Report of the Board of Directors To Dear Members, Your Directors have pleasure in presenting the Forty Second Annual Report together with the Audited Financial Statements of the Company. Financial Highlights The Board thanked to the members who has poised their trust on the Company and presents the gist of the Financials. During the year Company managed to increase its total turnover to 984.56 Lacs as compared to 249.91 Lacs as compared to previous year, by registering 294% hike. The Company has incurred the loss of 99.66 Lacs as compare to 31.18 Lacs in previous year. Despite of increased turnover the company has incurred loss mainly due to violate market condition, slack capital market platform, devaluation of stock and increase in administrative expenses. However the management of the Company making every efforts and taking every steps to turn the Company in to profitable organization. The Management of the Company is very optimistic regarding performance of the Company in future. Dividend In view of losses during the year, your Directors have not recommended any dividend on Equity Shares for the year under review. Changes in Directors And Key Managerial Personnel During the period under review, Directors, Mrs. Sheetal Shah, Mr. Hetal Kumar Shah and Mr. Naresh Gurav had resigned from the Board with effect from 28th November, 2014 .The Board places on record their appreciation and gratitude for their guidance and contribution during their association with the Company. On the recommendation of Nomination and Remuneration Committee, your Board inducted Mr. Praful Solanki and Mrs. Sonal Virani as an Additional Director of the Company in the category of Independent Director with effect from 28th November, 2014 in order to comply with the requirement of Section 149(1) of the Companies Act, 2013. In terms of Section 161 of the Companies Act, 2013 both will hold office up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing along with deposit pursuant to Section 160 of Companies Act, 2013, proposing the appointment of Mr. Praful Solanki and Mrs. Sonal Virani as Director of the Company. Your Board has recommended the appointment of Mr. Praful Solanki and Mrs. Sonal Virani as Independent Director not liable to retire by rotation for a period of five consecutive years up to the fifth consecutive Annual General Meeting of the Company. During the year Pursuant to Section 152 of the Companies Act, 2013 and in terms of Article 121A of the Articles of Association of the Company, Mr. Dheeraj shah, Managing Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Your Board has recommended his re-appointment. In Compliance with requirements of Clause 49 VIII (E) of Listing Agreement, brief resume, expertise and details of other directorships, membership in committees of other companies and shareholding in the Company of persons proposed to be appointed / re-appointed as Directors are as under: Public Deposits The Company has not accepted any public deposits during the year under review. Director's Responsibility Statement As required by Section 134 (5) of the Companies Act, 2013, based on the information and representations received from the operating management, your Directors confirm that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with the 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 loss of the Company for that period; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of 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 were operating effectively; 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. Independent Director's Declaration The Independent Directors of the Company, viz. Mr. Praful Solanki and Mrs. Sonal Virani have filed their declarations with the Company at the beginning of the financial year 2015-16 affirming that they continue to meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013 in respect of their position as an Independent Director of Gromo trade & Consultancy Limited. Auditors Statutory Auditors - M/S. R. Soni & Co., Chartered Accountants statutory auditors of the Company retire at the ensuring Annual General Meeting and, being eligible, offer themselves for re-appointment. Hence, the Audit Committee and the Board hereby recommends the re-appointment of M/S. R. Soni & Co. Chartered Accountants (Registration No. 130349W), as Statutory Auditors of the Company for a period of five years i.e., fromthe conclusion of the 42nd Annual General Meeting up to the conclusion of 47th Annual General Meeting subject to ratification by Members every year. Further, your Company has received a written consent and a certificate from M/S. R. Soni & Co, Chartered Accountants to the effect that their appointment, if made, would satisfy the criteria provided in sections 139 and 141 of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014. • Internal Auditors - The Company did not appoint any Internal Auditor for the period under review. The Company proposes to get the Internal Audit done in the current year and shall make the necessary disclosures in the next Annual Report. • Secretarial Auditor - During the year under review, M/s P.D. Pandya & Associates., Practicing Company Secretaries, carried out secretarial audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report which forms a part of the Annual Report as Annexure A. Auditors Report The Notes on Account referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further explanations or comments. There are no qualifications, reservations or adverse remarks or disclaimer made in the Auditors' Report which requires any clarification or explanation However emphasis on some matter was given explanation for the same is given here below. M/s. P.D. Pandya and Associates, Company Secretary in Practice, in his Secretarial Audit Report for financial year 2014-15 have drawn the attention of the management on some the non-compliances, which have been marked as qualification in his report. In connection with the same