DEAR MEMBERS,
Your director's are pleased to present the 13 th Annual Report of the Company covering the operating and financial performance together with the Audited Standalone Financial Statements and the Auditors' Report thereon for the Financial Year ended on March 31, 2024.
FINANCIAL RESULTS AND OPERATIONS REVIEW:
The financial highlights of the Company during the period ended March 31, 2024 are as below:
(? in Lakhs)
During the year under review on the basis of Financial Statement the Company's revenue from operations during the financial year ended 31st March, 2024 were 1386.34 ?/- (in Lakhs) as against ?4,106.93/-(in Lakhs) of the previous year representing decrease of approximately about 66.24 % over the corresponding period of the current year with total expenses of 1412.94 ?/-(in Lakhs) as against (previous year of ?4,119.32/-(in Lakhs)). The company has made profit before Exceptional Items, Extraordinary Items and Tax Expense of ? 1.44 /-(in Lakhs) as against profit of ?5.70/-(in Lakhs) in the previous year. The Company has made Net Profit of ?0.93/-(in Lakhs) as against ?4.34/-(in Lakhs) of the previous year representing decrease of approximately about 78.57% over the corresponding period of the previous year.
The EPS of the Company for the year 2023-24 is 0.03.
DIVIDEND
The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the company's dividend distribution policy, has decided it would be prudent, not to recommend any Dividend for the year ended on 31st March, 2024and the entire surplus be ploughed back to the business to meet the needs for additional finance for capital expenditure.
TRANSFER TO RESERVES
During the year under review, Company has not transferred any amount to reserves.
SHARE CAPITAL
During the year under review the Company has not made changes in the share capital as on 31st March, 2024.The details of the same are mentioned below:
Authorised Share Capital:
The present Authorized Capital of the Company is ?3,50,00,000 /- divided into 35,00,000 Equity Shares of?10/- each. During the year under review the Company has not made any changes in the share capital of the company i.e. as on 31st March, 2024.
Paid Up Share Capital:
The present paid-up capital of the Company is ?3,15,01,500/- divided into 31,50,150 Equity Shares of ? 10/- each. During the year under review the Company has not made any changes in the share capital of the company i.e. as on 31st March, 2024.
Alteration of Memorandum of Association:
During the year under review the Company has not made any changes in the Memorandum of Association of the company.
Alteration of Articles of Association:
During the year under review the Company has not made any changes in the Articles of Association of the company. STATE OF COMPANY AFFAIRS
During the year under review, company made Total Income of ? 1414.38/-(in Lakhs) as against ?4125.01/-(in Lakhs) in the previous year. The company has made Profit before depreciation, Finance, Costs, Exceptional items and Tax Expense of ?2.44 /-(in Lakhs) as against profit of ?5.70/-(in Lakhs) in the previous year in the financial statement.
The Company made net profit of ? 0.93/- (in Lakhs) as against ?4.34/- (in Lakhs) in the previous year in the financial statement.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
On November 10, 2023, the Company promoters Mr. Vimalkumar Mishrilal Shah and Mr. Hitesh Surendrakumar Loonia has entered into Share Purchase Agreement with Ms. Devi Dineshbhai Pandya, Mr. Dev Dineshbhai Pandya and Mr. Jigar Dineshkumar Pandya (collectively known as Acquirers) for sell/transfer their entire stake in the Company 19,50,000 Equity Shares fully paid-up equity shares of face-value of Rs.10/- each constituting 61.90% of the Equity Share Capital of the Company.
Consequently, an open offer in terms of Regulation 3(1) and Regulation 4 of SEBI (SAST) Regulations, 2011 was made by the Acquirers to acquire upto 26% of the total voting shares of the Company from public shareholders in terms of Letter of offer dated February 06,2024.
Open Offer for the acquisition of 8,20,000 (Eight Lakhs Twenty Thousand) Fully Paid-Up Equity Shares of the face value of Rs. l0/- each, representing 26.03% of the total Equity and voting Share Capital of the Scarnose International Limited (*SIL') by Ms. Devi Dineshbhai Pandya ("Acquirer No. 1"), Mr. Dev Dineshbhai Pandya (Acquirer No. 2), and Mr. Jigar Dineshkumar Pandya (Acquirer No. 3) pursuant to and in compliance with Regulation 3 & 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,2011.
