Netlink Solutions (India) Ltd Directors Report.
Directors Report to the Members
Your Directors present their Thirty Fourth Annual Report together with the Audited Financial Statement of your Company for the year ended 31st March, 2019.
|(Rs. in Lakhs|
|Profit Before Depreciation and Tax||(32.22)||33.71|
|Net Profit before Tax||(35.61)||38.41|
|Income Tax- Current Tax||-||11.56|
|Income Tax-Earlier year||-||0.20|
|Deferred tax Charges/(Credit)||(4.13)||17.35|
|Net Profit after Tax||(39.74)||9.30|
The Board has not recommended any Dividend for the current financial year in order to conserve its resources.
Out of the profits available for appropriation, no amount has been transferred to the General Reserve.
Transfer of unclaimed dividend to investor education and protection fund
The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no unpaid/unclaimed dividend lying with the Company.
Operations/ State of the Companys Affairs
During the year the Total Income of the Company has been Rs. 171.31 Lacs as compared to previous year total of Rs. 512.93 Lacs. Our company has made Loss amounting to Rs.39.74 Lacs after tax as compared to the last year Profit of Rs.9.30 Lacs.
During the year, 4,37,775 equity shares were bought back by the Company and the same were extinguished vide confirmation letter dated July 16, 2018 issued by NSDL Netlink Solutions (India) Limited has sold Exhibition business containing "Stationery & Write Show, Corporate Gift Show and Houseware and Kitchenware Show" to Messe Frankfurt Trade Fairs India Private Limited.
Currently, the Company has two divisions, Software Division and Print Media Division. The software division has, off late, not performing to our expectations. However, the Print Media Division is doing well for the Company. We experienced that the Print Media is gradually edging past electronic media. The Company cut costs and were looking for right opportunity.
The Board at its meeting dated 9th February, 2018 approved the proposal for Buy Back upto 7,41,750 Equity Shares of Rs. 10/- each at a price of Rs. 17/- per Equity Share. The shareholders approved the said proposal of buy back of equity shares through the postal ballot that concluded on 8th May, 2018. The Buyback offer comprised of purchase of 7,41,750 (Seven Lakh Forty One Thousand Seven Hundred Fifty) Equity Shares of Rs.10/- (Rupees Ten Only) each (representing around 25% of the total paid-up equity share capital of the Company) at a price of Rs. 17/- (Rupees Seventeen Only) per equity share, payable in cash for a total consideration not exceeding Rs. 1,26,09,750/- (Rupees One Crore Twenty Six Lakh Nine Thousand Seven Hundred Fifty Only). The buyback was offered to all eligible equity shareholders (including those who became equity shareholders as on the record date i.e. 21st May, 2018) on a proportionate basis through the tender offer route. The Buy-back offer opened on June 19, 2018 and closed on July 02, 2018.The Company concluded the buyback procedures on July 16, 2018 and 4,37,775 equity shares were extinguished. The Company has utilized general reserve for the buyback of its shares. In accordance with Section 69(1) of the Companies Act, 2013, the Company has approved creation of Capital Redemption Reserve of Rs. 43,77,750 equal to the nominal value of the shares bought back as an appropriation from the general reserve/surplus in profit and loss account.
There is changes in Share Capital during the year due to buyback of Equity Shares. The Company has completed Buy-Back of 4,37,775 equity shares of Rs. 10 each and the same were extinguished vide confirmation letter dated July 16, 2018 issued by NSDL. Post buy back, the Paid-up share capital of the Company has been reduced from 29,67,000 equity shares of Rs. 10 each to 25,29,225 equity shares of Rs. 10 each.
Sale of Promoters share
Mrs. Rupa Modi, Promoter of the Company sold 8500 equity shares representing 0.33% of the share Capital of the Company. The shareholding of Mrs. Rupa Modi in the Company have come down from 25.22% to 24.89% of the total share capital of the Company.
Employee Stock Options Scheme
During the year under the review the Company has not issued any Shares pursuant to the Employee Stock Options Scheme.