management herewith give the explanation for the same as follow: The Company is looking for, and tried to appoint the Company Secretary but did not found the desired candidate as per company's requirement. However the management is of view that though the Company does not have any Company Secretary on role of the Company as on date. The Company is highly Compliance Company and always believe in high Corporate Governance, The Company is regular in making all required notices, disclosures, announcements, Compliances, filing with the Exchanges, ROC, Income Tax and other concerned Authorities. The Company for that purpose out sourced the Secretarial work to the Professional Company Secretaries Firm. However Company is still looking for the Company Secretary who can easily cope up with Company's requirements. The Management ensures that the same has been complied as soon as possible. As far as the appointment of Internal Auditor and Internal Control is concerned, The Management of the Company is of a view that the Company's size is very small as compared to its peer group companies, the Company has already in place Risk Management Policy to cope up with unforeseeable threats, risks and frauds. The management thinks that Company has adequate Internal Control System commensurate with the size of the Company and the Statutory Auditor also conduct test audit on quarterly basis and submit the limited review certificate and draws the attention of the management on concerned matters. However the Management also ensures to strengthen the Internal Control System of the Company. However to make good of said default Company has appointed M/s. A M Gohel & Co., as Internal Auditor of the Company in current financial year for conducting periodic internal audit in compliance of Section 138 of Companies Act, 2013. It's a matter of fact that the SEBI vide its Ex-parte interim order dated February 26, 2015 debarred the Company, its Directors and other suspected entity from accessing the Capital Market till further orders and also suspended the trading in the shares of the Company on BSE. The SEBI had passed said order upon detection of insignificant price hike of the shares of the Company and found the company responsible for that. The SEBI passed said order to protect the interests of the investors, however by suspending the trading SEBI has snatched the easy entry exit platform available to the members and public. The management of the Company thinks that order passed by SEBI was ex-parte, ruthless and baseless, against the fundamental right of being heard, the SEBI cannot debar the Company and its Directors from accessing Capital Market and suspend the Company, just only because of insignificant rise in price of the shares of the Company. The price of the shares is market driven and depends on the sentiments of the shareholders of the company. The company has nothing to do with this nor can control the same. However the Company in the interest of its member has already filed its reply to SEBI for revocation of suspension. As the members of the Company aware of the fact that the fund, which has been raised by the Company through private placement in current and previous financial year was for meeting requirements for capital expenditure including acquisition of companies / business, funding long term working capital requirements, marketing setting up of offices abroad and other approved corporate purposes i.e. giving Short term loan, advances and making of investment and same had been approved by the members of the Company. Since the Company was incorporated with the main object of doing Finance business, it cannot be said, that the fund raised was utilized for other business objects. Share Capital The Company in order to enable itself to issue equity shares on preferential basis, increased its Authorised Share Capital from '25.25 Crores to '33.25 Crores for which Company has taken the approval of its members at its Annual general meeting held on 14th June, 2014. Preferential Allotment Pursuant to provisions of Section 42 of the Companies Act, 2013 the Company has allotted 52,00,000 Equity Shares of Rs.10/- each of the Company to promoters and non-promoters on preferential basis at Rs of Rs.25/- each (Including premium of Rs 15/- each) on June 24, 2014, for which Company has taken the approval of its members at its Annual general meeting held on 14th June, 2014 Shifting of Registered Office of the Company During the year Registered office of the Company shifted from 306, Dalamal Chambers, Behind Aayakar Bhavan, New Marine Lines, Mumbai-400020 to B/411, Crystal Plaza, New Link Road, opp. to Infinity mall, Andheri (west), Mumbai-400053 w.e.f. 15th May, 2014 for avail better infrastructure and good ambiance. Change in Main Object of the Company As the members of the Company know that the Company was originally incorporate with the main object of doing business of Finance and related activities. However Company does not hold valid Certificate of Registration from RBI under Section 45IA of Reserve Bank of India Act, 1949. To make good of said default Company diversified its business line from Finance to Consultancy and Trade. During the year under review manage to generate more than 50% revenue otherwise that finance business i.e. from sale of fabric and textile. The members of the Company had accorded their assent for the same through Postal Ballot on 24th March, 2015. Change of name of the Company Since the management had diversified its business from Finance to Trade and Consultancy business. The Board of Directors of the Company in order to ensure that the name of the Company adequately reflects the business being carried on by the Company; proposed change in the name of the Company from M/s. Kamalakshi Finance Corporation Limited to M/s. Gromo Trade & Consultancy Limited and taken the approval of the members of the Company through Postal Ballot. However said change I name does not affect the status of the