Your Directors are pleased to present the Thirty Second Annual Report and theCompanys audited financial statement for the financial year ended March 31 2016.
1. FINANCIAL RESULTS
The Companys financial performance for the year ended March 31 2016 issummarized below:
|Particulars ||Standalone ||Consolidated |
| ||(Rs. In lakhs) ||(Rs. In lakhs) |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Total Revenue ||339.51 ||372.41 ||3137.33 ||1435.69 |
|Profit before Interest Depreciation & Tax ||136.42 ||226.44 ||130.44 ||256.21 |
|Less: Interest ||333.87 ||238.02 ||638.80 ||376.72 |
|Less: Depreciation ||45.48 ||45.57 ||157.83 ||113.17 |
|Profit/ (Loss) Before Tax ||(242.93) ||(57.15) ||(666.19) ||(233.68) |
|Tax Expenses || || || || |
|Current Tax ||- ||- ||- ||- |
|Deferred Tax ||14.01 ||14.78 ||(23.35) ||23.48 |
|Prior Period tax ||(0.11) ||- ||35.00 ||(10.68) |
|Net Profit/ (Loss) after Tax ||(229.03) ||(42.37) ||(654.54) ||(220.88) |
|Profit / (Loss) of Shares in Associate Concern ||- ||- ||- ||- |
|Minority Interest ||- ||- ||211.69 ||17.73 |
|Add: Amount brought forward from Last Year ||- ||- ||- ||- |
|Less: Appropriations ||- ||- ||- ||- |
|Proposed Dividend ||- ||- ||- ||- |
|Tax on Proposed Dividend ||- ||- ||- ||- |
|Transfer to General Reserve ||- ||- ||- ||- |
|Balance carried to Balance Sheet ||(229.03) ||(42.37) ||(442.85) ||(238.61) |
|Paid up Equity Share Capital ||49.52 ||49.52 ||49.52 ||49.52 |
|EPS (Equity Shares of Rs. 10/- each) Basic & Diluted (in Rs.) ||(4.62) ||(0.86) ||(8.94) ||(4.82) |
the consolidated figures of 2015-16 includes the figures of two subsidiaries for entireyear where as the consolidated figures of 2014-15 includes the figures for 3.5 months onlyof one subsidiary (ACMIIL).
In view of the losses the Directors do not recommend any dividend for the FinancialYear 2015-2016.
3. OPERATIONAL REVIEW/COMPANYS PERFORMANCE
On a Standalone basis the gross earnings dropped to Rs.339.51 lakhs from Rs.372.41lakhs. The year ended with a loss after tax of Rs. 229.03 lakhs as compared to loss ofRs.42.37 lakhs in the previous year.
The Company has let out part of the Office premises on Leave and License basis toexternal companies including ICICI Bank. The Company offered advisory and consultancyservices to certain clients and earned the fees aggregating to Rs.35.53 lakhs fromAdvisory and Consultancy Division.
On a consolidated basis the gross revenues were at Rs.3137.33 lakhs as compared toRs.1435.69 lakhs in the previous year and loss after tax was at Rs.654.54 lakhs asagainst loss of Rs. 220.88 lakhs in the previous year. The overall consolidated lossaggregated to Rs.442.85 lakhs (including share of loss from an Associate concern) asagainst loss of Rs. 238.61 lakhs in the previous year (including share of loss from anAssociate concern)
Nucleus IT Enabled Services Ltd. a wholly-owned subsidiary of the company engaged into ITeS services and Income from Operations was increased to Rs. 368.81 and the profitbefore depreciation and finance cost was increased to Rs. 64.23 lakhs as against loss ofRs. 120.52 lakhs in the previous year. The overall profit stood at Rs.6.48 lakhs asagainst overall loss of Rs.214.00 lakhs in the previous year.
4. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has three subsidiaries as on March 31 2016. 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.
