Your Directors are pleased to present the Thirty First Annual Report and theCompanys audited financial statement for the financial year ended March 31 2015.
1. FINANCIAL RESULTS
The Companys financial performance for the year ended March 31 2015 issummarised below:
|Particulars ||Standalone ||Consolidated |
| ||Rs in lakhs ||Rs in lakhs |
| ||2014-15 ||2013-14 ||2014-15 ||2013-14 |
|Total Revenue ||372.41 ||256.16 ||1435.69 ||459.90 |
|Profit before Interest Depreciation &Tax ||248.02 ||88.94 ||289.07 ||68.63 |
|Less: Interest ||259.60 ||227.30 ||409.57 ||270.79 |
|Less: Depreciation ||45.57 ||21.08 ||113.17 ||29.29 |
|Profit/ (Loss) Before Tax ||(57.15) ||(159.44) ||(233.67) ||(231.45) |
|Less: Tax Expenses || || || || |
|Current Tax ||- ||- ||- ||- |
|Deferred Tax ||14.78 ||6.90 ||23.48 ||6.90 |
|Prior Period tax ||- ||- ||(10.68) ||- |
|Net Profit/ (Loss) after Tax ||(42.37) ||(152.54) ||(220.88) ||(224.55) |
|Profit / (Loss) of Shares in Associate Concern ||- ||- ||- ||- |
|Minority Interest ||- ||- ||17.72 ||- |
|Add: Amount brought forward from Last Year ||- ||- ||- ||(610.60) |
|Less: Appropriations ||- ||- ||- ||- |
|Proposed Dividend ||- ||- ||- ||- |
|Tax on Proposed Dividend ||- ||- ||- ||- |
|Transfer to General Reserve ||- ||120.11 ||- ||- |
|Balance carried to Balance Sheet ||(42.37) ||(32.43) ||(238.60) ||(835.15) |
* the consolidated figures of 2014-15 includes the figures of two subsidiaries whereas the consolidated figures of 2013-14 includes the figures of only one subsidiary.
In view of the losses the Directors do not recommend any dividend for the FinancialYear 2014-2015.
3. OPERATIONAL REVIEW/COMPANYS PERFORMANCE
On a Standalone basis the gross earnings rose to Rs 372.41 lakhs from Rs 256.16 lakhs.The year ended with a loss after tax of Rs 42.37 lakhs as compared to Rs 152.54 lakhs inthe previous year.
The Company has let out part of the office premises on Leave and License basis to AsitC. Mehta Investment Interrmediates Limited and earned license fee income of Rs 146.24lakhs. The Company offered advisory and consultancy services to certain clients and earnedthe fees aggregating to Rs 95.06 lakhs from Advisory and Consultancy Division.
On a consolidated basis the gross revenues were at Rs 1435.69 lakhs as compared to Rs460 lakhs in the previous year and loss after tax was at Rs 224.55 lakhs as against Rs220.88 lakhs in the previous year. The overall consolidated loss aggregated to Rs 238.60lakhs (excluding share of loss from an Associate concern). There was a loss of Rs 224.55lakhs in the previous year (including share of loss from a Associate concern) Nucleus ITEnabled Services Limited a wholly-owned subsidiary of the company engaged in to ITeSservices showed a stable income from operations and the loss before depreciation andfinance cost increased to Rs 120.28 lakhs as against loss of Rs 5.37 lakhs in the previousyear. The said loss is due to unexceptional bad debt of Rs 85.77 lakhs. The overall lossstood at Rs 214.00 lakhs as against Rs 72.32 lakhs in the previous year.
4. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has three subsidiaries as on March 31 2015. There are no associatecompanies within the meaning of Section 2(6) of the Companies Act 2013 (theAct"). There has been no change in the nature of the business of the subsidiaries.The Company has a wholly owned subsidiary viz. Nucleus IT Enabled Services Limited. Duringthe year under review Asit C. Mehta Investment Interrmediates Limited (ACMIIL) has becomethe Subsidiary under section 2(87) of the Act and material non-listed Indian subsidiaryof the Company as per Clause 49 sub-clause (V)(E) of the Listing Agreement pursuant tothe conversion of the Fully Convertible Debentures held by the Company in ACMIIL intoEquity Shares. As Asit C. Mehta Comdex Services DMCC a company incorporated in Dubai isthe wholly owned subsidiary of ACMIIL it becomes the subsidiary of the Company undersection 2(87) of the Act.