LISTING WITH STOCK EXCHANGE
The Company has paid requisite annual listing fees to BSE Limited (BSE) where its securities are listed.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the Section 124 applicable provisions of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all the unpaid or unclaimed dividends are required to be transferred to the IEPF established by the Central Government, upon completion of seven (7) years.
Further, according to the Investor Education & Protection Fund ("IEPF") Rules, the shares in respect of which dividend has not been paid or claimed by the Shareholders for seven (7) consecutive years or more shall also be transferred to the demat account created by the IEPF Authority.
Your Company does not have any unpaid or unclaimed dividend or shares relating thereto which is required to be transferred to the IEPF as on the date of this Report.
DEPOSITS
During the year under review, the Company has neither invited nor accepted any deposits from the public under Section 76 and Chapter V of the Companies Act, 2013 and rules made thereunder.
SUBSIDIARY, JOINT VENTURE (JV) AND ASSOCIATES COMPANIES
The Company does not have any Subsidiary, Joint venture or Associate Company in terms of Companies Act, 2013. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNELS Appointment/ Re-Appointment
During the year under review following Directors were appointed as follows:
Cessation
During the year under review following Directors were resigned which are mentioned below:
Retire by Rotation
As per the provisions of Section 152 of the Companies Act, 2013, Ms. Maharshi Jigar Pandya (DIN: 09621936)
is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re- appointment.
Your Directors recommended her re-appointment on recommendation made by the Nomination and Remuneration Committee.
Independent Directors
Ms. Drashtiben Prafulbhai Dedaniya (DIN: 10219807) holds office as a Non-Executive Independent Director of the Company with effect from 26th March, 2024 for the period of 5 years who is not liable for retire by rotation.
Mr. Kunjal Jayantkumar Soni (DIN: 08160838) holds office as a Non-Executive Independent Director of the Company with effect from 06th May,2021for the period of 5 years who is not liable for retire by rotation.
APPOINTMENT AND RESIGNATION OF KEY MANAGERIAL PERSONNEL
During the year under review Ms. Ankit Vivekumar Shah was resigned as Company Secretary and Compliance Officer w.e.f 12th January, 2024 and Ms. Sanjana Parmar was resigned as CFO w.e.f 29th March,2024.
The Key Managerial Perssonel as on 31st March,2024:
Further Ms. Heli Jitendrabhai Modi has been appointed as Company secretary as well as Compliance officer with effect from 01st May 2024.
DECLARATIONS OF INDEPENDENT DIRECTORS
The Company has received declarations pursuant to Section 149(7) of the Companies Act, 2013 from each of its Non-Executive and Independent Directors to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013, Regulation 16(1)(b) and Regulation 25 of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "Listing Regulations"). These declarations have been placed before and noted by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors to the best of its knowledge and ability, confirm that:
(a) In the preparation of the annual accounts for the financial year ended on March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(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 at the end of the financial year March 31, 2024and of the profit of the Company for that period;
(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, 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 that such internal financial controls are adequate and were operating effectively; and
(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.
COMPOSITION OF BOARD AND VARIOUS COMMITTEES AND THEIR MEETINGS
The Board of Directors along with its Committees provide leadership and guidance to the Management and directs and supervises the performance of the Company, thereby enhancing stakeholder value.
BOARD OF DIRECTORS:
The Board has a fiduciary relationship in ensuring that the rights of all stakeholders are protected. The Board of Scarnose International Limited comprises of Executive (Whole-Time) and Non-Executive Directors. Independent Directors are eminent persons with proven record in diverse areas like business, accounting, marketing, technology, finance, economics, administration, etc. The composition of Board of Directors represents optimal mix of professionalism, qualification, knowledge, skill sets, track record, integrity, expertise and diversity. The Board of Directors as on March 31, 2024, comprised of 5 Directors, out of which 1was Executive Director ("ED") (MD & Chairman), and 1 were Executive Director ("ED") and 1 were Non-Executive Directors ("NEDs") and 2 Independent Directors ("IDs"). Detailed profile of our Directors is available on our website at www.scarnose.com.
