navkar corporation ltd share price Directors report


<dhhead>Directors Report</dhhead>

Dear Shareholders,

The Board of Directors of Navkar Corporation Limited ("The Company" or "Navkar") is pleased to present their 15th (Fifteenth) Annual Report on the business and operations of the Company along with the Audited Financial Statements of the Company for the financial year ended March 31 st, 2023 ("financial year under review" or "financial year 2022-23").

 

1. FINANCIAL PERFORMANCE:

The Company’s financial st, 2023 compared to the previous financial year is performanceduringthe year ended summarized below:

Particulars

FY 2022-23

FY 2021-22

Total Revenue

44967.58

45595.76

Total Expenses

40051.49

41116.07

Profit Before Tax from continuing Operations Before exceptional items

4916.09

4479.69

Exceptional Item

1906.42

-

Tax Expenses
Current Tax

1859.12

783.51

Earlier Year Tax

38.08

20.22

Deferred Tax Expenses

(2374.21)

(100.47)

Total Tax Expenses

(477.01)

703.26

Profit for the period from Continuing Operations

7299.52

3776.43

Discontinued Operations
(a) Profit from discontinued operations before tax

4151.51

3782.00

(b) Tax expenses of discontinued operations

2201.92

835.00

Profit/(Loss) for the Period/Year fromiscontinuedoperation(a - b)

1949.59

2947.01

Profit/(Loss) for the Period/Year (A)

9249.11

6723.43

Other Comprehensive Income, net of tax (B)
Items that will not to be reclassified to Profit and Loss
Re-measurement of net defined benefit
From Continuing Operations

11.80

(8.75)

From Discontinued Operations

10.17

(8.62)

Total Comprehensive Income for the year (A+B)

9271.08

6706.07

Earning per equity shares (face value INR 10/- per share)
Basic and Diluted (INR)
From Continuing Operations

4.85

2.51

From Discontinued Operations

1.30

1.96

 

Financial Highlights

The total revenue of your Company from continuing operations stood at INR 44967.58 Lakhs for the financial year ended March 31, 2023 as against INR 45595.76 Lakhs for the previous financial year. The Profit before tax from operations is INR 10974.02 Lakhs for the current year as against INR 8261.69 Lakhs in previous financial year. After making provision for tax, the net profit of your Company is INR 9271.08 Lakhs as against INR 6706.07 Lakhs in the previous financial

Based on the approvals received from the Board of

Directors at their Meeting held on August 16, 2022 and from the shareholders at the 14th Annual General Meeting held on September 07, 2022, the company has executed Business Transfer Agreement during the year and has sold the business undertaking under the ICD operation situated at Tumb Village Gujarat as a going concern, on an "as is where is" basis, as mentioned under "Business Undertaking" of the Business Transfer Agreement to Adani Forwarding Agents Private limited.

.

Below are the comparative figures that have been restated to reflect the discontinued operations.

Particulars

March 31, 2023

March 31, 2022

Total Revenue from Operations

24,065.12

40,487.71

Total Expenses

19,913.61

36,705.71

Profit (+)/ Loss (-) before tax

4,151.51

3,782.00

Total Tax Expenses

2,201.92

835.00

Net Profit (+)/ Loss (-) for the year

1,949.59

2,947.01

 

Detailed analysis on sale of Business Undertaking have been provided under Note No. 38 of the Financial Statement.

 

Operational Highlights

The operations are exhaustively discussed in the

‘Management Discussion and Analysis’ forming part of the Annual Report .

 

Accounting Method

The above figures are extracted from the Annual Audited Financial Statements prepared in accordance with the Indian Accounting Standards ("Ind AS") as notified under Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI

Listing Regulations").

 

Changes in the nature of Business:

The Company continued to provide logistics services to its customers and hence, there was no change in the nature of business of the Company during the year under review.

 

Material Changes and Commitment, If Any, Affecting

Financial Position of the Company from financial year end and till the date of this report:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year to which the Financial Statements relate and the date of this Report.

 

2. ALTERATION OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION:

During the financial year under review, there is no alteration in the Memorandum and Articles of the Company.

 

3. TRANSFER OF UNCLAIMED SHARE APPLICATION MONEY TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the applicable provisions of the Section 125 Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the

IEPF Rules"), all unpaid or unclaimed Share Application Money / dividends are required to be transferred by the Company to the IEPF; established by the Government of India, after completion of seven years.

Accordingly, During the year under review an amount of Rs. 1,91,425/- (Rupees One Lakh Ninety-One Thousand Four Hundred Twenty Five Only) was transferred to IEPF

Fund.

 

4. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year underreview,nosignificantand material orders have been passed by any Regulator or Court or

Tribunal which would impact the going concern status of the Company and its future operations.

 

5. STATE OF COMPANY’S AFAIRS:

BUSINESS OVERVIEW AND STATE OF COMPANY’S AFFAIRS:

The Company operates into (a) Container Freight Stations or CFSs (b) Inland Container Depot or ICD and (c) Rail Terminals also referred to as Private Freight Terminals or PFTs by the Indian Railways.

