Your Directors have pleasure in presenting the 31st ANNUAL REPORT on the business andoperations of your company and the Audited Financial Statements together with the AuditorsReport for the year ended 31st March 2017.
1. FINANCIAL HIGHLIGHTS
The Financial Results for the year ended 31st March 2017.
Rupees in lacs
| ||STANDALONE ||CONSOLIDATED |
| ||31/03/2017 ||31/03/2016 ||31/03/2017 ||31/03/2016 |
|Profit/(Loss) from capital market operations ||185.32 ||284.29 ||900.60 ||(637.14) |
|Other income ||24.21 ||4.23 ||70.66 ||24.46 |
|Profit/(Loss) before depreciation & tax ||(6.41) ||103.36 ||741.09 ||(838.97) |
|Interest ||0.00 ||0.00 ||0.00 ||0.00 |
|Depreciation ||37.72 ||64.19 ||37.72 ||74.26 |
|Profit/(Loss) before tax ||(44.13) ||39.17 ||703.37 ||(635.19) |
|Provision for tax ||0 ||20.00 ||145.00 ||20.00 |
|Tax for earlier years ||0 ||0.76 ||0.00 ||31.89 |
|Deferred tax ||(5.20) ||(10.20) ||(5.20) ||7.55 |
|Profit/(Loss) after tax ||(38.93) ||28.61 ||563.57 ||(694.63) |
2. BUSINESS & PERFORMANCE
During the year under review the Company has made a loss of Rs.38.93 lacs againstprofit of Rs.28.61 lacs in the last financial year. Our company had shifted the focus toconcentrate on core business of investments. The Company will make improved profitsdepending on the Indian Equity market conditions and the global environment.
In the year 2012-13 the erstwhile ManagingDirector had cancelled Demand Draftsaggregating to Rs. 61.20 lac drawn in favour of Gujarat Industrial Investment CorporationLimited (GIIC) by the Company for settlement of a claim raised by GIIC Limited withoutthe necessary approval of the Board of Directors of the Company and appeared to havemisappropriated these funds. On discovering the same subsequently based on the advicegiven by its legal counsel the Company filed a police compliant on 30th October 2014 atthe R.A.KidwaiMarg Police Station Mumbai to investigate the matter in detail. Theinvestigation was carried out by the Police officials at EOW Mumbai and the Policeauthorities have filed a Charge Sheet with the Additional Chief Metropolitan Magistrate47th Court Esplanade Mumbai in March 2017 against the accused persons. The erstwhileManaging Director and other persons involved in the offences have been arrested. Thematter is presently sub judice.
The company has written off Rs.61.20 lacs (shown under exceptional items) being theamount misappropriatedby an official of the company in the financial year 2014-15. Thisamount is to be recovered from the accused persons.
3. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2017 was Rs.10.50 crore. No additionsand alterations to the capital were made during the financial year 2016-17.
Your Company does not propose any dividend for the financial year ended 31st March 2017since it does not have adequate profits for the same.
Your Company has not declared and paid any dividend during the financial year 2015-16due to inadequacy of profits
Your Company has declared and paid a dividend of Rs.2 per share of the face value ofRs.10 each for the financial year 2014-15.The dividend approved by the Members at theAnnual General Meeting has absorbed a sum of Rs. 251.99 lacs inclusive of taxes.
Your Company has not declared and paid any dividend during the financial year 2013-14due to inadequacy of profits.
5. Transfer to General Reserve
Your Company does not propose any transfer of funds to the General Reserve.
6. HUMAN RESOURCES
The well-disciplined workforce which has served the company for the last 5 years liesat the very foundation of the company's major achievements and shall well continue for theyears to come. The management has always carried out systematic appraisal of performanceand imparted training at periodic intervals. The company has always recognized talent andhas judiciously followed the principle of rewarding performance.
7. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has in place apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the financial year2016-17 the Company has not received any complaints on sexual harassment
8. DOCUMENTS PLACED ON THE WEBSITE (www.tcms.bz)
The following documents have been placed on the website in compliance with the Act:
Details of Unpaid dividend as per section 124(2) Corporate Social Responsibility Policyas per section 135(4)(a)
Financial Statements of the Company and consolidated financial statements along withrelevant documents as per third proviso to section 136(1)
Separate audited accounts in respect of subsidiaries as per fourth proviso to section136(1)
Details of vigil mechanism for Directors and employees to report genuine concerns asper proviso to section 177(10) - Whistle Blower Policy.
The terms and conditions of appointment of Independent Directors as per Schedule IV tothe Act.
The code of conduct for Board of Directors and Senior Managers
Familiarization Program for the Independent Directors
Policy on Related Party Transactions
Policy on Prevention Prohibition and Redressal of Sexual Harrassment of Women at workplace.
Code of conduct for Insider Trading and Corporate Disclosure Practices
Policy on determination of materiality for disclosure of events or information
Policy on preservation of documents & archival
Nomination & Remuneration Policy
Policy on Material Subsidiary.