The names of companies that have become Subsidiary Companies during the year are asunder:
|Sr. No ||Name of the Company ||with effect from |
|1. ||Asit C. Mehta Investment Interrmediates Limited ||15th December 2014 |
|2. ||Asit C. Mehta Comdex Services DMCC ||15th December 2014 |
Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Companys subsidiaries in Form AOC-1is attached to the financial statements of the Company. Pursuant to the provisions ofsection 136 of the Act the financial statements of the Company consolidated financialstatements along with relevant documents and separate audited accounts in respect ofsubsidiaries are available on the website of the Company.
The financial statement of Asit C. Mehta Comdex Services DMCC has not been consolidatedwith the Companys financial statements pursuant to Rule 6 of Companies(Accounts) Rules 2015 which gives an exemption with respect to consolidation of thefinancial statement of subsidiary or subsidiaries incorporated outside India only for thefinancial year commencing on or after 1st April 2014.
5. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Act the Board of Directors states that: a) in thepreparation of the annual accounts for the year ended March 31 2015 the applicableaccounting standards have been followed along with proper explanation and there are nomaterial departures from the same. b) they have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable andprudent to give a true and fair view of the state of affairs of the Company at the end ofthe financial year March 31 2015 and of the profit and loss of the Company for thatperiod; c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 havelaid down internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; and f) they have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems are adequate and operating effectively.
6 . DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. Retirement by Rotation
In accordance with the provisions of the Act Mrs. Deena A. Mehta Non-ExecutiveDirector of the Company retires by rotation and being eligible has offered herself forre-appointment.
b. Declaration by Independent Directors
Pursuant to the provisions of Section 149 of the Act Mr. Vjay Ladha Mr. R.Krishnamurthy and Mr. Pundarik Sanyal were appointed as Independent Directors at theAnnual General Meeting (AGM) of the Company held on September 26 2014. The terms andconditions of appointment of Independent Directors are as per Schedule IV of the Act. Theyhave submitted a declaration that each of them meets the criteria of independence asprovided in Section 149(6) of the Act and Clause 49 of the Listing Agreement and there hasbeen no change in the circumstances which may affect their status as Independent Directorduring the year.
c. Appointment of KMP
Pursuant to the provisions of Section 203 of the Act Mr Raj Gandhi was appointed asCompany Secretary and Compliance Officer of the Company w.e.f. 1st December 2014. Ms.Purvi Ambani was appointed by the Board of Directors as the Chief Financial Officer ofthe Company and Mr. Stanley Santmayor was appointed as Manager of the Company designatedas Key Managerial Persons with effect from 3rd February 2015.
7. MEETINGS OF THE BOARD
Six meetings of the board were held during the year. For details of the meetings of theboard please refer to the corporate governance report which forms part of the AnnualReport.
8. BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed under Clause 49 of the Listing Agreement.
The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:
2. Objectivity and Independence
3. Guidance and support in context of life stage of the Company;
4. Understanding of the Companys business;
5. Understanding and commitment to duties and responsibilities;
6. Willingness to devote the time needed for effective contribution to Company;
7. Participation in discussions in effective and constructive manner;
8. Responsiveness in approach;
9. Ability to encourage and motivate the Management for continued performance andsuccess;
The evaluation involves self-evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis / her evaluation. Accordingly a process of evaluation was followed by the Board forits own performance and that of its Committees and individual Directors and also thenecessary evaluation was carried out by Nomination and Remuneration Committee andIndependent Directors at their respective meetings held for the purpose.
9. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Companys policy on Directors appointment and remuneration and othermatters provided in Section 178(3) of the Act has been disclosed in the CorporateGovernance report which forms part of the Annual Report.
10. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
11. AUDIT COMMITTEE
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of the Annual report.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s Manek & Associates (Firm Registration No 126679W) Chartered Accountants wereappointed as Statutory Auditors of the Company from the conclusion of the thirtieth AGM ofthe Company held on September 26 2014 till the conclusion of the thirty-third AGM to beheld in the year 2017 subject to ratification of their appointment at everyAGM.
Accordingly a resolution seeking Members ratification for the re-appointment ofM/sManek & Associates (Firm Registration No 126679W) Chartered Accountants as theStatutory Auditors of the Company for the remaining tenure is placed before the members inthe ensuing AGM.
The Audit Committee and Board have reviewed their eligibility criteria as laid downunder Section 141 of the Act and recommended the ratification of their re-appointment asStatutoryAuditors for the remaining tenure.
13. AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT
The Auditors Report does not contain any qualifications reservations or adverseremarks
Pursuant to Section 204 of the Act and Rules thereunder the Company had appointed M/sMehta & Mehta Company Secretaries to undertake the Secretarial Audit of the Company.The Secretarial Audit Report for the FY 2014-15 in form
MR-3 given by M/s. Mehta & Mehta Company Secretaries is attached as Annexure Iwith this report.
