Aravali Securities & Finance Ltd.
|BSE: 512344||Sector: Financials|
|NSE: ARAVALISEC||ISIN Code: INE068C01015|
|BSE 15:22 | 29 Jan||2.69||
|NSE 05:30 | 01 Jan||Aravali Securities & Finance Ltd|
Aravali Securities & Finance Ltd. (ARAVALISEC) - Director Report
Company director report
TO THE MEMBERS
Your Directors take the pleasure in presenting their Report and Audited FinancialStatement of the Company along with Auditors' Report thereon for the year ended 31 stMarch 2017.
Your directors are not recommending any payment on account of dividend CHANGE IN THENATURE OF BUSINESS
There has been no change in the nature of the business of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
A. FINANCIAL REVIEW
Your Company has a loss of Rs. 74.23 lakh after depreciation and interest. Further aprovision for income tax in respect of earlier years of Rs. 0.06 lakh has been made in theaccounts. The loss of Rs. 3121.81 lakh including brought forward loss of Rs. 3047.52 lakhhas been carried to the Balance Sheet.
B. RESOURCES AND LIQUIDITY
The Company as in the past is not relying on any borrowing except unsecured loans tofund its activities.
C. 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 huge competitionand has also added to worst scenario for the NBFC's. This has virtually put a stop onprivate financing and most of the Non-Banking Finance Companies are out of this business.
D. BUSINESS OVERVIEW
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.
E. OPPORTUNITIES AND THREATS
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.
G. 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.
H. 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.
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.
The Company received declaration made by the independent directors of the Company thatthey fulfill the criteria given under Section149(6) of the Companies Act 2013 and otherapplicable provisions.
The Nomination & Remuneration Committee (NRC) shall evaluate the performance ofeach Director of the Company with reference of the authority under the Nomination andRemuneration Policy of the Company framed in accordance with the provisions of Section 178of the Companies Act 2013 and based on their functions as mentioned in the Code ofConduct of the Directors. Evaluation of Independent Directors shall be carried on by theentire Board in the same way as it is done for the Executive Directors of the Companyexcept the Director getting evaluated. The detail process of evaluation and ratingsthereon are mentioned in the policy.
SUBSIDIARIES JOINT VENTURES ASSOCIATE COMPANIES
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year underreview were on arms length basis and were also in the ordinary course of business. Therewere no materially significant related party transactions entered into by the Company withthe promoters directors key managerial personnel which may have a potential conflictwith the interests of the Company at large.
The Related Party Transactions policy as approved by the Board of Directors is uploadedon the Company's website www.aravalisecurities.com.
AUDITORS AND AUDITOR'S REPORT:
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. Salarpuria & Partners Chartered AccountantsNew Delhi (Firm Registration No. 302113E) Delhi as the Statutory Auditors of the Companyexpires at the conclusion of the ensuing Annual General Meeting of the Company. The Boardof Directors of the Company at their meeting held on 11th August 2017 on therecommendation of the Audit Committee have made its recommendation for appointment ofM/s. SPMR & Associates Chartered Accountants New Delhi (Firm Registration No.07578N) as the Statutory Auditors of the Company by the Members at the 37th Annual GeneralMeeting of the Company.Accordingly aresolutionproposing appointment of M/s. SPMR &Associates Chartered Accountants New Delhi (Firm Registration No. 07578N) as theStatutory Auditors of the Company to hold office from the conclusion of 37th AnnualGeneral Meeting till the conclusion of 38th Annual General Meeting of the Company pursuantto Section 139 of the Companies Act 2013 forms part of the notice of the 37th AnnualGeneral Meeting of the Company. The Company has received their written consent and acertificate that they satisfy the criteria provided under Section 141 of the Act and thatthe appointment if made shall be in accordance with the applicable provisions of the Actand rules framed thereunder.
During the year under review the Auditors had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134 (3)of the Act. M/s. Salarpuria & Partners over many years have successfully met thechallenge that the size and scale of the Company's operations pose for auditors and havemaintained the highest level of governance ethical standards rigour and quality in theiraudit. The Board place on record its appreciation for the services rendered by M/s.Salarpuria & Partners as the Statutory Auditors of the Company.
The Report given by M/s. Salarpuria & Partners Chartered Accountants New Delhi(Firm Registration No. 302113E) Statutory Auditors on the financial statement of theCompany for the year 2016-17 is part of the Annual Report. There has been noqualification reservation or adverse remark or disclaimer in their Report except asunder:
Auditors in the annexure to their report have drawn attention to the Point No. iistating 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.
Further with respect of Point no. viii the notes on financial statement referred to inthe Auditor Report are self explanatory and do not call for any further comment.
SECRETARIAL AUDIT REPORT:
A Secretarial Audit Report given by Mr. Nitesh Kumar Sinha Practising CompanySecretary (Membership no. F7536) is given in Annexure-A to this report.
The Board of Directors of your Company has re-appointed M/s Rajan Goel &Associates Chartered Accountants New Delhi (Firm Registration No.004624N) as InternalAuditors pursuant to the provisions of Section 138 of the Companies Act 2013 for thefinancial year 2017-18.
EXTRACTS OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is given inAnnexure-B to this report BUSINESS RISK MANAGEMENT:
The Company has laid down a well defined Risk Management Policy to identify the risksassociated with the business of the Company on a periodical basis and review theminimization programs to mitigate them.
At present the Company has not identified any element of risk which may threaten theexistence of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy and has established the necessary vigilmechanism for employees and directors to report concerns about unethical behavior. Noperson has been denied access to the Chairman of the Audit Committee. The said policy ofthe Company can be accessed at www.aravalisecurities.com.
Pursuant to the Provisions of the Companies Act 2013 and under Securities &Exchange of Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an Annual Performance Evaluation of its own performanceand all the Directors individually.
The evaluation of Non-Independent Directors Chairman and the Board as a whole was doneat a separate meeting by the Independent Directors.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There has been no material change and commitments occurred between the end of thefinancial year of the Company i.e. 31 st March 2017 and the date of this report affectingfinancial position of the Company.
Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under SEBi (Listing of Obligations and DisclosureRequirements) Regulation 2015 with the Stock Exchanges.
A Certificate from the Practicing Company Secretary of the Company regarding complianceof conditions of Corporate Governance is given in Annexure-C to this report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company
and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the membersat the Registered office of the Company during business hours on working days of theCompany up to the date of ensuing Annual General Meeting. If any member is interested ininspecting the same such member may write to the Company Secretary in advance.
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
Your Company and its Directors wish to extend their sincere thanks 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.