9. SUBSIDIARY COMPANIES
Your Company has one subsidiary viz. TWENTYFIRST CENTURY SHARES AND SECURITIESLIMITED. The subsidiary company is engaged in Investment & Trading in Shares andDerivatives. The company has surrendered the Trading Membership of NSE during theFinancial Year 2014-15.
There are no associate companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act"). Further there has been no material change in the nature ofbusiness of the subsidiaries.
Shareholders interested in obtaining a copy of the audited annual accounts of thesubsidiary company may write to the Company Secretary.
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC-1which forms part of the annual report.
Performance and financial position of the subsidiary companies is given inAnnexure-V.
10. CORPORATE GOVERNANCE
R E P O R T M A N A G E M E N T DISCUSSION & ANALYSIS AND OTHER INFORMATIONREQUIRED UNDER THE COMPANIES ACT 2013 AND SEBI (LODR) REGULATIONS 2015
As per provisions of the SEBI (LODR) Regulations 2015 Management Discussion andAnalysis report (ANNEXURE III) and Corporate Governance Report with Auditors'certificate thereon (ANNEXURE-IV) are attached and form part of this report.
Various information required to be disclosed under the Act and the Listing Agreement isset out in the ANNEXURE-I and forms part of this report.
11. Technology Absorption & Foreign Exchange Inflow & Outgo
Company's business does not require any technology absorption and hence no reporting isrequired to be furnished under this heading.
Foreign Exchange inflow and outflow during the year is Nil.
12. C O R P O R A T E S O C I A L
During the financial year 2016-17 the company has not made profit. However since thecompany had made considerably good profit exceeding Rs. 5 Crore during the financial year2014-15 the company is required to spend on the Corporate Social Responsibility (CSR)activities. Your Company knows the importance of Corporate Social Responsibility (CSR)activities of the company under the recently introduced provisions of the Companies Act2013. Accordingly a committee has been formed under the chairmanship of Mr.Sundar IyerChairman of the company.
Your Company has provided a sum of Rs.23.47 lacs under Corporate Social ResponsibilityExpenditure for the year 2016-17. The CSR Committee has identified a couple of projects oractivities under this Scheme and has approved the expenditure of Rs.45.50 lacs during thisfinancial year 2016-17. (This includes the provision amount of Rs.22.03 lacs made in thefinancial year 2015-16). The committee is studying the various projects and the activitieswhich can be undertaken by the company in the coming years and are conscious that theseactivities must be for the benefit of the community who need to be nurtured. The annualreport on CSR activities for the financial year 2016-17 is enclosed herewith as Annexure -VIII
13. BOARD EVALUATION
Pursuant to the provisions of companies Act 2013 and of the Listing Agreement theBoard has carried out annual performance evaluation of its own performance the directorsindividually as well the evaluation of the working of its Audit Nomination &Remuneration and Stakeholder committee. The manner in which the evaluation has beencarried out has been explained in Corporate Governance Report.
Your Company has not accepted any deposits from the public during the year underreview. There are no outstanding deposits as on 31st March 2017.
15. D I R E C T O R S A N D K E Y
At the 28th Annual General Meeting of the company held on 27th June 2014 the companyhad appointed the existing independent director Shri S.Hariharan (DIN 02545610) asindependent director under the companies Act 2013 for a period of 5 years commencing from27thJune 2014. The Independent Director has given declaration that he meets the criteriaof independence as laid down under section 149(6) of the Companies Act 2013 and listingagreement.
At the 29th Annual General Meeting of the company held on 17th July 2015 the companyhad appointed the existing Independent Director Shri Iyer Vishwanth (DIN 00137166) for aperiod of 5 years till 16th July 2020 and Ms. Sita Sunil (DIN 00041722) as an IndependentWoman Director for a period of 5 years till 20th April 2020.
Independent Woman Director - Ms. Sita Sunil resigned as a Director of the Company on9th January 2017 due to her personal preoccupations.
The company appointed Ms. Dipti Dinesh Sakpal (DIN07305797) as Independent WomanDirector on 18th April 2017 in the vacancy created on account of the resignation ofIndependent Woman Director - Ms. Sita Sunil.
Ms. Dipti Dinesh Sakpal (DIN07305797) has been appointed as an Independent WomanDirector for a period of 5 years till 17th April 2022.
All the three Independent Directors have given declaration that they meet the criteriaof independence as laid down under section 149(6) of the Companies Act 2013 and oflisting agreement.
Mr.Sundar Iyer (DIN 00481975) (Executive) Director of our company shall retire byrotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment. As stipulated in terms of the listing agreement with the stock exchangesthe brief profile of Mr Sundar Iyer is provided in the report on corporate governancewhich forms an integral part of this Annual Report.
The Key Management Personnel of the company are as under:
1. Mr. Sundar Iyer - Chief Executive Officer
2. Mr. A.V.M.Sundaram - Company Secretary
3. Mr. Bhaskar Shetty - Chief Financial Officer
Messrs. Lakhani & Lakhani Mumbai Chartered Accountants (Registration Number115728W) have been appointed as statutory auditors of the company at the Annual GeneralMeeting held on 17th July 2015 from the conclusion of 29th Annual General Meeting till theconclusion of 34h Annual General Meeting of the company.