Company. Interim Order Passed by SEBI During the year under review the Securities and Exchange Board of India vide its ex-parte interim order dated February 26, 2015 debarred the company and its Directors from accessing the Capital Market till further order received from SEBI due pursuant to detection of huge rise in the price of the Company's Shares. Also, the trading in the shares of the company on BSE was suspended. However the management of the view that the order passed by SEBI was ex-parte, ruthless and baseless against the fundamental right of being heard, and snatched the free and easy exit point available to the members of the Company. The management of the Company thinks that the SEBI cannot debar Company and its Director from accessing Capital Market just only because of insignificant rise in share price of the Company. The price of the shares is market driven and depends on the sentiments of the shareholders of the company. The company has nothing to do with this nor can control the same. However the Company in the interest of its member has already filed its reply to SEBI for revocation of suspension. Policies on Directors' Appointment and Remuneration: The policies of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act is appended as Annexure B. Evaluation of Board Of Directors: Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee of the Board carried out the annual evaluation of the performance of the Board as a whole, the Directors individually as well as of various Committees of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and nonindependent Directors was also carried out by the Independent Directors at their seperate meeting. The Directors expressed their satisfaction with the evaluation process. Particulars of Contracts or Arrangements with Related Parties: The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 are appended as Annexure C. Extract of Annual Return: Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is given in the Report as Annexure D. [ Vigil Mechanism/ Whistle Blower Policy The Company has established a Vigil Mechanism/ Whistleblower Policy for the employees to report their genuine concerns or grievances and the same has been uploaded on the website of the Company at www.kamalakshifinance.com . Sexual Harassment Policy In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under, the Company formulated an internal Policy on Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) during the year under review. The policy aims at educating employees on conduct that constitutes sexual harassment, ways and means to prevent occurrence of any such incident, and the mechanism for dealing with such incident in the unlikely event of its occurrence. The same has been uploaded on the website of the Company at www.kamalakshifinance.com . Risk Management_ Gromo Trade & Consultancy Limited follows well-established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization's objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. For the same company has created Risk Management policy and uploaded the same on the web site of the company at www.kamalakshifinance.com . Corporate Governance: It has been the endeavor of your Company to follow and implement best practices in Corporate Governance, in letter and spirit. A detailed Corporate Governance Report is attached and forms part of this report. A certificate from the Statutory Auditors of the Company regarding compliance of the conditions of corporate governance as required under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this report. Further, the company regularly submits the quarterly corporate governance compliance report to the BSE and also uploads the same on its website. Conservation Of Energy and Technology Absorption The particulars under the companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, on conservation of energy and Technology absorption is not applicable Particulars of Employees and Related Information: In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are provided in the Annual Report. The disclosures as specified under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been appended to this Report as Annexure V. Foreign Exchange There is no inflow and outflow of Foreign Exchange during the year under review. Listing of Shares Equity shares of your Company are listed on Bombay Stock Exchange only and the Company has paid the necessary Listing fees for the year 2015 - 2016. However, the trading in equity Shares of the Company has been suspended from BSE since 26th February, 2015 vide order no. WTM/RKA/ ISD/ 09/2015 Particulars of Loans, Guarantees Or Investments The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. Postal Ballot During the year under review, the Company has carried out Postal Ballot on 24th March, 2015, details of the items on which the approval of member through Postal ballot sought are given in Corporate Governance Report attached to the Report. Green Initiative In Corporate Governance The Ministry of Corporate Affairs (vide circular nos.17/2011 and 18/2011 dated April 21 and April 29, 2011 respectively), has undertaken 'Green initiative in corporate Governance' and allowed companies to share documents with its shareholders through an electronic mode. Members are requested to support their green initiative by registering/updating their email addresses, in respect of shares held in dematerialized form with their respective depository participants and in respect of shares held in physical form with Companies RTA. Appreciation and Acknowledgement Your Directors would like to express their appreciation for the assistance and co-operation received from the Government authorities, banks, customers, business associates and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company. For and on behalf of the Board of Directors Sd/- Dheeraj Babulal Shah (Managing Director) Sd/- Praful Solanki (Director) Place: Mumbai Date: 12th August, 2015 |