The Secretarial Auditor has made an observation with regard to Section 184 of theCompanies Act 2013 ("Act 2013"). In the first board meeting of the year theCompany had complied with Section 299 of the Companies Act 1956 which is correspondingto Section 184 of the Act 2013. The majority of the provisions related to the Act 2013had become effective from April 1 2014 which includes Section 184. As the Company hadalready complied with the Section 299 of the Companies Act 1956 the Company was of theview that there is no need to complied with Section 184 of the Act 2013. The CompanySought professional advice on the same and then complied with Section 184 of the Act 2013also in the subsequent board meeting.
14. RISK MANAGEMENT
The development and implementation of Risk Management Policy has been covered in theCorporate Governance Report which forms part of the Annual report.
15. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Amounts outstanding as at 31st March 2015
|Particulars ||Amount |
|Loans given ||78.52 |
|Guarantees given ||1245.00 |
|Investments made ||1546.57 |
|Name of Entity ||Relation ||Amount (in lakhs) ||Particulars of Loan/ Guarantee/Investments ||Purpose |
|Nucleus IT Enabled Services Limited. ||Wholly owned Subsidiary ||78.52 * ||Loan ||Business Purpose |
|Asit C. Mehta Investment Interrmediates Limited (ACMIIL)** ||Subsidiary ||500 ||Guarantee ||Business Purpose |
|Asit C. Mehta Commodity Services Limited *** ||Subsidiary of Associate ||745 ||Guarantee ||Business Purpose |
|Asit C. Mehta Investment Interrmediates Limited. ||Subsidiary ||1246.57 ||Investments ||Investment in fully convertible debentures converted into Equity shares on 15th December 2014 |
|Nucleus IT Enabled Services Limited. ||Wholly owned subsidiary ||300 ||Investments ||Investments in the equity shares of the company |
* including interest on loan of Rs 11.87 lakh
** associate of the Company till 15th December 2014 and subsidiary thereafter*** subsidiary of ACMIIL till 30th March 2015
16. TRANSACTIONS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an armslength basis. No Material Related Party Transactions i.e. transactions exceeding tenpercent of the annual consolidated turnover as per the last audited financial statementswere entered during the year by your Company. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3) (h) of the Act in Form AOC - 2 is notapplicable.
17. CORPORATE SOCIAL RESPONSIBILITY
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Act and hence it is notrequired to formulate policy on Corporate Social Responsibility.
18 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with requirementsinter-alia of The Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Compliance Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainee) are covered under this policy. The following is a summary of sexualharassment complaints received and disposed off during the Financial Year 2014-15: No. ofcomplaints received: NIL
No. of complaints disposed off: NIL
19. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of annual return is given in AnnexureII in the prescribed Form MGT-9 which forms part of this report.
20. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year:
The Directors of the Company are not paid any remuneration except the sitting fees.Hence the ratio of the remuneration of each director to the median remuneration of theemployees is NIL.
(ii) The percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear:
The Board of the Company consists of Non-executive Directors. The non-executivedirectors are paid no remuneration except the sitting fees plus reimbursement of actualtravel expenses if any.
There is no increase in the remuneration of Company Secretary ChiefFinancialOfficerand Manager of the Company.
(iii) The percentage increase in the median remuneration of employees in the financial
There was a decrease of 6.33% in median remuneration of employees in the financialyear.
(iv) The number of permanent employees on the rolls of company:
The Company has 4 (Four) permanent Employees on the rolls of Company as on 31stMarch 2015 as compared to
8 (Eight) permanent employees as on 31st March 2014.
(v) The explanation on the relationship between average increase in remuneration andcompany performance:
On an average employees received an annual increase of 10%. The individual incrementvaried from 5% to 12% based on individual performance. The increase in remuneration is inline with the market trends in the country. In order to ensure that remuneration reflectsCompany performance the performance pay is also linked to organizationsperformance apart from an individuals performance.
(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against theperformance of the company:
|Aggregate remuneration of Key Managerial Personal ||10.35 |
|Revenue ||372.40 |
|Remunerations of KMP ( as % of above) ||2.78% |
|Profit / Loss before tax ||(57.15) |
|Remunerations of KMP ( as % of Profit before tax) ||Not computable due to loss |
*in order to show the comparison the annual remuneration of the KMP is consideredthough not appointed as KMP for the entire year.