Holding Company/Subsidiary Company
The Company does not have any Subsidiary, Joint Venture or Associate Company.
Management Discussion and Analysis Report
In accordance with regulation 34 of SEBI (Listing Obligations and Disclose Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Report as Annexure - I.
As per the Regulation 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which are effective December 1, 2015, provisions with respect to Corporate Governance compliance shall not apply to a listed entity with Paid-up Capital upto Rs. 10,00,00,000 (Indian Rupees Ten Crore) and Net Worth upto Rs. 25,00,00,000 (Indian Rupees Twenty Five Crore), as on the last day of previous financial year.
The Paid-up Share Capital of the Company is Rs. 2.53 Croreonly and the Net Worth is Rs. 11.47 Crore only and therefore the requirement of compliance with Corporate Governance is not applicable to the Company.
Corporate Social Responsibility (CSR)
The provisions related to Corporate Social Responsibility are not applicable to the company.
Directors and KMP
A. Directors and Key Managerial Personnel
There are no changes in the Board of Directors of the Company during the year under review.
The Board Comprises of Mr. Minesh Modi, Whole-time Director and Mrs. Rupa Modi, Executive Director and Chief Financial Officer. Mr. Yogesh Becharbhai Girnara, Mr. Rajendra S Lokare and Mr. Premnath T Mishra are the Independent Directors of the Company and Ms. Ayushi Thakuriya is Company Secretary of the Company.
B. Retire by Rotation
In terms of provisions of Section 152(6) of the Act, Mr.Minesh Vasantlal Modi (00378378),being longest in the office, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
C. Re-appointment of Independent Directors for a Second Term
The Nomination and Remuneration Committee, on the basis of performance evaluationof Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. Yogesh Becharbhai Girnara, Mr. Rajendra S Lokare and Mr. Premnath T Mishra during their tenure, has recommended to the Board that continued association of Mr. Yogesh Becharbhai Girnara, Mr. Rajendra S Lokare and Mr. Premnath T Mishra as Independent Directors would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends re-appointment of:
i) Mr. Yogesh Becharbhai Girnara for a further period from 30th September, 2019 to 29th September, 2024;
(ii) Mr. Rajendra S Lokare for a further period from 30th September, 2019 to 29th September, 2024; and
(iii) Mr. Premnath T Mishra for a further period from 30th September, 2019 to 29th September, 2024; to hold office as Non-Executive Independent Directors of the Company, not liable to retire by rotation, on the Board of the Company. The Company has received the requisite Notices from respective directors in writing proposing their re-appointment as Independent Directors.The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act, and SEBI (LODR) Regulations.
Pursuant to provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclose Requirements) Regulations, 2015 the Board of Directors has carried out an annual performance evaluation of its own performance, the Directors individually including Independent Directors. Evaluation was done by Nomination and Remuneration Committee. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the evaluation such as adequacy of the size and composition of the Board and Committee thereof with regard to skill, experience, independence, diversity; attendance and adequacy of time given by the Directors to discharge their duties; Corporate Governance practices etc. The Directors expressed their satisfaction with the evaluation process.
Receipt of any commission by MD/WTD from Company or for receipt of commission/remuneration from its holding or Subsidiary Company during the year under review, the Company has not paid any commission to any of its directors. The Company does not have any subsidiary/holding Company, therefore, the question of receipt of any amount does not arise.
Separate Meeting of the Independent Directors
In Compliance with the provision of the Companies Act, 2013 SEBI (Listing Obligations and Disclose Requirements) Regulations, 2015, the Independent Directors held a Meeting on March 30, 2019, and they, inter alia:
i. Reviewed the performance of non-independent directors and the Board as a whole;
ii. Reviewed the performance of the Chairperson of the Company
iii. Assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board, which is necessary for the Board to effectively and reasonably perform their duties.
The Independent Directors holds a unanimous opinion that the Non-Independent Directors bring to the Board constructive knowledge in their respective field. The Independent Directors expressed their satisfaction with overall functioning and implementations of their suggestions.
Familiarisation Programme for Independent Directors
The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters alongwith other details as required pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the website of the Company at www.nsil.co.in.