Composition of Board:
*Mr. Dev Dineshbhai Pandya (Additional Executive Director), Ms. Drashtiben Prafulbhai Dedaniya (Additional Independent Non-Executive Director) and Mr. Jigar Dineshkumar Pandya (Additional Non- Executive Director) appointed by Board of Directors on 26th March, 2024.
Mr. Hemal Patel (Independent Non-Executive Director) and Ms. Dakshita Dadhich (Non-Executive Director) has resigned from the Board w.e.f. 29th March, 2024.
Board Meetings:
The Board of Directors duly met 8times at regular intervals during the mentioned financial year and in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. The intervening gap between the two meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations. The dates on which meetings were held are as follows:
Name of the Directors
Date of Meeting
Vimalkumar Shah
Kunjal Soni
Hemal Patel
Dakshita Dadich
Independent Directors Meetings:
In terms of the provisions of the Schedule IV of the Companies Act, 2013 and Regulation 25 (3) of the Listing Regulations, the Independent Directors of the Company shall meet at least once in a year, without the presence of Executive Directors and members of Management. During the financial year, the Meetings of Independent Directors was held in following manner:
AUDIT COMMITTEE:
The Audit Committee has been constituted by the Board in compliance with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations. The board of directors has entrusted the Audit Committee with the responsibility to supervise these processes and ensure accurate and timely disclosures that maintain the transparency, integrity and quality of financial control and reporting.
The Company Secretary acts as the Secretary to the Committee. The internal auditor reports functionally to the Audit Committee. The Chief Financial Officer of the Company also attends the meetings as invitee.
However the Audit Committee was reconstituted with effective from 02nd April, 2024 which are mentioned below: Changed Composition of Audit Committee:
Audit Committee Meeting:
In terms of the provisions of the Regulation 18(2)(a) of the Listing Regulations, the Audit Committee of the Company shall meet at least four times in a year and in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. During the financial year, the Meetings of Audit committee was held in following manner:
Mr. Hemal Patel
Mr. Vimalkumar Shah
Meetings attended during the 04/04
year
Financial Reporting and Related Processes:
? Oversight of the Company‘s financial reporting process and financial information submitted to the Stock Exchanges, regulatory authorities or the public.
? Reviewing with the Management, Audited Annual Financial Statements and Auditor's Report thereon before submission to the Board for approval. This would, inter alia, include reviewing changes in the accounting policies and reasons for the same, major accounting estimates based on exercise of judgment by the Management, significant adjustments made in the Financial Statements and / or recommendation, if any, made by the Statutory Auditors in this regard.
? Review the Management Discussion & Analysis of financial and operational performance.
? Discuss with the Statutory Auditors its judgment about the quality and appropriateness of the Company‘s accounting principles with reference to the Accounting Standard (AS).
All the Members of the Audit Committee have the requisite qualification for appointment on the Committee and possess sound knowledge of finance, accounting practices and internal controls.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee (NRC) consist majority of Independent Directors. The Nomination and Remuneration Committee has been constituted by the Board in compliance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations. The board of directors has entrusted the Nomination and Remuneration Committee with the responsibility to formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel.
However the Nomination and Remuneration Committee was reconstituted with effective from 02nd April, 2024 which are mentioned below:
Changed Composition of Nomination and Remuneration Committee:
Nomination and Remuneration Committee Meeting:
In terms of the provisions of the Regulation 19 (3A) of the Listing Regulations, the Nomination and Remuneration Committee of the Company shall meet at least once in a year and in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. During the financial year, the Meetings of Nomination and Remuneration Committee was held in following manner:
Name of Director
Mr. Kunjal Jayantkumar Soni
Ms. Hemal Patel
Ms. Dakshita Dadhich
The terms of reference of the Committee inter alia, include the following:
? Succession planning of the Board of Directors and Senior Management Employees;
? Identifying and selection of candidates for appointment as Directors / Independent Directors based on certain laid down criteria;
? Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions;
? Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and senior management employees and their remuneration;
? Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board.