 

Container Freight Stations

Container Freight Stations serve as gateway ports. In our case, our three Container Freight Stations serves the gateway port of Nhava Sheva (also called Jawaharlal Nehru Port Trust). Company has three Container Freight Stations two at Ajiwali and one at Somathane all in Panvel Taluka, Maharashtra, import containers nominated by container shipping lines or consignees are required to be evacuated from the port premises and transported to our Container Freight Station. After arrival at the CFS, the import laden container is stacked and stored awaiting clearance by the consignee’s clearing agent. The process of customs clearance of goods is carried out by the Customs Broker (earlier referred to as Custom House Agent). Similarly, CFS provides all the services for Export Cargoes. Our CFS provides all the services that are needed to facilitate the clearance of the cargoes (Exim and Domestic). To service the needs of customs clearance and delivery of the goods or the laden container itself, we are required to have an array of equipment (both big and small) that include Reach Stackers, Forklifts, Cranes, slings, trailers, and other cargo handling equipment. For storage purposes there are warehouses which are marked for the storage of export and import goods. Open areas are marked for stacking and storing import and export containers. As a

CFS we provide all the range of services that fall within the guidelines for handling cargoes and containers from the Container Yard (CY) of the port’s terminal to the CFS and handover of the goods or the laden container at the

CFS. Facilities for parking, container storing and repairs are available here.

 

Railway Terminals

Navkar operates two railway terminals referred to as Private Freight Terminals (PFTs). These terminals are at our Somathane (Panvel) facility and at ICD Morbi. The PFT at Somathane is served with three railway tracks.

The railway terminals are used for handling export rakes of agro products, domestic rakes and container rakes

(referred to as BLC rakes. The PFTs handle all types of railway rakes (Exim and domestic) at Somathane.

All rakes arriving with cargoes are handled as per the guidelines of the Indian railways.

 

Inland Container Depot New ICD at Morbi, Gujarat

The Board of Directors at their meeting held on dated July 23, 2021, considered and approved the setting up of Inland Container Depot and Private Freight Terminals near Mundra or Pipava or Northern Maharashtra ("Project") subject to receipt of requisite approvals and clearances. Further during the year under review the Company has received following approvals for setting up of Inland Container Depot and Private Freight Terminals:

1. Commissioner of Customs, Jamnagar vide their Notification No. 03/2022/CCP/JMR dated November 18, 2022 has granted approval of Inland Container Depot (ICD) of Navkar Corporation Limited situated at Survey No 247/P1, 247P1/P1, 247/P2, 251/ P1, 251/P2 and 254 of Village Vadharva, Taluka Maliya District Morbi for the purpose of unloading of imported goods and loading of export goods and also notified the area under Section 8(b) of the Customs Act, 1962.

2. Commissioner of Customs, Jamnagar vide their Notification No. 04/2022/CCP/JAMNAGAR dated November 18, 2022 have appointed Navkar Corporation Limited as Custodian as per Section 45 of Customs Act, 1962 for Inland Container Depot (ICD) situated at Survey No 247/P1, 247P1/P1, 247/ P2, 251/P1, 251/P2 and 254 of Village Vadharva, Taluka Maliya District Morbi and approved to act as a Customs Cargo Service Provider ("CCSP") as detailedinaforesaid JAMNAGAR.

3. Western Railway, vide Notification No. 101 (Goods) 2022 dated December 31, 2022 have given approval for commissioning of Gati-Shakti-Multi-Modal Cargo Terminal of Navkar Corporation Limited taking off from Wadharwa (NCLW) on Ahmedabad division.

 

Commencement of Operations: The Commissioner of Customs, Jamnagar vide their Notification No 01/2023/ CCP/JMR dated February 28, 2023 have granted Commencement of Operations approval to Inland Container Depot (ICD) of Navkar Corporation Limited situated at Survey No 247/P1, 247P1/P1, 247/P2, 251/ P1, 251/P2 and 254 of Village Vadharva, Taluka Maliya District Morbi with effect from March 01, 2023.

 

Transfer of undertaking by way of a slump sale on a going concern basis:

The Board of Directors at their meeting held on August 16, 2022 and shareholders at the Annual General Meeting held on September 07, 2022 approved the transfer of its title, rights, interest, ownership and the operations of its Business Undertaking situated at Survey Nos. - 44/1, 44/1/1 P, 44/1/2P and other, Tumb Village, Taluka Umbergaon, Dist. Valsad, Gujarat-

396150 as a going concern, on an "as is where is" basis ("Business Undertaking") for a lumpsum consideration of approximately INR 835,00,00,000 (Indian Rupees Eight Hundred and Thirty Five Crore Only) to Adani Forwarding Agents Private Limited ("Purchaser").

During the year under review the Company has received partial consideration amount of INR 785 Crores from Adani Forwarding Agent Private Limited, a subsidiary of Adani Logistics Limited and has also executed a Sale Deed for transfer of immovable property. With reference to balance consideration of INR 50 crore, we like to make a note that the same shall be paid by Adani Forwarding Agent Private Limited as per the terms mentioned in the

Business Transfer Agreement executed between the parties i.e. INR 25 Crores shall be paid within 1 (one) year from the closing date and the balance amount of INR 25 Crores shall be paid within a period of 2 (two) years from the closing date.

Out of the sum received as mentioned above, the

Company has made repayment of its Secured and Unsecured outstanding loan. (Refer Note 20, 23 of Financial Statements) The Commissioner of Customs, Ahmedabad has also issued withdrawal notice vide its Notification: Export 11 /2022-23 dated October 13, 2022 for removal of company’s name as Custodian of the Imported and Export goods for the Business Undertaking.

