08.08.2024|
|Dr. Amrik Singh Sohi||03575022||3 (five) consecutive years with effect from 01.02.2019 to 31.01.2022|
|Sh. Ajit Singh Chatha||02289613||3 (five) consecutive years with effect from 01.04.2019 to 31.03.2022|
The Company has received the following documents from them:
i. Consent in writing to act as Director in Form DIR- 2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014;
ii. intimation in Form DIR-8 pursuant to terms of the Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that they are not disqualified as per Section 164(2) of the Companies Act, 2013; and
iii. a declaration to the effect that they meet the criteria of independence as provided under Section 149 of the Companies Act, 2013
Pursuant to Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended vide SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, no listed Company shall appoint a person or continue the directorship of any person as a Non-Executive Director who has attained the age of seventy five years unless a Special Resolution is passed to that effect. Re-appointment of Sh. Ajit Singh Chatha (DIN: 02289613) aged about 83 years is proposed by Board in its meeting held on Feburary 8, 2019 as Independent Director for 3 (Three) consecutive years with effect from 01.04.2019 to 31.03.2022. Therefore the approval of his re-appointment is being sought by a Special Resolution
In compliance with Regulation 36(3) of Listing Regulations and Secretarial Standards, brief resumes of all the Directors proposed to be appointed / re-appointed are attached along with the Notice calling the ensuing Annual General Meeting.
Statement of declaration from Independent Directors
All the Independent Directors of the Company have given their respective declarations that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations
Retirement by Rotation
In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Sh. Sandeep Jain (DIN: 00565760), Executive Director and Sh. Dinesh Gogna (DIN: 00498670), Director of the Compay, being longest in the office since their last appointments/ re-appointments, shall retire at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment, on the same terms and conditions on which they were appointed/ re-appointed.
In compliance with Regulation 36(3) of Listing Regulations and Secretarial Standards brief resumes of all the Directors proposed to be appointed / re-appointed are attached along with the Notice calling the ensuing Annual General Meeting.
Key Managerial Personnel (KMPs)
The following persons are the Key Managerial Personnel (KMPs) of the Company as on March 31, 2019 in terms of provisions of Section 203 of the Companies Act, 2013 and rules made there under:
|Names of KMPs||Designation|
|Sh. Jawahar Lal Oswal||Chairman & Managing Director|
|Sh. Sandeep Jain||Executive Director|
|Smt. Ruchika Oswal||Executive Director|
|Smt. Monica Oswal||Executive Director|
|Sh. Rishabh Oswal||Executive Director|
|Sh. Raj Kapoor Sharma1||Chief Financial Officer|
|Sh. Sahil Jain2||Company Secretary|
1. Sh. Raj Kapoor Sharma was appointed as Chief Financial Officer with effect from 30h November, 2018.
2. Sh. Sahil Jain has resigned from the post of Company Secretary with effect from 04th April, 2019 and in his place, Mr. Ankur Gauba is appointed by the Board of Directors as Company Secretary with effect from 20h May, 2019.
12. NUMBER OF BOARD MEETINGS HELD
The Board meets at regular intervals to discuss and decide on policy and strategy apart from other business discussions. However, in case of a special and urgent business need, the Boards approval is taken by passing resolution(s) through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting.
During the Financial Year 2018-2019, the Board met on 5 (Five) occasions viz. May 25, 2018; July 30, 2018; November 13, 2018; November 30, 2018 and February 08, 2019. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
13. COMMITTEES OF THE BOARD
The Company has constituted the following committees in compliance with the Companies Act, 2013 and the Listing Regulations.
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee and
4. Corporate Social Responsibility Committee.
During the Financial Year 2018-19, there was change in composition of the Board by virtue of resignation of Dr. Yash Paul Sachdeva (DIN: 02012337) and take note of Sh. Paurush Roy (DIN: 03038347) being an Independent Director. Accordingly, after detailed discussion about the requirements laid down under Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board of Directors in its meeting held on 25.05.2018, reconstituted all the relevant Committees such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.
Apart from the aforesaid Committees of the Board, the Company has also constituted Share Transfer Committee. All these Committees have been established as a part of the best corporate governance practices. There have been no instances where the Board has not accepted any recommendation of the aforesaid Committees. The details in respect to the Compositions, Powers, Roles, and Terms of Reference etc. are provided in the Corporate Governance Report forming part of this Report.
14. ANNUAL BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, that of its committees and individual directors. Further, the Independent Directors of the Company met once during the year on February 08, 2019 to review the performance of the Non-executive Directors, Chairman of the Company and performance of the Board as a whole. Composition of Board / Committees, Quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.
15. NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy adopted by the Company lays down a framework in relation to selection, appointment/ reappointment of Directors, Key Managerial Personnel and Senior Management alongwith their remuneration. It also lays down criteria for determining qualifications, positive attributes, independence of director(s) and other matters provided under sub section (3) of section 178 of the Companies Act, 2013.