STAKEHOLDER'S RELATIONSHIP COMMITTEE:
The Stakeholders' Relationship Committee ("SRC") considers and resolves the grievances of our shareholders, including complaints relating to non-receipt of annual report, transfer and transmission of securities, non-receipt of dividends/interests and such other grievances as may be raised by the security holders from time to time.
No.
However the Stakeholders' Relationship Committee was reconstituted with effective from 02nd April, 2024 which are mentioned below:
Changed Composition of Stakeholders' Relationship Committee:
Stakeholders' Relationship Committee Meeting:
In terms of the provisions of the Regulation 20 (3A) of the Listing Regulations, the Stakeholders' Relationship Committee of the Company shall meet at least once in a year and in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. During the financial year, the Meetings of Stakeholders' Relationship Committee was held in following manner:
Mr.
KunjalJayantkumarSo
ni
05/07/2023
Yes
The terms of reference of the Committee are:
? Transfer/transmission of shares/debentures and such other securities as may be issued by the Company from time to time;
? Issue of duplicate share certificates for shares/debentures and other securities reported lost, defaced or destroyed, as per the laid down procedure;
? Issue new certificates against subdivision of shares, renewal, split or consolidation of share certificates / certificates relating to other securities;
? To approve and monitor dematerialization of shares / debentures / other securities and all matters incidental or related thereto;
? To authorize the Company Secretary and Head Compliance / other Officers of the Share Department to attend to matters relating to non-receipt of annual reports, notices, non-receipt of declared dividend / interest, change of address for correspondence etc. and to monitor action taken;
? Monitoring expeditious redressal of investors / stakeholders grievances;
? All other matters incidental or related to shares, debenture.
During the year, the Company has given disclosure for Investor Complaints of last two quarters on Stock Exchange and no complaints were received from shareholders. There are no balance complaints. The Company had no share transfers pending as on March 31, 2024.
Heli Jitendrabhai Modi, Company Secretary of the Company is the Compliance Officer.
DETAILS OF FRAUD REPORTING BY AUDITOR
During the year under review, there were no frauds reported by the auditors to the Board under section 143(12) of the Companies Act, 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has formed Nomination and Remuneration Committee in terms of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations which has framed Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other Employees which sets out criteria for the remuneration of Directors, Key Managerial Personal (‘KMP') and other employees so as to attract, retain and reward talent who will contribute to our long-term success and thereby build value for the shareholders. The Committee reviews and recommend to the Board of Directors about remuneration for Directors and Key Managerial Personnel and other employee up to one level below of Key Managerial Personnel. The Company does not pay any remuneration to the Non-Executive Directors of the Company other than sitting fee for attending the Meetings of the Board of Directors and Committees of the Board. Remuneration to Executive Directors is governed under the relevant provisions of the Act and approvals.
The Company has devised the Nomination and Remuneration Policy for the appointment, re-appointment and remuneration of Directors, Key Managerial. The Nomination and Remuneration Policy is also available on the website of the Company www.scarnose.com /in the head of Policies.
For Board of Directors and Senior Management Group, the Board of Directors of the Company has laid down a code of conduct for all the Board Members and Senior Management Group of the Company. The main object of the Code is to set a benchmark for the Company's commitment to values and ethical business conduct and practices. Its purpose is to conduct the business of the Company in accordance with its value systems, fair and ethical practices, applicable laws, rules and regulations. Further, the Code provides for the highest standard of professional integrity while discharging the duties and to promote and demonstrate professionalism in the Company.
All the Board Members and Senior Management Group of the Company have affirmed compliance with the code of conduct for the financial year ended on March 31, 2024 as required by Regulation 26(3) of the Listing Regulations. A declaration signed by the Chairman & Managing Director to this effect is attached as a part of this Annual Report. The code of conduct is also available on the website of the Company www.scarnose.com.
FOR PREVENTION OF INSIDER TRADING
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 came into effect from May 15, 2015 to put in place a framework for prohibition of insider trading in securities and to strengthen the legal framework thereof. Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated and adopted
? Code of Practices for Prevention of Insider Trading and
? Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Code of Fair Disclosure") of the Company.