 

6. TRANSFER TO RESERVES:

Details of reserve and surplus are provided in Note No. 19 of the Financial Statement.

 

7. DIVIDEND:

The Board of Directors of your company, after considering holistically the relevant circumstances, and with a view to strengthen the financial position of the Company have decided that it would be prudent, not to recommend any dividend for the financial year ended March 31, 2023.

As per Regulation 43A of Listing Regulations the

Company has formulated Dividend Distribution Policy taking into account the parameters prescribed in the said

Regulations. The Dividend Distribution Policy is available on Company’s website at https://www.navkarcfs.com/b/ download/policies/Dividend-Distribution-Policy.pdf

 

8. PUBLIC DEPOSIT:

During the year under review, the Company has not accepted any deposits from the public falling within the meaning of the provisions of Chapter V Acceptance of Deposits under Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

 

9. INTERNAL FINANCIAL CONTROLS:

The Company has laid down Standard Operating Procedures, policies, roles, responsibilities and authorities to guide the operations of the business. Regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

Process owners are responsible for ensuring compliance with the policies and procedures laid down by the

Management. Robust and continuous internal monitoring mechanisms ensure timely identification of risks and issues. The Statutory and Internal Auditors undertake rigorous testing of the control environment of the Company. Independence of the Internal Auditor is ensured by way of direct reporting to the Audit Committee.

The Auditors of the Company has audited and assessed the Internal Financial Controls of the Company during the financial year under review taking into consideration the essential components of internal controls stated in the

Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India.

Based on the results of the assessments carried, no material weakness was observed in the effectiveness of internal control systems nor were any deficiencies in the design or operation of such internal controls observed.

Further there were no significant changes in internal control over financial reporting and the internal control systems were operating adequately.

The Statutory Auditors have also examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting for the financial year ended March 31, 2023. Further there were no letters of internal control weaknesses issued by the Internal Auditor or the Statutory Auditors during the financial year under review. The Company believes that strengthening of internal controls is an ongoing process and there will be continuous efforts to keep pace with changing business needs and environment.

The Audit Committee reviews the adequacy and effectiveness of the Company’s internal control environment and monitors the implementation of the audit recommendations including those relating to strengthening of the Company’s risk management policies and systems. The ultimate objective being, a Zero Surprise, risk-controlled organisation. Further details of the internal control systems are provided in the

Management Discussion & Analysis which forms part of this Integrated Annual Report.

 

10. RISK MANAGEMENT:

The Company has a comprehensive Risk Management framework that seeks to minimize adverse impact on business objectives and capitalize on opportunities.

The Company has implemented a mechanism for risk management and formulated a Risk Management Policy.

The said policy provides for creation of a risk register, identification of risks and formulating mitigation plans. Major risks identified by the business and functions are systematically addressed through mitigation actions on a continuing basis. The risk register is refreshed periodically to ensure that the risks remain relevant at all times and corresponding mitigation measures are timely and effective so that the risk profile is within identified tolerance levels.

The Company has set up a Risk Management Committee which is chaired by Mrs. Pooja H. Goyal, Non- Executive Independent Director, to monitor the risks and their mitigation actions as well as formulating strategies towards identifying new and emergent risks. Further, the Board is apprised of any actual / emergent risk that may threaten the long-term plans of the Company. The major risks forming a part of the Enterprise Risk Management process are linked to the audit universe and are also covered as part of the annual risk based audit plan.

The details of composition of the Risk Management Committee, their terms of reference, meetings held and attendance of the Committee Members thereat during the financial year 2022-23 are provided in the section titled Report on Corporate Governance, which forms part of this Annual Report.

 

11. INTERNAL CONTROL SYSTEM & THEIR ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ‘Internal control systems and their adequacy’ section in the Management Discussion and

Analysis Report, which forms part of this Annual Report.

 

12. SHARE CAPITAL:

During the year under review, there is no change in the Authorised, Issued, Subscribed and Paid-up Share Capital of the Company.

As on March 31, 2023, the Authorised share capital of the Company is INR. 2,26,00,00,000/- (Rupees Two Hundred Twenty-Six Crore) divided into 21,50,00,000 (Twenty-One Crore Fifty Lakhs) Equity Shares of INR. 10/- (Rupees Ten only) each, 50,00,000 (Fifty Lakhs) 0% Cumulative Redeemable Preference Shares of INR. 10/- each (Rupees Ten only) and 6,00,000 (Six Lakhs) 6% Cumulative Redeemable Preference Shares of INR. 100/- (Rupees One Hundred only) each.

As on March 31, 2023, the issued, subscribed and paid-up share capital of the Company is INR 153,81,70,810 /- (Rupees One Hundred Fifty Three Crore Eighty One Lakh Seventy Thousand Eight Hundred Ten Only) divided into 15,05,19,181 (Fifteen Crore Five Lakhs Nineteen Thousand One Hundred Eighty One) Equity Shares of INR. 10/- (Rupees Ten only) each, 23,00,000 (Twenty Three Lakh) 0% cumulative Redeemable Preference Shares of INR. 10/- (Rupees Ten only) each and 99,790 (Ninety-Nine Thousand Seven Hundred Ninety) 6% Cumulative Redeemable Preference Shares of INR. 100/- (Rupees One Hundred).