Asit C Mehta Investment Interrmediates Limited (ACMIIL) is a subsidiary of the Companypursuant to section 2(87) of the Act and material non-listed Indian subsidiary of theCompany as per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As Asit C. Mehta Comdex Services DMCC a company incorporated in Dubai is the whollyowned subsidiary of ACMIIL it becomes the subsidiary of the Company under section 2(87)of the Act.
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.
Your Company has formulated and adopted a "Policy for determining MaterialSubsidiaries" so that your company could identify such subsidiaries and formulategovernance framework for them. The same is also available on the website of the Companywww.acmfsl.com.
Pursuant to the provisions of section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.
The financial statement of all the subsidiaries of the Company including Asit C. MehtaComdex Services DMCC has been consolidated with the Companys financial statementsunlike last year when the financial statements of Asit C. Mehta Comdex Services DMCC hasnot been consolidated with the Companys financial statements pursuant to Rule 6 ofCompanies (Accounts) Rules 2015 which gives an exemption with respect to consolidationof the financial statement of subsidiary or subsidiaries incorporated outside India onlyfor the financial year commencing on or after 1st April 2014.
5. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2016 was Rs.49525600/- dividedinto 4952560 equity shares of Rs. 10/- each. There is no change in Equity share Capitalof the Company during the year.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL a. Directors
As on the date of this report Companys Board comprises of 6 (Six) Directors outof which 3 (Three) independent directors representing 50% of total strength of the Boardand remaining 3 (Three) are Non-Executive Directors (NEDs) representing 50% of the totalstrength including 1 (one) Woman Director.
b. Retirement by Rotation
In accordance with the provisions of the Act Mr. Kirit H. Vora Non-Executive Directorof the Company retires by rotation and being eligible has offered himself forre-appointment.
c. Declaration by Independent Directors
Pursuant to the provisions of Section 149 of the Act Dr. Radha Krishna Murthy and Mr.Pundarik Sanyal were appointed as Independent Directors at the 30th Annual General Meetingof the Company held on September 26 2014 and Mr. Vjay Ladha was appointed as IndependentDirector at the 31st Annual General Meeting of the Company held on September 24 2015. Theterms and conditions of appointment of Independent Directors are as per Schedule IV of theAct. They have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Act and Regulation 16 (b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.and there has been nochange in the circumstances which may affect their status as Independent Director duringthe year.
d. Board Effectiveness:
a) Familiarisation Programme for the Independent Directors: In compliance with therequirement of SEBI LODR
Regulations the Company has put in place a familiarisation programme for theIndependent Directors to familiarise them with their role rights and responsibilities asDirectors the working of the Company nature of the industry in which the Companyoperates business model etc. The details of the familiarisation programme is available onthe website of the Company www.acmfsl.com.
b) Evaluation of the performance of the Board its Committees and the Directors:Pursuant to the provisions of the Act and the SEBI LODR Regulations the Board has carriedout an annual evaluation of its own performance.
The performance evaluation of all the independent directors have been done by theentire Board excluding the director being evaluated. On the basis of performanceevaluation done by the Board determines whether to extend or continue their terms ofappointment whenever the respective term expires.
The directors expressed their satisfaction with the evaluation process.
e. Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Act read with the Rules framedthereunder:
a) Ms. Purvi Ramesh Ambani Chief Financial Officer (CFO); b) Mr. Stanley SantmayorManager resigned w.e.f. 31st August 2015. c) Mr. Pankaj Jeevanlal Parmar appointed asManager of the Company w.e.f. 10th February 2016. d) Mr. Raj Gandhi Company Secretaryresigned w.e.f. 31st May 2015. e) Ms. Kavita Shah Company Secretary appointed w.e.f. 1stJune 2015 and she resigned w.e.f. 15th February 2016.