The Code of Practices for Prevention of Insider Trading and Procedures for Fair Disclosure of Unpublished Price Sensitive Information is available on the website of the Company www.scarnose.com
Further, pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated and adopted the Code of Conduct for Prevention of Insider Trading. The Code lays down guidelines and procedures to be followed and disclosures to be made while dealing with the shares of the Company and cautioning them on the consequence of non-compliances. The Company Secretary has been appointed as a Compliance Officer and is responsible for monitoring adherence to the Code. The code of conduct to regulate, monitor and report trading by insiders is also available on the website of the Company www.scarnose.com
VIGIL MECHANISM
The Company has established a Vigil Mechanism/ Whistle-blower policy in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. The Company is committed to principles of professional integrity and ethical behavior in the conduct of its affairs. The Whistle-blower Policy provides for adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committeeto report actual or suspected unethical behavior, fraud or violation of the Company's Code of Conduct/ ethics/ principles and matters specified in the Policy.
The Company affirms that in compliance with the Whistle-Blower Policy/ Vigil Mechanism no personnel has been denied access to the Audit Committee. The Compliance officer and Audit Committee is mandated to receive the complaints under this policy. The Board on a yearly basis is presented an update on the whistleblower policy. Whistle Blower policy is available on the website of the Company at www.scarnose.comThe Policy ensures complete protection to the whistle-blower and follows a zero tolerance approach to retaliation or unfair treatment against the whistle-blower and all others who report any concern under this Policy.
During the year under review, the Company did not receive any complaint of any fraud, misfeasance etc. The Company's WhistleBlower Policy (Vigil Mechanism) has also been amended to make employees aware of the existence of policies and procedures for inquiry in case of leakage of Unpublished Price Sensitive Information to enable them to report on leakages, if any of such information.
BOARD EVALUATION
Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination and Remuneration Committee, has formulated a framework containing, inter alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual directors, including Independent Directors. The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors.
The Board sought the feedback of Directors on various parameters including:
? Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.);
? Structure, composition, and role clarity of the Board and Committees;
? Extent of co-ordination and cohesiveness between the Board and its Committees;
? Effectiveness of the deliberations and process management;
? Board/Committee culture and dynamics; and
? Quality of relationship between Board Members and the Management.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.
In the Board meeting that followed the meeting of the independent directors and the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was discussed.
The evaluation process endorsed the Board Members' confidence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management, and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties.
The Board carried out an annual performance evaluation of its own performance and that of its committees and individual directors as per the formal mechanism for such evaluation adopted by the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee.
The performance evaluation of the Chairman, the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The exercise of performance evaluation was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board by way of individual feedback from directors.
The evaluation frameworks were the following key areas:
1. For Non-Executive & Independent Directors:
? Knowledge
? Professional Conduct
? Comply Secretarial Standard issued by ICSI Duties,
? Role and functions
2. For Executive Directors:
? Performance as leader
? Evaluating Business Opportunity and analysis of Risk Reward Scenarios
? Key set investment goal
? Professional conduct and integrity
? Sharing of information with Board.
? Adherence applicable government law
RISK MANAGEMENT POLICY
The Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing/mitigating the same.
The Company has framed a formal Risk Management Policy for risk assessment and risk minimization which is periodically reviewed to ensure smooth operation and effective management control which is also available on our website www.scarnose.com.The Audit Committee also reviews the adequacy of the risk management framework of the Company, the key risks associated with the business and measure and steps in place to minimize the same.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company provides equal opportunities and is committed to creating a healthy working environment that enables our Minds to work with equality and without fear of discrimination, prejudice, gender bias or any form of harassment at work place. Your Company has in place Prevention of Sexual Harassment (POSH) policy in accordance with the requirements of the Sexual Harassment of Women at WorkPlace (Prevention, Prohibition and Redressal) Act, 2013 which is also available on our website www.scarnose.com
AUDITORS
STATUTORY AUDITORS:
In the 12thAnnual General Meeting (AGM) held on 18th September, 2023 M/s. S V J K& Associates, Chartered Accountants (Firm Registration Number 135182W), were appointed as statutory auditors of the Company to hold office for a term of 5 (five) consecutive years until the conclusion of the Annual General Meeting of the Company to be held in the year 2028. M/s S V J K& Associates, Chartered Accountants (Firm Registration Number 135182W), has resigned as Statutory Auditors of the Company with effect from 22nd May,2024, due to recent changes in the Management.