Declaration of Independent Directors
The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that they meet the criteria of Independent laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Independent Directors of the Company have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.
The Board met 7 times during the financial year. The maximum interval prescribed in the Companies Act, 2013.
During the year under review the Board of Directors met 7(Seven) times on May 30, 2018, June 14, 2018, July 03, 2018, August 14, 2018, November 02, 2018, February 05, 2019 and March 30, 2019.
The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Directors Responsibility Statement
Pursuant to Section 134(3)(c) of the Act, your Directors state that:
(a) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable Accounting Standards read had been followed and there are no material departures from the same;
(b) they 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 as at March 31, 2019 and of the profit of the Company for 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 this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared 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 were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company has devised proper systems to ensure compliance with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) and is in compliance with the same.
Internal Financial Controls and their Adequacy
The Company has in place adequate internal financial control with reference to the size and nature of its business. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function, significant internal audit findings and follow-ups thereon.
Composition of Audit Committee
The Audit Committee comprises of Mr. Minesh Modi, Mr. Yogesh Girnara and Mr. Rajendra Lokare. Mr. Yogesh Girnara is the Chairman of the Committee. The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committee met 4 times during the year under review on May 30, 2018, August 14, 2018, November 02, 2018, and on February 05, 2019.
The Committee discussed on financials, audit reports and appointment of auditors. The Board accepted all recommendations of the Audit Committee made from time to time. All the members of the Committee attended all the meetings.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of 3 Independent Directors,Mr.Yogesh B Girnara, Mr. Rajendra S Lokare and Mr. Premnath T Mishra.The Committee met One time i.e. on May 30, 2018. All the members of the Committee attended all the meetings. The constitution and terms of reference are in compliance with the provisions of the Act and the SEBI Listing Regulations and the SEBI (Share Based Employee Benefits) Regulations, 2014.
Policies on Appointment of Directors and Remuneration of Directors, Key Managerial Personnel and Employees
In accordance with the provisions of section 134(3) (e) of the Companies Act, 2013 ("the Act") read with section 178(2) of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors.
Your Company has also adopted the Policy on Remuneration of Directors, Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section (4) of section 178, and the same are appended as Annexure II-A and Annexure II-B and form part of this Report.
Particulars of Remuneration of Employees and Other Required Disclosures
There are no employees drawing remuneration in excess of the limits specified in Rule 5(2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 further amended by Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.
The ratio of remuneration of each Director to the median employees remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure III.
Vigil mechanism/Whistle Blower Mechanism
The Company has established a vigil mechanism by adopting a Whistle Blower Policy for Directors and employees to report genuine concerns in the prescribed manner. The vigil mechanism is overseen by the Audit Committee and provides adequate safeguards against victimization of employees and Directors. Whistle Blower Policy is a mechanism to address any complaint(s) related to fraudulent transactions or reporting intentional non-compliance with the Companys policies and procedures and any other questionable accounting/operational process followed. It provides a mechanism for employees to approach the Chairman of Audit Committee or Chairman of the Company or the Corporate Governance Cell. During the year, no such incidence was reported and no personnel were denied access to the Chairman of the Audit Committee or Chairman of the Company or the Corporate Governance Cell. The Whistle Blower Policy of the Company is available at web linkhttp://nsil.co.in/policv.php.
The Company has in place the procedure to inform the Board about the risk assessment and minimization procedures. Your Company has appropriate risk management systems in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. Audit Committee has been assigned the task of ensuring Risk Management, for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time. The Board periodically reviews implementation and monitoring of the risk management plan for the Company including identification therein of elements of risks, if any, which in the opinion of the Board may threaten the existence of the Company.
The Shareholders at their 32ndAnnual General Meeting ("AGM") held on 30th September, 2017, approved the appointment Jhawar Mantri and Associates (ICAI Firm Registration No.113221W) as the Statutory Auditors of the Company for the period of 5 years commencing from the conclusion of the 32ndAGM till the conclusion of 37thAGM.