 

13. CREDIT RATING:

The Company has received following credit rating from CRISIL Rating Limited on April 13, 2022, which denotes high degree of safety regarding timely servicing of financial obligation.

Total Bank Loan

Rs. 600 Crore

Facilities Rated

(Enhanced from Rs. 50 Crore)

Long Term Rating

CRISIL A/Positive (Reaffirmed)

Short Term Rating

CRISIL A1 (Assigned)

 

14. LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under review, the Company have not granted any loans, guarantees and investments made as mentioned under Section 186 of the Companies Act, 2013.

 

15. REQUIREMENTS FOR MAINTENANCE OF COST RECORDS

The Company is not required to maintain the cost records as specified by Central Government under section 148 (1) of the Companies Act, 2013 and rules made thereunder.

 

16. SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANY

The company does not have any company, which is its subsidiary, associate or joint venture. Hence the details of this clause are not applicable to the Company.

 

17. BOARD OF DIRECTORS

The Company’s policy is to have an appropriate blend of independent and non-independent directors to maintain the independence of the Board and to separate the Board functions of governance and management.

The Board of Directors holds fiduciary position and is entrusted with the responsibility to act in the best interests of the Company. The Board at its meetings deliberate and decide on strategic issues including review of policies, financial matters, discuss on business performance and other critical matters for the Company. Committees constituted by the Board focus on specific areas and take informed decisions within the framework of the delegated authority and responsibility and make specific recommendations to the Board on matters under its purview. Decisions and recommendations of the committees are placed before the Board for consideration and approval as required.

 

Composition

In compliance with the provisions of regulation 17(1)(a) of SEBI Listing Regulations, the board of directors shall have an optimum combination of executive and non-executive directors with at least one independent woman director and not less than fifty per cent of the board of directors shall be non-executive directors.

As on March 31, 2023, Board of the Company comprise of six Directors consisting of Two Executive Directors including One Executive Chairman, three Independent Directors including One Women Independent Director and One Non-Executive Non-Independent Director.

 

Reappointment of Directors Ms. Pooja H. Goyal

Ms. Pooja H. Goyal (DIN: 07813296) was reappointed as an Independent Director for the second term of 5

(Five) years commencing from December 14, 2022, to December 13, 2027 at the 14th Annual General Meeting of the Company held on September 07, 2022.

Mr. Sandeep K. Singh

The Board of Directors at their meeting held on May 29, 2023 re-appointed Mr. Sandeep Singh Kumar (DIN: 02814440) as an Independent Director on the Board of the Company for a second term of 5 (five) consecutive years commencing from August 23, 2023, subject to approval of members at the ensuing AGM.

Mr. Shantilal J. Mehta

The Board of Directors at their meeting held on May 29, 2023 approved re-appointment of Mr. Shantilal J. Mehta (DIN: 00134162) as Chairman and Managing Director of the Company for a period of 3 (three) years with effect from October 01, 2023 subject to approval of members at the ensuing AGM.

Director Retiring by Rotation Mr. Jayesh N. Mehta

In terms of Section 152 of the Act, Mr. Jayesh N Mehta (DIN: 00510313), Director, retires by rotation and being eligible, offers himself for re-appointment at the ensuing

AGM.

 

Appointment of Directors

1) The Board of Directors at their meeting held on May 29, 2023 appointed Mr. Atul Kumar (DIN: 09045002) as an ‘Additional Director in the category of Non-Executive-Independent Director’ for a period of 5 (five) years effect from May 29, 2023 subject to the approval of the members at the ensuing AGM.

2) Appointment of Mr. Dinesh Mohanlal Jain (DIN: 10043560) as an Additional Director of the Company with effect from May 29, 2023. The Board of Directors of the Company have further subject to approval of members at the ensuing AGM of the Company appointed Mr. Dinesh Mohanlal Jain as Whole-Time Director for a period of 03 (Three) years effective from May 29, 2023.

 

Change in Designation of Director

The Board of Directors at their meeting held on May 29, 2023 approved the change in designation of Mr. Jayesh N. Mehta (DIN: 00510313) from Non-Executive Non-Independent Director to Executive Whole-Time Director for a period of 03 (Three) years with immediate effect subject to the approval of the members at the ensuing

AGM.

The brief resume of the Directors to be appointed at this Annual General Meeting and other related information has been detailed in the Notice convening the 15th Annual General Meeting.

 

Composition of Board of Directors

The Composition of the Board of Directors of the Company as on March 31, 2023, are as follows:

Name of Director

DIN

Designation

1. Mr. Shantilal J. Mehta

00134162

Chairman and Managing Director

2. Mr. Nemichand J. Mehta

01131811

Whole-time Director

3. Mr. Jayesh N. Mehta

00510313

Non- Executive Non-Independent Director

4. Mr. Ashok K. Thakur

07573726

Non-Executive Independent Director

5. Mr. Sandeep K. Singh

02814440

Non- Executive Independent Director

6. Ms. Pooja H. Goyal

07813296

Non-Executive Independent Director

 

Declaration by Independent Directors

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1) (b) of Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and have also confirmed their registration with the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs in compliance with the requirements of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

 

Performance Evaluation

Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board of your Company has carried out an annual evaluation of its own performance and that of its committees as well as reviewed the performance of the Directors individually for financial year 2022-23. The performance evaluation of the

Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The Independent Directors also carried out evaluation of the Chairman of the Company, considering the views of the other Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

 

Process of evaluation

Feedback for each of the evaluations was sought by way of internal structured questionnaires with the Directors and the Committee for accessing the questionnaires and submitting their feedback/comments. The questionnaires for performance evaluation are in alignment with the guidance note on Board evaluation issued by the

Securities and Exchange Board of India ("SEBI"), vide its circular dated 5 January 2017 and cover various attributes/functioning of the Board such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties etc., based on the criteria approved by the NRC. The Members were also able to give qualitative feedback and comments apart from the standard questionnaires.