The Board of Directors of the company has recommended the appointment of Messrs.Lakhani & Lakhani Mumbai Chartered Accountants (Registration Number 115728W) asstatutory auditors of the company for the financial year ending 31st March 2018 subjectto the ratification of appointment of Statutory Auditors at this annual general meeting bythe shareholders.
REPLY TO THE OBSERVATIONS MADE BY THE STATUTORY AUDITOR
Statutory Auditors in their report have made the following observations:
Non Provision of Doubtful Loans & Advances amounting to Rs.2290.08 lacs advanced toits Subsidiary company and Related Company.
We further report that had the observation made by us above been considered the lossfor the year would have been Rs.2329.01 lacs (as against the reported loss figure of Rs.38.93 lacs) and loss after considering accumulated figures of previous years would havebeen Rs. 1739.41 lacs (as against reported figure of profit of Rs. 550.67 Lacs) and thebalance of amount due from subsidiary company and group company would have been Rs. Nil(as against the reported figure of Rs. 2290.08 lacs).
Regarding the observation for non-provision for Doubtful Loans & Advances amountingto Rs.2290.08 lacs made to the subsidiary company and a group company the management isof the opinion that the subsidiary company is making efforts to resolve the pending casesin recovering the Trade Receivables of the company which are very old and are underdispute. However the subsidiary company is now undertaking investment activities forimproving its profitability which will enhance the chances of recovery of loans from thesubsidiary company. Hence the company has not provided for the loans amounting toRs.2290.08 lacs given to the subsidiary company as Doubtful Loans & Advances .
Emphasis of Matter:
Without qualifying our opinion we draw attention to note no 29 of the Notes toAccounts to the financial statements on the matter of police complaint lodged by theCompany with regard to misappropriation of the funds of the Company and possiblediversion of funds by an erstwhile director of the company in earlier years. The matterwas investigated and charge sheet has been filed during the financial year 2016-17. Thematter is presently sub-judice.
The management has noted the above remarks by the Statutory Auditors which is a matterof reporting by them.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Lakshmmi Subramanian & Associates Practising Company S e c r e t a r ie s ( C P N o . 1 0 8 7 FCS:3534)Company Secretaries to undertake the secretarialaudit of the company for the financial year ended 31st March 2017 (FY 2016-17). TheSecretarial Audit Report is annexed herewith as 'Annexure VII'.
REPLY TO THE OBSERVATIONS MADE BY THE SECRETARIAL AUDITOR
Secretarial Auditors in their report have made the following observations:
1. The Company being an Non- banking financial - (NBFC) as mentioned in their mainobjects had been suspended by the Reserve bank of India(RBI) and Company yet to takesteps to amend their main objects to categorize themselves other than NBFC.
2. The company is engaged with investment and trading activity with their own surplusfunds. However without any registration/license required under RBI (NBFC rules andregulations).
Board of Directors is of the opinion that the registration as NBFC is not applicable tothe company as per point no.16 of the
" A N N E X U R E A " T O
INDEPENDENTAUDITOR'S REPORT of the company which reads as under:
"16. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934."
3. The Company had shown loss of Rs 38.93 lacs without considering /providing doubtfuldebts/loans and advances upto Rs 2290.08 lacs for the year under review and theconsequential effect since not provided the company has reported a profit of Rs 550.67lacs (as detailed in the auditor's report ).
Regarding the observation for non-provision for Doubtful Loans & Advances amountingto Rs.2290.08 lacs made to the subsidiary company and a group company the management isof the opinion that the subsidiary company is making efforts to resolve the pending casesin recovering the Trade Receivables of the company which are very old and are underdispute. Further the management has also considered the fact that the subsidiary companyis also undertaking investment activities for improving its profitability which willenhance the chances of recovery of interest free loans given to the subsidiary company.Hence the company has not provided for the interest free loans as Doubtful Loans &Advances amounting to Rs.2290.08 lacs made to the subsidiary company.
All the investments related activities are done under the direct supervision of theChairman of our company. As per the provisions of the Companies Act 2013 the company hasappointed M/s. Om Prakash S.Chaplot& Co Chartered Accountants Mumbai as an InternalAuditor for the company for the financial year 2016-17.
The Company proposes to continue their services and appoint M/s. Om PrakashS.Chaplot& Co Chartered Accountants Mumbai as an Internal Auditor for the financialyear 2017-18 to ensure proper and adequate systems and procedures commensurate with itssize and nature of its business.
The Board of Directors would like to thank all employees of the Company and alsoCompany's shareholders auditors customers and bankers for their continued support.
18. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces and other associated and incidental factors may however lead to variation in actualresults.
| ||For and on behalf of the Board |
|Place: Mumbai ||Sundar Iyer |
|Date: 28th August 2017 ||Chairman & CEO |