The said Policy is available on Companys website and the web link for the same is http://www.montecarlocorporate.com/ pdf/NOMINATION AND REMUNERATION POLICY.pdf
16. PUBLIC DEPOSIT
During the year under review, your Company has not accepted any deposits as envisaged under Section 73 of the Companies Act, 2013 and rules made there under.
17. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an adequate system of internal financial control commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, work performed by the Internal Auditors, Statutory Auditors and Secretarial Auditors and External Consultants, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the management and the Audit Committee, the Board is of the opinion that Internal Financial Controls of the Company were adequate and effective during the year under review.
18. BUSINESS RISK MANAGEMENT
Pursuant to Section 134(3)(n) of the Companies Act, 2013, your management at regular intervals evaluates various risks faced by the Company which could affect its business operations or threaten its existence. Major risks identified by the businesses and functions from time to time are systematically addressed through mitigating actions on a continuing basis.
19. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Board has constituted a CSR Committee under Section 135 of the Companies Act, 2013. As per the adopted CSR policy, the Company is committed to certain CSR initiatives in the fields of Medical Relief and Research, Environmental Sustainability, Education and Social Upliftment etc., in collaboration with its Group Companies through the Implementing Agency i.e Oswal Foundation. The said policy is available at http://www.montecarlocorporate.com/pdf/Corporate-Social- Responsibilitv-Policv.pdf.
The Company carries on its CSR activities through Oswal Foundation along with the other group companies. The Company discharges its CSR liability by either contributing the amount to the said foundation or making a provision by way of CSR reserve.
The Company was required to spend Rs. 162.71 Lakhs on account of its liability towards Corporate Social Responsibility (CSR) for the Financial year 2018-19. Also, the Company has contributed an amount of Rs. 5.00 lakhs as donation to Christian Medical College and Hospital and Rs. 3.00 lakhs to Society for Promotion of ethical and affordable healthcare.
During the year, Company has contributed a sum of Rs. 457.63 lakhs (Rs. 146.72 lakhs- unspent CSR amount for the financial year 2016-17, Rs. 156.20 Lakhs- unspent CSR amount for the financial year 2017-18 and Rs. 154.71 Lakhs - being the prescribed CSR expenditure for the financial Year 2018-19) to Oswal Foundation for the purposes of CSR including promotion of charitable hospital being run by Mohan Dai Oswal Cancer Treatment & Research Foundation.
Thus, the Company has fulfilled its CSR obligations for the unspent CSR amount for the financial Year 2016-17, 201718 and 2018-19 and complied with the provisions of section 135 of the Companies Act, 2013.
The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 including a brief outline of the Companys CSR Policy is set out as Annexure-A forming part of this Report.
20. RELATED PARTY TRANSACTIONS
All the transactions entered into by the Company with its related parties, during the year under review were in the "ordinary course of the business" and on "an arms length basis", none of which was "material" in accordance with the Companys Related Party Transactions Policy. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is enclosed as Annexure-B. Further 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.
Prior approval of the Audit Committee was also obtained for all the transactions entered into during the year 2018-19 by the Company with its Group Companies. The details of all the related party transactions were placed before the Audit Committee and Board for its consideration and ratification on quarterly basis.
The details of the transactions entered with Related Parties during the year are provided in the Companys Financial Statements at Note No. 39 of the Notes to Accounts in accordance with the relevant Accounting Standard.
Your Company has framed a Policy on Related Party Transactions for purpose of identification and monitoring of such transactions in line with the requirements of the Companies Act, 2013 and Listing Regulations and the said policy is available at http://www.montecarlocorporate.com/pdf/RELATED-PARTY-TRANSACTION-POLICY.pdf.
21. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS
The Company has not given any loan, guarantee or made any investment covered under the provisions of Section 186 of the Companies Act, 2013. However, the detail of investments made by the Company is given in the notes to the Financial Statement.
22. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of Companies Act, 2013 substituted by Companies (Amendment) Act, 2017 w.e.f. July 31, 2018, the Annual Return is put up on the Companys website and can be accessed at http:// www.montecarlocorporate.com/annual returns.php
23. INTERNAL CONTROL SYSTEM & ITS ADEQUACY
Your Company has developed a well defined Internal Control System commensurate with the size, scale and complexity
of its operations. The internal audit function is entrusted to M/s Gupta Vigg & Co., Chartered Accountants, who were appointed as Internal Auditors by the Board in terms of Section 138 of the Companies Act, 2013 and rules made there under. The Internal Auditors monitors and evaluates adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Significant audit observations are addressed to the Audit Committee and the Committee thereafter reviews the adequacy and effectiveness of the internal control systems and suggests various measures to improve and strengthen the same.