 

Results of evaluation

The outcome of the evaluations was presented to the

Board, the NRC and the Independent Directors at their respective meetings for assessment and development of plans/suggestive measures for addressing action points that arise from the outcome of the evaluation. The

Directors expressed their satisfaction on the parameters of evaluation, the implementation and compliance of the evaluation exercise done and the results/outcome of the evaluation process. The outcome of the evaluations, with the feedback/comments given by the Board Members are provided in the section titled ‘Report of Corporate Governance’, which forms part of this report.

 

Familiarisation Program for Independent Directors

The Directors are afforded many opportunities to familiarise themselves with the Company, its Management, and its operations during their association with the Company. The Company conducts induction and familiarisation programs for the Directors joining the Board including site visits, to familiarise them.

All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates terms and conditions of their engagement.

The Managing Director, CEO, CFO and the Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company’s values and commitments. They are also introduced to the organisation structure, constitution, terms of reference of the Committees, board procedures, management strategies etc. Further the Directors are on a quarterly basis apprised on the powers, role and responsibilities and constitution of the Board Committees, its charter and terms of reference and changes therein,

Committee meetings held during a quarter. The Board Members are apprised by the Senior Management at quarterly Board Meetings by way of presentations which include industry outlook, competition update, company overview, operations and financial highlights, regulatory updates, presentations on internal control over financial reporting, succession planning, strategic investment, etc. which not only give an insight to the Directors on the Company and its operations but also allows them an opportunity to interact with the Senior Management. The Directors are also informed of the various developments in the Company.

The details of the familiarization programmes for Directors are available on the Company’s website,viz.http://www. navkarcfs.com/b/download/familarisation-programmesfor independentdirectors.pdf?v=1.4

 

Remuneration Policy and criteria for determining attributes, qualification, independence, and appointment of Directors

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations, the Nomination and Remuneration Committee is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The Nomination and Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees. In line with this requirement, the Board has adopted the Nomination and Remuneration Policy, which is reproduced in Annexure III forming part of this report.

 

Salient Features of this policy are as under:-

The Philosophy for remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The remuneration policy is aligned to this philosophy.

Independent Directors and Non-Independent Non-Executive Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013 and approved by Board of Directors. (for attending the meetings of the Board and of committees of which they may be members).

Overall remuneration should reflect the size of the company, complexity of the sector/industry/ company’s operations and the company’s capacity to pay the remuneration.

The Nomination and Remuneration Committee will recommend to the Board the remuneration paid for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by directors other than in meetings.

The extent of overall remuneration to Managing Director / Executive Directors/ Key Managerial Personnel / rest of the employees should be sufficient to attract and retain talented and qualified individuals suitable for every role.

The remuneration mix for the Managing Director / Executive Directors is as per the resolutions approved by the shareholders.

The said policy of the Company has been hosted on the website of the Company athttps://www. navkarcfs.com/b/download/policies/nomination-&remuneration-policy.pdf?v=1.3

 

Directors’ Responsibility Statement

Based on the framework of internal financial controls (IFCs) and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of IFCs over financial reporting by the Statutory Auditors and the reviews performed by management and the relevant Board

Committees, including the Audit Committee of Directors, the Board is of the opinion that the Company’s IFCs were adequate and effective during FY23.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: a. In the preparation of the annual accounts for the financial year ended 31st March, 2023 the applicable accounting standards had been followed and there are no material departures therein; b. They had in consultation with Statutory Auditors 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 on 31st March, 2023 and of the profitof the Company for the financial year ended on that date; c. 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; d. They have prepared the annual accounts on a going concern basis; e. They have laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and were operating effectively during the financial year ended 31st March, 2023; f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the financial year ended 31st March, 2023.

 

Board Meetings

During the period under review, 07 (Seven) Board Meetings were duly convened and held. The intervening gap between the said meetings were in accordance with the provisions of Companies Act, 2013 read with relevant Rules made thereunder, Secretarial Standard-I Issued by Institute of Company Secretaries of India and provisions of SEBI Listing Regulations. The dates of Board meetings and details of attendance of each director has been disclosed in the Corporate Governance Report.

 

Annual General Meeting

The 14th AGM of the Company was held on Wednesday, September 07, 2022

 

Board Committees

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following statutory committees constituted by the Board function according to their respective roles and defined scope:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Finance and Operation Committee

6. Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective Committees are given in the Report on Corporate Governance, which forms a part of this Annual Report.

 

Audit Committee

As on 31st March 2023, the Audit Committee comprised of Three Directors, of whom Two Directors, including the Chairman are Independent. All the Members of the Committee possess strong accounting and financial management knowledge.