Criteria for selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior Leadership Positions:
Your Company has laid down a well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and Senior Leadership Positions.Directors Remuneration Policy & Criteria for matters under Section 178 of theCompanies Act 2013. Information regarding Directors Remuneration Policy &Criteria for determining qualifications positive attributes independence of a directorand other matters provided under sub-section (3) of Section 178 of the Act are provided inthe section of Corporate Governance Report
7. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors statesthat:
a. in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards have been followed along with proper explanation and thereare no material departures from the same.
b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent to give a true and fair view ofthe state of affairs of the Company at the end of the financial year March 31 2016 and ofthe profit and loss of the Company for that period;
c. they have 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. 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 andthat such internal financial controls are adequate and are operating effectively; and
f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
8. MEETINGS OF THE BOARD
Five meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.
9. 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 SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.
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.
10. 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.
11. 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.
12. 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 0126679W) Chartered Accountants wereappointed as Statutory Auditors of the Company from the conclusion of the 30th AnnualGeneral Meeting (AGM) of the Company held on September 26 2014 till the conclusion of the33rd AGM to be held in the year 2017 subject to ratification of their appointment atevery AGM.
Accordingly a resolution seeking Members ratification for the re-appointment of M/sManek & Associates (Firm Registration No 0126679W) Chartered Accountants as theStatutory Auditors of the Company for the remaining tenure is placed before the members inthe ensuing Annual General Meeting.
The Audit Committee and Board have reviewed their eligibility criteria as laid downunder Section 141 of the Companies Act 2013 and recommended the ratification of theirre-appointment as Statutory Auditors for the remaining tenure.
14. AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT
The Auditors Report does not contain any qualifications reservations or adverseremarks.
Pursuant to Section 204 of the Companies Act 2013 and Rules thereunder the Companyhad appointed M/s Mehta & Mehta Company Secretaries to undertake the SecretarialAudit of the Company. The Secretarial Audit Report for the FY 2015-16 in Form MR 3 givenby M/s. Mehta & Mehta Company Secretaries in practice is attached as Annexure Iwith this report. The Report does not contain any qualifications reservations or adverseremarks
15. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Amounts outstanding as at 31st March 2016
(Rs. in lakhs)
|Particulars ||Amount |
|Loans given ||29.69 |
|Guarantees given ||1345.00 |
|Investments made ||1546.57 |
|Name of Entity ||Relation ||Amount (in lakhs) ||Particulars of Loan/Guarantee/ Investments ||Purpose |
|Nucleus IT Enabled ||Wholly Owned Subsidiary ||29.69* ||Loan ||Business Purpose |
|Services Ltd.(NITES) || || || || |
|Asit C Mehta Investment Interrmediates Limited (ACMIIL) ||Subsidiary ||500.00 ||Guarantee ||Business Purpose |
|Asit C. Mehta Investment Interrmediates Ltd. (ACMIIL) ||Subsidiary ||845.00 ||Guarantee ||Business Purpose |
|Asit C Mehta Investment Interrmediates Limited (ACMIIL) ||Subsidiary ||1246.57 ||Investments ||Investment in Equity Shares of the company |
|Nucleus IT Enabled Services Limited (NITES) ||Wholly Owned Subsidiary ||300.00 ||Investments ||Investment in Equity Shares of the company |
*Including Interest on Loan Rs.3.35 Lacs
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 and do not attract provisions of Section 188 of the Act. The Company hasentered into material contracts with the related parties under SEBI LODR Regulationsduring the year 2015-16 and other contracts or arrangement is in the ordinary course ofbusiness and on arms length basis which were approved by the Audit Committee and theBoard from time to time. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3) (h) of the Companies Act 2013 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 2015-16:
No. of complaints 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 Manager of the Company .However there is increase in the remunaration of Ms. Purvi Ambani Chief FinancialOfficer of the Company to Rs. 18.02 Lakhs as compared to Rs. 17.12 Lakhs in the last year.
iii) The percentage change in the median remuneration of employees in the financialyear:
There was a decrease of 20.03% in median remuneration of employees in the financialyear.
iv) The number of permanent employees on the rolls of company:
The Company has 5 (Five) permanent Employees on the rolls of Company as on 31st March2016 as compared to 4 (Four) permanent employees as on 31st March 2015.
v) The explanation on the relationship between average increase in remuneration andcompany performance:
On an average employees received an annual increase of 8%-10%. The individualincrement varied from 8% to 10% based on individual performance. The increase inremuneration is in line with the market trends in the country.