24. CORPORATE GOVERNANCE
The Company is committed to follow the best Corporate Governance practices, including the requirements under the SEBI Listing Regulations and the Board is responsible to ensure the same, from time to time. The Company has duly complied with the Corporate Governance requirements. Further a separate section on Corporate Governance in compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V of the said regulations alongwith a Certificate from a Practicing Company Secretary confirming that the Company is and has been compliant with the conditions stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Annual Report.
Statutory Auditors & Auditors Report
M/s Walker Chandiok & Co. LLP (Firm Registration No: 001067N / N500013), Chartered Accountants, were appointed as Statutory Auditors of the Company in the 7th Annual General Meeting to hold office up to the conclusion of the 12th Annual General Meeting, subject to ratification by shareholders each year. Accordingly, the Board of Directors based on the recommendation of the Audit Committee have proposed the ratification of appointment of M/s Walker Chandiok & Co. LLP, as the Statutory Auditors by the shareholders of the Company to hold the office from the conclusion of the forthcoming Annual General Meeting till the conclusion of 12th Annual General Meeting of the Company.
As per Section 40 of the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditor is not required to be ratified at every AGM, still the Board of Directors, have proposed the ratification of appointment of M/s Walker Chandiok & Co. LLP, as the Statutory Auditors to hold the office from the conclusion of the forthcoming Annual General Meeting till the conclusion of 12th Annual General Meeting of the Company, in true sense of the resolution passed by the shareholders in their 7th AGM, as recommended by the Audit Committee.
The Company has obtained from Auditors a written consent and a certificate as required under the Section 139 of the Companies Act, 2013 to the effect that their reappointment, if made, would be within the limits and in accordance with the criteria specified under Section 141 of the Companies Act, 2013.
The Auditors Report on the Annual Accounts of the Company for the year under review is self explanatory and requires no comments. Further, there are no adverse remarks or qualification in the report that calls for Boards explanation. During the year under review, there were no frauds reported by Auditors under Section 143(12) of Companies Act, 2013.
M/s PS. Dua & Associates, Company Secretary in whole time practice, were appointed as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2018-19, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review reported except that the Board of Directors has appointed Mr. Raj Kapoor Sharma as Chief Financial Officer (KMP) on 30th November 2018 in their meeting, to fill the vacancy caused by the resignation of Mr. Raman Kumar on 13th November, 2017.
The Board comments that, inadvertent delay is because the Company was in search of the Right Candidate who can efficiently handle the affairs of the Company. Thereafter, the Company re-designated, Sh. Raj Kapoor Sharma, VicePresident- Accounts as Chief Financial Officer (KMP) on 30th November 2018. The Secretarial Audit Report is annexed as Annexure-C to this report.
In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit.
26. LISTING OF EQUITY SHARES
The Equity Shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the listing fees for the Financial Year 2018-2019 have been duly paid to both the Stock Exchanges.
27. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has formulated a Vigil Mechanism/ Whistle blower Policy to encourage employees to report matters about unethical behaviour, actual or suspected fraud or violation of Companys code of conduct without the risk of subsequent victimisation and discrimination. The details of the same are explained in the Corporate Governance Report and the said policy is also posted on the website of the Company i.e. www.montecarlocorporate.com.
28. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has adopted a policy against sexual harassment and constituted an Internal Compliant Committee in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the Financial Year 2018-19 the Company has not received any complaints on the same and hence, no complaint was pending as at 31st March, 2019.
29. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations, is presented separately and forms part of this Annual Report.
30. DISCLOSURE OF REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure-D and forms part of this report.
31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-E.
32. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the year under review, your Company has duly complied with the applicable provisions of the Secretarial Standards.
33. HUMAN RESOURCE & INDUSTRIAL RELATIONS
During the year under review, your Company enjoyed cordial relationship with the workers and employees at all levels of the organisation. A detailed section on Human Resources/Industrial Relations is provided in the Management Discussion and Analysis Report, which forms part of this Annual Rep
34. DIRECTORS RESPONSIBILITY STATEMENT
In compliance of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:
a) In the preparation of the annual accounts for the year ended March 31,2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates 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;
c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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;
e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
35. GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:-
1. Significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.
2. Transfer of unclaimed / unpaid dividend to Investor Education and Protection Fund.
3. Change in nature of Business of Company
36. ACKNOWLEDGEMENT & APPRECIATION
Your Board is grateful to express its deep sense of gratitude and appreciation to all the Shareholders, Customers, Vendors, Bankers, Financial Institutions and Business Associates of the Company for their continued support during the relevant financial year. Your Board acknowledges support and cooperation received from all the regulatory authorities of the Central Government and State Government respectively.
It also express its sincere appreciation of the employees at all levels for being encouraged to meet several challenges encountered and look forward to their valuable support and commitment in the times ahead.
|For and on behalf of Board of Directors|
|Jawahar Lal Oswal|
|Place: Ludhiana||Chairman & Managing Director|
|Date : 05.08.2019||(DIN: 00463866)|