 

Composition of Audit Committee

Details of the composition of the Audit Committee as on 31st March, 2023 is given hereunder

Name

Category

Designation

1 Mr. Ashok K. Thakur

Non - Executive, Independent Director

Chairman

2 Ms. Pooja H. Goyal

Non - Executive, Independent Director

Member

3 Mr. Nemichand J. Mehta

Whole-Time Director

Member

 

The Company Secretary of the Company acts as the secretary to the Committee.

 

Recommendation of Audit Committee

During the period under review, there were no instances of non-acceptance of any recommendation of the Audit

Committee of the Company by the Board of Directors.

 

Meeting of Independent Directors

The Independent Directors of the Company meet without the presence of other Directors or the Management of the Company.

The Meetings are conducted to enable the Independent Directors to, inter-alia, discuss matters pertaining to review of performance of the Non-Independent Directors, the Board as a whole and the Chairman of the Company (taking into account the views of the Non-Executive Directors) and to assess the quality, quantity and Company’s timeliness of flow Management and the Board that is necessary for the

Board to effectively and reasonably perform their duties.

During the financial year under review, the Independent Directors met on May 19, 2022 and the Meeting was attended by all the Independent Directors of the Company No sitting fees were paidtotheIndependentDirectorsof is attached in the Corporate the Company for participating in the said meeting.

 

Declaration by Independent Directors

In accordance with provisions of Section 149(7) and Schedule IV of the Companies Act, 2013, and Regulation 16 of the Listing Regulations all the Independent

Directors have submitted the declaration of independence respectively, confirming that they meet the criteria of independence.

Board, in terms of Regulation 25 of Listing Regulations has examined the veracity of declarations submitted by respective directors. Further, none of the Directors are debarred from holding office as Director by virtue of any order of the SEBI or any other competent authority. The Independent Directors have complied with the Code applicable for Independent Directors as stipulated under schedule IV of the Companies Act, 2013.

 

Declaration from Directors and Practicing Professional

Based on the written representations pursuant to provisions of section 164 of the Companies Act, 2013, received from all the Directors of the Company, none of the directors of the Company is disqualified to act as a Director as on March 31, 2023.

M/s. Mehta & Mehta, Practicing Company Secretaries, also have certified that none of the Directors of the Company have been debarred or disqualified from being appointed or continuing as director of the Company by SEBI or MCA or any such statutory authority. The said certificate

Report, which forms part of this Annual Report.

 

18. KEY MANAGERIAL PERSONNEL

As on 31st March, 2023, the following persons have been designated as Key Managerial Personnel ("KMP") of the Company pursuant to the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Name of Director

PAN/DIN

Designation

1. Mr. Shantilal J. Mehta

00134162

Chairman & Managing Director

2. Mr. Nemichand J. Mehta

01131811

Whole-Time Director

3. Mr. Dinesh Mohanlal Jain

ABMPJ0989J

Chief Executive Officer (Upto February 11, 2023)

4. Mr. Arun Sharma

BHEPS6907E

Chief Executive Officer (From February

5. Mr. Anish S Maheshwari

AKEPM0964B

Chief Financial Officer

6. Ms. Deepa Gehani

BTHPG0937P

Company Secretary&ComplianceOfficer

 

19. AUDITORSAND THEIR REPORTS

Statutory Auditor

M/s. Uttam Abuwala Ghosh & Associates (FRN 111184W), Chartered Accountants, are the Statutory Auditor of the Company appointed by the Members of the Company at the 11th AGM held on 27th September 2019. M/s. Uttam Abuwala Ghosh & Associates was appointed for a term of five years commencing from the conclusion of the 11th AGM up to the conclusion of 16th AGM of the Company. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013. Further, as required under the relevant regulation of Listing Regulations the Statutory Auditors had also confirmed that they had subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and they hold a valid certificate Review Board of ICAI.

 

Unmodified Statutory Auditor Reports

The Statutory Auditors’ Reports on the Annual Audited Financial Statements for the financial year 2022-23 forms part of this Annual Report and are unmodified i.e. they do not contain any qualification, reservation, or adverse remark.

 

Secretarial Auditor

M/s. Mehta & Mehta,PracticingCompanySecretaries, audit observations are presented to the Mumbai have been appointed as the Secretarial Auditor of the Company to conduct the audit of the secretarial records of the Company and for providing Annual Secretarial Compliance Report, Corporate Governance Certifications and other certifications as may be under the SEBI Listing Regulations.

 

Annual Secretarial Compliance Report

The Company has obtained an Annual Secretarial Compliance Report for the financial year ended March 31st, 2023 from M/s. Mehta & Mehta in compliance with the Regulation 24A of the SEBI Listing Regulations and the SEBI circular CIR/ CFD/CMD1/27/2019 dated 8th February, 2019. The said Report has been submitted to the Stock Exchanges within the prescribed statutory timelines The Annual Secretarial Compliance Report in compliance with Regulation 24A of the SEBI Listing Regulations is annexed to the Report on Corporate Governance and forms part of this report.

 

Unmodified Secretarial Audit Report and Annual

Secretarial Compliance Report

The Secretarial Audit Report and the Annual Secretarial Compliance Report for the financial year ended March

31st, 2023 are unmodified i.e. they do not contain any qualification, reservation, or adverse remark.

The Secretarial Audit Report in Form No. MR-3 as per the provisions of Section 204 of the Act read with Rules framed thereunder for the financial year ended March 31st, 2023 is annexed to this Boards’ Report as

Annexure I and forms part of this Annual Report.