In order to ensure that remuneration reflects Company performance the performance payis also linked to organization performance apart from an individuals performance.
vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:
(Rs. in lakhs)
|Aggregate remuneration of Key Managerial Personal ||25.54 |
|Revenue ||339.50 |
|Remunerations of KMP ( as % of above) ||7.52 |
|Profit / Loss before tax ||(242.93) |
|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 ratio asat the closing date of the current financial year and previous financial year and (Rs. inlakhs)
|Particulars ||March 312016 ||March 31 2015 ||% Change |
|Market Capitalisation || || || |
|(No. of Shares X Market price) ||1220.80 ||2104.84 ||(42.00) |
|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: (In Rs.)
|Particulars ||March 2016 ||24th April 1995 (IPO) ||% Change |
|Market price (BSE) ||24.65 ||35.00 ||(29.57) |
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: (Rs. in lakhs)
|Name of Entity ||Mr. Stanly Santamayor Manager ||Mr. Pankaj J. Parmar Manager ||Ms. Purvi Ambani Chief Financial Officer ||Mr. Raj Gandhi Company Secretary ||Ms. Kavita Shah Company Secretary |
|Remuneration in FY 2016 ||14.00 ||-- ||16.54 ||1.26 ||1.26 |
|Remuneration as % of revenue ||4.12 ||-- ||4.87 ||0.37 ||0.37 |
|Profit before tax (PBT) ||(242.93) ||(242.93) ||(242.93) ||(242.93) ||(242.93) |
|Remuneration as % of PBT ||Not computable due to loss ||Not computable due to loss ||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:
The Directors of the Company are not paid any remuneration except the sitting feestherefore there is no highest paid director in the Company.
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 year and are in: a. receipt of remuneration which was not less than sixtylakhs per annum ; b. five lakh rupees per month;
c. in receipt of remuneration which is in excess of that drawn by ManagingDirector/Whole-time Director/ Manager and holds by himself or along with his spouse anddependent children two percent or more of the equity shares of the company.
Therefore the statement containing particulars of employees is not required to beattached.
21. DISCLOSURE REQUIREMENTS
As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 entered into with the stock exchange Corporate Governance Reportwith Auditors Certificate thereon and Management Discussion and Analysis areattached which form part of the Annual Report.
Details of the Familiarization Programme of the independent directors areavailable on the website of the Company.(URL:http://www.acmfsl.com/pdf/Policies/Familiarisation_programme_for_Independent_Directors.pdf
Policy for determining Material Subsidiaries of the Company is available on thewebsite of the Company.(URL:http://www.acmfsl.com/pdf/Policies/Policy_for_determination_of_material_subsidiary.pdf)
Policy on Dealing with Related Party Transactions is available on the website ofthe Company. (URL:http://www.acmfsl.com/pdf/Policies/Related_Party_Transactions_Policy.pdf )
The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including directors of the Company to report genuine concerns.The provisions of this policy are in line with the provisions of the Section
177(9) of the Act and Regulation 22 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 (URL:http://www.acmfsl.com/pdf/Policies/Whistle_Blower_Policy.pdf )
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 AND OUTGO
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 Material orders passed by the regulator or courts or tribunals against thecompany impacting its status as going concern and on its operations.
The Directors thank the Companys employees customers vendors investors andacademic institutions 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 Ltd.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||ASIT C. MEHTA |
|27th May 2016 ||CHAIRMAN |
|Mumbai ||DIN: 00169048 |