The Auditors ' Report for the financial year ended on March 31, 2024 have been provided in "Financial Statements" forming part of this Annual Report.
The report of the Statutory Auditor does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditor's Report are self-explanatory and therefore do not call for any further comments.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. Prachi Bansal and Associates, Practicing Company Secretaries as Secretarial Auditor of the Company for the financial year ended on March 31, 2024. The Secretarial Audit Report in Form MR-3 for the financial year ended on March 31, 2024is attached as Annexure -II to the Directors' Report and forming part of this Annual Report.
The report of the Secretarial auditor have not made any adverse remark in their Audit Report except:
a) The Company has not complied with requirement of SDD as per Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
Reply: We acknowledge the concern regarding the Company's non-compliance with the requirement SDD as per Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and but we are maintain internal System segregate UPSI data from other data along with the Password Requirement.
b) The Company has not appointed Company Secretary as per the requirement under Regulation 6(1A) of SEBI (LODR) Regulations after the resignation of company secretary from 12th January, 2024.
Reply:The Company has appointed Company Secretary Ms.Heli Jitendrabhai Modi on 01st May,2024 and has complied the same.
c) The Company has given the disclosure under Regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended on 30th September, 2023 to the stock exchange beyond 30 days from the end of the Quarter.
Reply: We regret the delay in submitting the disclosure under Regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018, for the quarter ended 30th September, 2023 but we have submitted the required disclosure to the stock exchange to upload the transparency and accountability.
d) The Company has given the disclosure under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended on 30th September, 2023 to the stock exchange beyond 15 days from the end of the Quarter.
Reply: We regret the delay in submitting the disclosure under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018, for the quarter ended 30th September, 2023 but we have submitted the required disclosure to the stock exchange to uphold the transparency and accountability.
e) The Company has given the disclosure under Regulation 3(5) and 3(6) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 for the quarter ended on 30th September, 2023 to the stock exchange beyond 21 days from the end of the Quarter.
Reply: We regret the delay in submitting the disclosure under Regulation 3(5) and 3(6) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, for the quarter ended 30th September, 2023 but we have submitted the required disclosure to the stock exchange to uphold the transparency and accountability.
f) The Company has not make disclosure of under Regulation 3(5) and 3(6) of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 for the quarter ended on 31st December, 2023.
Reply: We regret the delay in submitting the disclosure under Regulation 3(5) and 3(6) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, for the quarter ended 31st December, 2023 but we have submitted the required disclosure to the stock exchange to uphold the transparency and accountability.
g) The Company has not filed XML of Prior Intimation of the notice of the Board Meeting held on 08th November, 2023 to the stock exchange.
Reply: We regret that the XML file of Prior Intimation for the notice of the Board Meeting held on 8th November, 2023, was not filed with the stock exchange as required and but we will assure that XML file will be submitted and make sure that it will not happen in future.
h) The Company has not filed XML of Annual Report of the AGM held on 18th September, 2023 to the stock exchange.
Reply: We regret that the XML file of Annual Report of the AGM held on 18th September, 2023 was not filed with the stock exchange as required but we will assure that XML file will be submitted and make sure that it will not happen in future.
DIRECTORS' RESPONSE ON AUDITORS' QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMER MADE
There is a no qualification or Disclaimer of Opinion in the Auditor's Report on the Financial Statements to the shareholders of the Company made by the Statutory Auditors in their Auditors.
SECRETARIAL STANDARDS
The Company has devised proper systems to ensure compliance with Secretarial standards and its provisions and is in compliance with the same.
ANNUAL RETURN
In accordance with Sections 134(3)(a) & 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, The annual return in Form No.MGT-7 for the financial year 2023- 24 will be available on the website of the Company (www.scarnose.com). The due date for filing annual return for the financial year 2023-24 is within a period of sixty days from the date of annual general meeting. Accordingly, the Company shall file the same with the Ministry of Corporate Affairs within prescribed time and a copy of the same shall be made available on the website of the Company (www.scarnose.com) as is required in terms of Section 92(3) of the Companies Act, 2013.