 

Internal Audit

The Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company’s processes.

The Board has appointed M/s. K.V.M.R. & Company (FRN

016531C), Chartered Accountants as the Internal Auditor of the Company. The Internal Auditor reports directly to the Chairman of the Audit Committee. The Internal Audit function develops an audit plan for the Company, which covers, inter-alia, corporate, core business operations, as well as support functions and is reviewed and approved by the Audit Committee.

The internal audit approach verifies compliance with the operational and system related procedures and controls.

Significant

Committee, together with the status of the management actions and the progress of the implementation of the recommendations on a regular basis.

 

Cost Audit

The provisions of Cost Audit and maintenance of cost records as specified by the Central Government under Section 148 of the Act read with the Rules framed thereunder, are not applicable to the Company and hence such accounts and records are not required to be maintained by the Company.

 

Reporting of frauds by Auditors

During the financial year under review, the Statutory Auditor and the Secretarial Auditor of the Company have not reported any instance of fraud committed in the Company by its officers or employees to the Audit Committee under Section 143(12) of the Act.

 

20. RELATED PARTY TRANSACTIONS

All transactions entered by the Company during the financial year 2022-23 with related parties were in compliance with the provisions of the Companies Act,

2013 and Listing Regulations. All such transactions were approved by the audit committee and the board, from time to time and the same are disclosed in the financial statements of your company for the year under review.

The Company had obtained prior approval of the Audit Committee for all the related party transactions during the Financial Year 2022-23 as envisaged in Regulation 23(2) of the Listing Regulations and Section 177 of the Companies Act, 2013.

Further, the Audit Committee had given prior omnibus approval under Regulation 23(3) of the Listing Regulations and provisions of section 177 of the Companies Act, 2013, for related party transactions that are foreseen and of repetitive nature during the period under review and the required disclosures are made to the committee on quarterly basis.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) read with section 134(1)(h) and applicable rules of the Companies Act, 2013 are provided in the prescribed form AOC-2 as

 

Annexure II Which forms part of this Report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company through the link: http:// navkarcfs.com/b/download/policies/RPT-Policy.pdf

 

21. CORPORATE SOCIAL RESPONSIBILITY("CSR")

The Company believes that as a responsible corporate citizen, it has a duty towards society, environment, and the Country where it operates. The Company’s sense of responsibility (which goes beyond just complying with operational and business statutes) towards the community and environment, both ecological and social, in which it operates is known as corporate social responsibility.

 

CSR Committee

The CSR Committee of the Board is constituted in compliance with the provisions of the Act read with the applicable rules made thereunder.

The CSR Committee of the Company comprised of Three Directors as on 31st March, 2023 as detailed hereunder. The Chairman of the CSR Committee is an Independent Director and the Company Secretary of the Company acts as the secretary to the CSR Committee.

Details of the composition of the CSR Committee as on 31st March, 2023 is given hereunder.

Name

Category

Designation

1 Ms. Pooja H. Goyal

Non - Executive, Independent Director

Chairman

2 Mr. Shantilal J. Mehta

Chairman & Managing Director

Member

3 Mr. Nemichand J. Mehta

Whole-Time Director

Member

 

The terms of reference of CSR committee has been disclosed in the Corporate Governance section of Board’s

Report and a detailed breakup of expenditure carried out on CSR activities has been disclosed in the Corporate Social Responsibility Report attached as Annexure IV of Board’s Report.

 

CSR Policy

On the recommendation of the CSR Committee, the Board of Directors have adopted and formulated comprehensive Corporate Social Responsibility policy, which sets out the objective, areas, activities and the manner in which the expenditure on CSR obligation would be carried out by the Company.

The CSR Policy including a brief overview of the projects or programs approved by the Board with implementation schedule thereof is uploaded on the Company website and can be accessed through the weblink https://www. navkarcfs.com/b/download/policies/CSR-Policy.pdf

 

CSR Spend

During the financial year under review, the Company has spent INR 1,35,00,000/- (Indian Rupees: One Crore Thirty Five Lakhs Only) towards CSR activities as stipulated under Schedule VII of the Act (being more than 2% of the average net profits of the Company during the preceding three financial years). There is no unspent CSR expenditure as on March 31st, 2023.

 

Impact Assessment of CSR Projects

The Company’s average CSR obligation in the three immediately preceding financial years does not exceed INR 10 crores. Hence the Company is not required to undertake impact assessment, through an independent agency in terms of Rule 8(3) (a) of the Companies (Corporate Social Responsibility) Rules, 2014. However, in line with the CSR Policy, the Company voluntarily conducts internal assessments, situational analysis, need assessment surveys, project visits or social audits etc. to monitor and evaluate the CSR projects of the Company.

 

Annual Report on CSR

Annual Report on CSR for the financial year 2022-23 including the salient features of the CSR Policy adopted by the Company is annexed as Annexure IV of this report and forms part of this Annual Report.

 

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Vigil Mechanism as envisaged in the Act, the Rules framed thereunder and the SEBI Listing Regulations, is implemented through the Company’s Whistle Blower Policy. The Whistle Blower Policy provides a mechanism for the Directors, employees and all the stakeholders of the Company to report their genuine concerns and provides adequate safeguard against victimization to those who use such mechanism.

