TO THE MEMBERS
Your Directors take the pleasure in presenting their Report and Audited FinancialStatements of the Company along with Auditors' Report thereon for the year ended 31stMarch 2014.
|WORKING RESULTS ||2013-2014 ||2012-2013 |
| ||(Rupees in lacs) ||(Rupees in lacs) |
|Profit before interest depreciation and taxes ||175.82 ||144.94 |
|Less : Interest ||152.28 ||240.03 |
|Profit/(Loss) before depreciation and taxes ||23.54 ||(95.09) |
|Less : Depreciation ||6.62 ||6.96 |
|Profit/(Loss) before provision of tax ||16.92 ||(102.05) |
|Less : Provision for Income Tax || || |
|Current Tax ||5.23 ||- |
|Deferred Tax ||156.98 ||19.53 |
|In respect of earlier years ||0.05 ||- |
|Profit/(Loss) after Taxation ||(145.34) ||(121.58) |
|Add: Balance brought forward from previous year ||(166.62) ||(45.04) |
|BALANCE CARRIED TO BALANCE SHEET ||(311.96) ||(166.62) |
Your directors are not recommending any payment on account of dividend.
MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL REVIEW :
Your Company has a profit of Rs. 16.92 lacs after depreciation and interest. Further aprovision for income tax in respect of earlier years and deferred tax of Rs. 0.05 lacs andRs. 156.98 lacs respectively has been made in the accounts. The loss of Rs. 311.96 lacsincluding brought forward loss of Rs. 166.62 lacs has been carried to the Balance Sheet.
RESOURCES AND LIQUIDITY :
The Company as in the past is not relying on any borrowing except unsecured loans tofund its activities. INDUSTRY STRUCTURE AND DEVELOPMENTS :
The Non Banking Financial Companies (NBFC) sector is still struggling for its growth inIndia. The NBFC sector is doing much better all over the world as compared to AsianCountries as the general perception about NBFC in the mind of public is still hazy. Otherreason may be the excess regulatory requirements by the Reserve Bank of India whichconstituted a hurdle for its growth in India. Except few NBFC's no other company isworking well. This has created a very discouraging situation for the remaining NBFC whohave no option except to diversify from its business of financing. Entrance of banks inconsumer durable financing as well as in housing finance has brought forth a hugecompetition and has also added to worst scenario for the NBFC's. This has virtually put astop on private financing and most of the Non-Banking Finance Companies are out of thisbusiness.
BUSINESS REVIEW :
Your company being classified as an Investment Company is doing long term and shortterm investments. No further opportunity has come to diversify the business of the Companyas business of financing is no more lucrative. However your board is in constant look outfor the new business avenues which can be taken with the existing business.
Due to recession all over the world the Indian economy though not affectedsubstantially has suffered and the opportunities have become limited in all sphere ofbusinesses. The financial market has suffered a lot and the business for NBFC's havefurther reduced. This did not discourage the board of directors of your Company who areconstantly looking for an opportunity to expand the business of the Company.
Your Company being in the financial services sector is facing a very stiff competitionfrom public sector as well as private sector banks and financial institutions. It istrying to cope up with the same but is finding it difficult to match up with them inexpertise as well as finances available. However the Company is trying its level best toachieve the same level of competence to meet the challenges thrown in this sector.
Your Company is still in the process of consolidation and has not decided to enter intonew field. It is exploring various business opportunities but nothing concrete has beenderived. Barring unforeseen circumstances your directors hope to find some concretebusiness opportunity to expand the business of the Company.
RISK AND CONCERNS :
Your Company at present is exposed to the normal industry risk factor of volatility ininterest rate economic cycle and credit risk. It has not yet decided its future course ofactivities. The impact of new activity as and when decided will be known in the future.
ADEQUACY OF INTERNAL CONTROL :
The established Internal Control Systems of your Company are adequate to ensure thatall the activities are monitored and controlled against any misuse or misappropriation ofasset and that the transactions are authorized recorded and reported correctly. More sothese internal control systems are regularly monitored by the audit committee of yourCompany and are improved upon on regular basis.
HUMAN RESOURCE DEVELOPMENT:
ASFL appreciates the importance of its people and the key role that they play inachieving objectives through strategy implementation. Our people are equipped with theknowledge skills and motivation that gives ASFL a leading advantage.
FIXED DEPOSITS :
Your Company does not accept fixed deposits from public and to this effect anundertaking is given to the Reserve Bank of India.
As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Devashish Poddar (DIN:00457349) Director of the Company retire by rotationand being eligible offer himself for re-appointment.
As per Section 149 and other applicable provisions of the Companies Act 2013 yourDirectors are seeking appointment of Mr. R.A.Kila (DIN:00326165) Mr. Naresh Birla(DIN:02902650) and Mr. Ashok Kumar Sharma (DIN:03558843) as Independent Directors for fiveconsecutive years for a term up to the conclusion of the 39th Annual General Meeting ofthe Company in the calendar year 2019.
DIRECTORS' RESPONSIBILITY STATEMENT :
Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956 withrespect to Directors' Responsibility Statement it is hereby confirmed:
a) That in the preparation of the annual accounts the applicable accounting standardshave been followed and that no material departures have been made from the same;
b) That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year ended on that date;
c) That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) That they have prepared the annual accounts on a going concern basis.
AUDITORS AND AUDITORS' REPORT:
The Statutory Auditors of the Company M/s. Salarpuria & Partners CharteredAccountants (Firm Registration No. 302113E) who retire at the conclusion of ensuingAnnual General Meeting being eligible offer themselves for re-appointment for a term of3(Three) years in accordance with the provisions of Section 139 of the Companies Act2013.
Auditors in the Annexure to their report have drawn attention to the Point No. 2(c)stating that certain shares are not registered in the name of the Company. The same are onaccount of bad delivery for which efforts are being made to sort out the same.
PARTICULARS OF EMPLOYEES:
Particulars of employees in accordance with the provisions of Section 217(2A) of theCompanies Act 2013 read with the Companies (Particulars of Employees) Rules 1975 asamended are not given as none of the employees qualify for such disclosure.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company being engaged in the financial services and trading does not have anyenergy utilization or technology absorption. The Company during the year underconsideration has not earned or spent any foreign exchange.
CORPORATE GOVERNANCE :
Your Company has taken adequate steps to ensure that all mandatory provisions of'Corporate Governance' as provided in the listing agreement of the Stock Exchanges withwhich the Company's shares are listed are duly complied with.
A Certificate from the Auditors of the Company regarding compliance of conditions ofCorporate Governance is given in Annexure which is attached hereto and forms part of thisDirector's Report.
Your Directors would like to express their sincere appreciations for the co-operationreceived from shareholders bankers and other business constituent during the year underreview. Your directors also wish to place on record their deep sense of appreciation forthe commitment displayed by all employees of the Company.
| ||By Order of the Board of DiBectors |
| ||For ARAVALI SECURITIES & FINANCE LIMITED |
| ||Sd/- |
| ||Ranjan Kumar Poddar |
|Place: Gurgaon Haryana ||Chairman & Managing Director |
|Date: 13th August2014. ||(DIN: 00290949) |