CORPORATE GOVERNANCE REPORT
As per the Regulation 15 (Listing Obligations and Disclosure Requirements) Regulations, 2015 applicability of Corporate Governance shall not be mandatory for companies having listed on SME Platform. Since our company has registered on SME platform the requirement of the Corporate Governance has not applicable to us.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as required under Regulation 34(2)(e) read with Schedule V Part B of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015") is annexed herewith as Annexure I.
PARTICULARS OF LOANS, GUARANTEE OR INVESTMENT UNDER SECTION 186 OF COMPANIES ACT, 2013
Particulars of Investment and Loans given by the Company, during the year under review are as mentioned in the Notes 11 and 12 forming part of the Financial Statements. The Company has not given any guarantee and provided security under Section 186 of the Companies Act, 2013 during the year under review.
LOANS FROM DIRECTOR/ RELATIVE OF DIRECTOR
The balances of monies accepted by the Company from Directors/ relatives of Directors at the beginning of the year were ?0.32 /- (in Lakhs) and at the close of year were Nil.
The Funds has been given out of Directors own Funds and is not being given out of funds acquired by borrowing from others.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions that were entered during the financial year ended on 31stMarch, 2024were on an arm's length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act. There were Related Party Transactions made by the Company during the year that required shareholders' approval.
The Company has entered into related party transactions which fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section134(3)(h) of the Act in Form AOC 2 are given in Annexure III of this Director Report for the F.Y 2023-24.
Details of other related party transactions have been included in Point 28 of Significant Account Policies to the standalone financial statements.
The Policy on the Related Party Transactions is available on the Company's website at www.scarnose.com INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has laid down the set of standards, processes and structure which enables to implement internal financial control across the Organization and ensure that the same are adequate and operating effectively. To maintain the objectivity and independence of Internal Audit, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies of the Company. Based on the report of Internal Auditor, the Company undertake the corrective action in their respective areas and thereby strengthen the Control. Significant audit observation and corrective actions thereon are presented to the Audit Committee of the Board.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows:
1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the financial year:
2. The percentage increase in the median remuneration of employees in the financial year: The median remuneration of the employees in current financial year was decrease by 2.80% over the previous financial year.
3. The number of permanent employees on the rolls of Company: 2
4. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
5. The Average 32.03% decrease was made in salary of employees. The remuneration paid to executive directors were within the limit as per approved by the shareholders of the Company.
6. Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms that the remuneration is as per the remuneration policy of the Company.
The statement containing names of top five employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable to the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the provisions of Section 134(3)(m) of the Companies Act,2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 the relevant data pertaining to conservation of Energy, Technology Absorption, Foreign exchange earnings is attached with Annexure IV.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS
During the year under review, there were no significant and/or material orders passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Company's operations in future.
INDUSTRIAL RELATIONS
The Directors are pleased to report that the relations between the employees and the management continued to remain cordial during the year under review.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations read with notification SEBI/LAD-NRO/GN/2015-16/27 dated December 22, 2015, the Business Responsibility Report is to be given only by top 500 listed companies based on market capitalization, therefore the same is not applicable to the Company as on March 31, 2024.
MAINENTANCE OF COST RECORD
The provisions relating to maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, are not applicable to the Company and accordingly such accounts and records are not required to be maintained.
DEMATERIALISATION
The Demat activation number allotted to the Company is ISIN INE0IXR01019 . The company is holding its shares in dematerialized form only.
INSOLVENCY AND BANKRUPTCY CODE
There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.
ACKNOWLEDGMENTS
The Board of Directors greatly appreciates the commitment and dedication of employees at all levels who have contributed to the growth and success of the Company. We also thank all our clients, vendors, investors, bankers and other business associates for their continued support and encouragement during the year.
We also thank the Government of India, Government of Gujarat, Ministry of Commerce and Industry, Ministry of Finance, Customs and Excise Departments, Income Tax Department and all other Government Agencies for their support during the year and look forward to their continued support in future.