(vii) a. Variations in the market capitalisation of the company price earnings ratioas at the closing date of the current financial year and previous financial year
|Particulars ||March 31 2015 ||March 31 2014 ||% Change |
| ||(Rs in lakhs) ||(Rs in lakhs) || |
|Market Capitalisation (No. of Shares X Market price) ||2104.84 ||921.18 ||128.49 |
|Price Earning Ratio ||NIL ||NIL || |
b. Percentage increase over decrease in the market quotations of the shares of thecompany in comparison to the rate at which the company came out with the last public offerin case of listed companies:
|Particulars ||March 2015 ||24th April 1995 (IPO) ||% Increase |
| ||(Rs in lakhs) ||(Rs in lakhs) || |
|Market price (BSE) ||42.50 ||35 ||21.43% |
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: NotApplicable (ix) Comparison of the each remuneration of the Key Managerial Personnelagainst the performance of the company:
| ||Mr. Stanley Santmayor ||Ms. Purvi Ambani ||Mr. Raj Gandhi |
| ||Manager ||Chief Financial Officer ||Company Secretary |
| ||(w.e.f February 3 2015) ||(w.e.f February 3 2015) ||(w.e.f December 1 2014) |
|Remuneration in FY 2015 ||14.00 ||15.79 ||1.25 |
|Remuneration as % of revenue ||3.76% ||4.24% ||0.34% |
|Profit before tax (PBT) ||(57.15) ||(57.15) ||(57.15) |
|Remuneration as % of PBT ||Not computable due to loss ||Not computable due to loss ||Not computable due to loss |
*in order to show the comparison the annual remuneration of the KMP is consideredthough not appointed as KMP for the entire year.
(x) The key parameters for any variable component of remuneration availed by thedirectors:
No remuneration is paid to the Directors except for the sitting fees. Therefore thereare no variable components availed by any of the Directors of the Company.
xi) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:
There is no such employee receiving remuneration in excess of highest paid director asno remuneration is paid to the Directors except for the sitting fees.
(xii) Affirmation that the remuneration is as per the remuneration policy of thecompany.
The Company affirms that the remuneration is as per the Remuneration Policy of theCompany.
(xiii) The statement containing particulars of employees as required under Section197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:
There are no employees who were employed for a part of the financial year or throughoutthe financial a. receipt of remuneration which is not less than sixty lakhs rupees perannum; b. receipt of remuneration which is not less than five lakh rupees per month; c. inreceipt of remuneration which is in excess of that drawn by Managing Director/Whole-timeDirector/ Manager and holds by himself or along with his spouse and dependent children notless than two percent of the equity shares of the company.
Therefore the statement containing particulars of employees is not required to beattached.
21. DISCLOSURE REQUIREMENTS
As per Clause 49 of the Listing Agreement entered into with the Stock Exchange CorporateGovernance Report with Compliance Certificate Management Discussion and Analysisare attached thereonand which form part of the Annual report.
Details of the Familiarization Programme for the Independent Directors areavailable on the website of the Company (URL: http://www.acmfsl.com/cor_gov.htm) Policyfor determining
Material Subsidiaries of the Company is available on the website of the Company(URL: http:// www.acmfsl.com/cor_gov.htm) Policy on
Dealing with Related Party Transactions is available on the website of the Company(URL: http://www.acmfsl. com/cor_gov.htm) The Company has formulated and published a
Whistle Blower Policy to provide Vigil Mechanism for employees including Directorsof the Company to report genuine concerns. The provisions of this policy are in line withthe provisions of the Section 177(9) of the Act and the revised Clause 49 of the ListingAgreement with Stock Exchange (URL: http://www. acmfsl.com/cor_gov.htm)
22. DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
23 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
Conservation of Energy
The operations of your company involved low energy consumption. Energy conservationefforts are being pursued on a continuous basis. Close monitoring of power is maintainedto minimize wastage and facilitate optimum utilization of energy.
During the year under review there is no technology absorption. The company hasneither imported any technology nor incurred any expenditure on research and developmentof technology.
Foreign Exchange Earnings And Outgo
During the year under review there is no foreign exchange earnings or outgo
24. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this report.
25. ORDER PASSED BY REGULATOR OR COURTS OR TRIBUNALS
There are no orders passed by the regulator or courts or tribunals against the companyimpacting its status as going concern and on its operations.
The Directors thank the Companys stakeholders employees customers vendorsinvestors and banks for their continuous support.
The Directors also thank the Government of India the Governments of various states inIndia and concerned Government Departments / Agencies for their co-operation.
The Directors appreciate and value the contributions made by every member of the teamof Asit C. Mehta Financial Services
|29th May 2015 ||FOR AND ON BEHALF OF THE BOARD |
|Mumbai || |
| ||ASIT C. MEHTA |
| ||CHAIRMAN |
| ||DIN: 00169048 |