Pursuant to the Policy, the Whistle Blower can raise concerns relating to Reportable Matters (as defined in the Policy) such as unethical behavior, breach of Code of Conduct Policy, actual or suspected fraud, any other malpractice, impropriety or wrongdoings, illegality, non-compliance of legal and regulatory requirements, retaliation against the Directors & Employees and instances of leakage of/suspected leakage of Unpublished Price Sensitive Information of the Company etc. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances to the Audit Committee, and provides for adequate safeguards against victimization of

Whistle Blower, who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases. The Audit Committee oversees the functioning of the same Further, no personnel have been denied access to the Audit Committee during the financial year under review.

The details of this Policy is explained in the Corporate Governance Report and also posted on the website of the Company at: https://www.navkarcfs.com/b/download/ policies/vigil-mechanism-or-whistle-blower-policy. pdf?v=1.3

There was no instance of such reporting received during the financial year ended March 31, 2023.

 

23. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance towards sexual harassment at its workplace and has adopted a Policy for Prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") to provide a safe, secure and enabling environment, free from sexual harassment. The Policy is gender neutral. Internal Complaints Committee has been set across regions to redress complaints received regarding sexual harassment.

During the financial year under review and pursuant to Rule 8(5)(x) of the Companies (Accounts) Rules, 2014, the Company has complied with the provisions relating to the constitution of Internal Complaints Committee ("ICC") under the POSH Act.

The Company periodically conducts sessions for employees across the organization to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act. During the Financial Year 2022-

23, no case in the nature of sexual harassment was reported at any workplace of the Company.

 

24. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India. The Company has also implemented several best governance practices.

The Report on Corporate Governance as stipulated under

Regulation 34 of Listing Regulations, is provided together with a certificate compliance of conditions of corporate governance as the stipulated under listing regulations. A certificate Chief Executive Officer and Chief Financial Officer of the company in terms of Listing Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit

Committee, is also annexed. Also a declaration signed by the Chief Executive Officer stating that members of the board and senior management personnel have affirmed the compliance vide Code of Conduct of the board and senior management is attached to the report on corporate governance.

 

25. BUSINESS RESPONSIBILITY REPORT

As stipulated in Regulation 34(2)(f) of the SEBI Listing

Regulations, the top one thousand listed entities based on market capitalization shall report Business Responsibility and Sustainability Report on the environmental, social and governance disclosures, in the format as may be specified by the Board. During the year under review this report is not applicable to our Company.

 

26. COMPLIANCE WITH SECRETARIAL STANDARD

The Company complies with all applicable mandatory secretarial standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively issued by the Institute of Company Secretaries of India.

 

27. ANNUAL RETURN

In accordance with provisions of Section 134 of the Companies Act, 2013 read with applicable rules made thereunder, the Annual Return in the prescribed format is available on the website of the Company at the link:https:// www.navkarcfs.com/b/download/Annual-Retrun-2023. pdf

 

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earning & outgo is given in

Annexure V forms part of this report.

 

29. CODE OF CONDUCT FOR DIRECTORS AND KMPs

The Board of Directors of the Company has adopted the Code of Conduct for its Directors and Senior Management Personnel of the Company in compliance with Regulation 17(5) of the Listing Regulations. For the financial year 2022-23, all Board members and Senior Management personnel of the Company have affirmed the compliance with the code as applicable to them and a declaration to this effect signed by the Chief Executive Officer and forms part of the Corporate Governance Report. The Company’s Code of Conduct for Directors and Senior Management is hosted on the website of the Company at https://www.navkarcfs.com/b/download/ policies/code-of-conduct.pdf . The Declaration signed by the Chief Executive Officer stating that members of the board and senior management personnel have affirmed the compliance vide Code of Conduct of the board and senior management is attached to the report on corporate governance.

 

30. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments thereto, are provided in the Annual Report and is attached as Annexure VI and forms an integral part of this Report.

In terms of Section 136 (1) of the Act, the Annual Report and the Audited Financial Statements are being sent to the Members and others entitled thereto. The said statement is also available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing AGM.

 

31. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;

3. Disclosure with respect to voting rights not exercised directly by the employees in respect of shares to which the ESOP Scheme relates.

4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

5. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

6. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the

Banks or Financial Institutions along with the reasons thereof.

 

32. CAUTIONARY NOTE

The statement in the Directors Report and the Management Discussion and Analysis Report describing the Company’s objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Company’s business as well as its ability to implement the strategy. The Company does not undertake to update these statements.

 

33. ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment, in particular during this year. The Directors place on record their special gratitude towards the front-line employees who were working in our CFSs/ICD and in the market to ensure timely delivery of services to the clients.

Your Directors would also like to place on record the sincere appreciation for the assistance and guidance provided by the Ministry of Corporate Affairs, the Securities and Exchange Board of India, BSE Limited, the National Stock Exchange of India Limited, National Securities Depository Limited, Central Depository Services (India) Limited and the Credit Rating Agencies, Government and other regulatory Authorities, other statutory bodies,

Company’s bankers, Members for the assistance, cooperation and encouragement and continued support extended to the Company.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. customers, dealers, vendors, and other business partners for the excellent support received from them during the year.

On Behalf of the Board of Directors

Navkar Corporation Limited

Shantilal J Mehta

Chairman and Managing Director

DIN: 00134162

Place: Navi Mumbai
Date: May 29, 2023