Pursuant to amendment to section 139 (1) of the Act, ratification of appointment of Statutory Auditor at every Annual General Meeting is not required.
As required under the provisions of Section 139(1) and 141 of the Act, read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the auditors to the effect that they are eligible to continue as Statutory Auditor of the Company.
The notes of the financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.
No frauds are reported by the Auditors under sub section (12) of Section 143 of the Companies Act, 2013.
The Board has appointed M/s. Tarun Jain &Associates, Practicing Company Secretaries to conduct the Secretarial Audit for the financial year 2018-19. The Secretarial Audit report for the financial year ended March 31, 2019 is annexed herewith and marked as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013
There was no loan advanced, guarantees given or security provided by the Company under Section 186 of the Companies Act, 2013 during the year under review. Particulars of investments made are provided in the financial statement (Please refer to Note no. 4 to the financial statement).
Contracts and Arrangements with Related Parties
All contracts/transactions, if any, executed by the Company during the financial year with related parties were on arms length basis and in ordinary course of business. In the opinion of the Board there were no material contracts entered into by the Company and therefore the particular required in Form AOC 2 pursuant to Section 188 is not given.
Deposits, Loans and Advances
Your Company has not accepted any deposits from the public or its employees during the year under review.
Explanation or Comments on Qualifications, Reservations or adverse remarks or disclaimers made by the Auditors and the Practicing Company Secretary in their reports
There were no qualifications, reservations or adverse remarks made either by the Auditors or by the Practicing Company Secretary in their respective reports.
Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption is annexed herewith and forms part of this report as Annexure V.
Conservation of Energy
The company is not a manufacturing company and hence the details in respect of the above are not applicable.
Research and Development
The company has not undertaken any Research and Development activity in any specific area during the year under review, and hence no cost has been incurred towards same.
Extract of Annual Return
Pursuant to sub-section 3(a) of section 134 and sub-section (3) of section 92 of the Companies Act, 2013, with rule 12 off the Companies (Management and Administration) Rules, 2014, extract of the Annual Return forms part of this Report as Annexure VI.
A copy of the extract of the annual return, prepared under Section 92(3), is available on the link: www.nsil.co.in. the web address of the Company, as required under Section 134(3)(a) of the Companies Act, 2013.
Material Changes and Commitment affecting Financial Position of the Company which have occurred between the end of the financial year of the Company
The Board of Directors of the Company, at its meeting held on 3rd July, 2018, approved the Sale of 100% rights and ownership of the Exhibition business containing "Stationery & Write Show, Corporate Gift Show and Houseware and Kitchenware Show"to Messe Frankfurt Trade Fairs India Private Limited ("Buyer"), subject to approval of members under Section 180(1)(a) of the Companies Act, 2013 and other requisite approvals, if any. Subsequently, approval of the Members of the Company was obtained on 8th August, 2018 for the proposed transaction under the provisions of Section 110 of the Act read with applicable Rules through postal ballot. The proposed transaction has been completed if the terms and conditions of the Agreement are acceptable to both the parties and further subject to receipt of all the requisite regulatory and other approvals, if any.
There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
Your Directors further state that during the year 2018-19, there were no complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Maintenance of Cost Records
The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013.
During the year under review, no revision was made in the financial statement of the Company.
No penalties/strictures were imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to capital market since the listing of the Companys equity shares. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operation in future.
Certain statements in the Directors Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include labour and material availability, and prices, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economic development within India and other incidental factors.
Appreciation and Acknowledgement
The Directors would like to thank all shareholders, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Government of India and other Regulatory Authorities, the BSE Limited, Bankers, Financial Institutions, Members, Customers, contractors, suppliers, associates and Employees of the Company for their continued support and trust. Your Directors would like to express deep appreciation for the commitment shown by the employees in supporting the Company in achieving continued robust performance on all fronts.
|For and on behalf of the Board of Directors,|
|Minesh Modi||Rupa Modi|
|Chairman & Whole Time Director||Whole Time Director & CFO|
|DIN : 00378378||Din No : 00378383|
|August 06, 2019,|