Asit C Mehta Financial Services ltd.
|BSE: 530723||Sector: Financials|
|NSE: N.A.||ISIN Code: INE041B01014|
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Asit C Mehta Financial Services ltd. (ASITCMEHTAFIN) - Director Report
Company director report
Your Directors present the Thirty Third Annual Report and the Company's auditedfinancial statement for the financial year ended March 312017.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended March 312017 is summarizedbelow:
The consolidated figures include the figures of two subsidiaries for entire year.
In view of the losses the Directors do not recommend any dividend for the FinancialYear 2016-2017.
3. OPERATIONAL REVIEW/COMPANY'S PERFORMANCE
On a Standalone basis the gross earnings raised to Rs 652.44 lakhs from Rs. 339.51lakhs. The year ended with a loss after tax of Rs. 31.60 lakhs as compared to loss aftertax of Rs 229.03 lakhs in the previous year.
The Company has let out part of the Office premises on Lease/Leave and License basis toexternal companies including IClCl Bank Limited. The Company offered advisory andconsultancy services to certain clients and earned the fees aggregating to Rs 90.00 lakhsfrom Advisory and Consultancy Division.
On a consolidated basis the gross revenues raised at Rs 3941.76 lakhs as compared toRs Rs 3137.33 lakhs in the previous year and loss after tax was at Rs 375.43 lakhs asagainst Rs 654.54 lakhs in the previous year. The overall consolidated loss aggregated toRs. 247.64 lakhs (including share of loss from an Associate concern) as
against loss of442.85 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 reduced to Rs.336.71 Lakhs as compared toRs 368.81 lakhs in the previous year and the profit before depreciation and finance costwas reduced to Rs. 30.52 lakhs as compared to Rs 64.46 lakhs in the previous year. . Theoverall loss stood at Rs. 87.99 lakhs as against overall profit of Rs 6.48 lakhs in theprevious year.
4. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has three subsidiaries as on March 31 2017. 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 Company's subsidiaries in Form AOC-1 isattached 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 Company
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.
5. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2017 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
As on the date of this report Company's Board comprises of 6 (Six) Directors out ofwhich 3 (Three) are independent directors representing 50% of total strength of the Boardand remaining 3 (Three) are NonExecutive Directors (NEDs) represent 50% of the totalstrength including 1 (one) Woman Director.
b. Retirement by Rotation
In accordance with the provisions of the Act Mr. Asit C. Mehta Non-Executive Directorof the Company retires by rotation and being eligible has offered himself forre-appointment.
c. 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 IndependentDirectors at the 31st Annual General Meeting of the Company held on September 24 2015.The terms and conditions of appointment of Independent Directors are as per Schedule IV ofthe Act.
They have submitted a declaration that each of them meets the criteria of independenceas provided in Section 149(6) of the Act and Regulation 16 (b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as Independent Director during the year.
d. Board Effectiveness
I. Familiarisation Programme for the Independent Directors: In compliance with therequirement of SEBI LODR Regulations the Company has put in place a familiarisationprogramme for the Independent Directors to familiarise them with their role rights andresponsibility as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The details of the familiarisation programme areavailable on the website of the Company www.acmfsl.com .
ii. Evaluation of the performance of the Board its Committees and the Directors: TheBoard of Directors has carried out an annual evaluation of its own performance BoardCommittees 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:
b. Objectivity and Independence
c. Guidance and support in context of life stage of the Company;
d. Understanding of the Company's business;
e. Understanding and commitment to duties and responsibilities;
f. Willingness to devote the time needed for effective contribution to Company;
g. Participation in discussions in effective and constructive manner;
h. Responsiveness in approach;
i. 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
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. Pankaj Jeevanlal Parmar Manager
c. Ms. Meha Singh Sikarwar Company Secretary appointed w.e.f. May 27 2016
Criteria for selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior Leadership Positions: Your Company has laid down a well-definedcriteria for the selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior Leadership Positions. Directors' Remuneration Policy & Criteriafor matters under Section 178 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.
f. Policy on Directors' Appointment and Remuneration and Other Details
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Annual 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 2017 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 312017 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.
a. Board Meetings
Four 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.
b. Audit Committee
The Audit Committee comprises three members. The Chairman of the Committee is anIndependent Director. The Committee met four times during the year. Details of the roleand responsibilities of the Audit Committee the particulars of meetings held andattendance of the Members at such Meetings are given in the Corporate Governance Report.
9. 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.
a. Statutory Auditors
As per the provisions of Section 139 of the Companies Act 2013 the term of office ofM/s Manek & Associates (Firm Registration No 0126679W) Chartered Accountants asStatutory Auditors of the Company will conclude from the close of the forthcoming AnnualGeneral Meeting of the Company.
The Board of Directors places on record its appreciation for the services rendered byM/s Manek & Associates Chartered Accountants as the Statutory Auditors of theCompany.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s. Chandrakant & Sevantilal Chartered Accountants(Firm Registration No. 101675W) as the Statutory Auditors of the Company pursuant toSection 139 of the Companies Act 2013.
Members' attention is drawn to a Resolution proposing the appointment of M/s.Chandrakant & Sevantilal Chartered Accountants as Statutory Auditors of the Companywhich is included at Item No 3 of the Notice
convening the Annual General Meeting.
b. Secretarial Audit
The Company has appointed M/s Mehta & Mehta Company Secretaries to undertake theSecretarial Audit of the Company pursuant to the provisions of Section 204 of theCompanies Act 2013 and The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
11. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The Auditors' Report does not contain any qualifications reservations or adverseremarks.
The Secretarial Audit Report for the FY 2016-17 in Form MR 3 given by M/s. Mehta &Mehta Company Secretaries in Practice is attached as Annexure I with this report. TheReport does not contain any qualifications reservations or adverse remarks
12. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Amounts outstanding as at 31st March 2017
13. TRANSACTIONS WITH RELATED PARTIES
The Company has not entered into any material contracts with the related partiesduring the year 2016-17 and other contracts or arrangements are in the ordinary course ofbusiness and on an arm's length basis which were approved by the Audit Committee and theBoard from time to time. Therefore there are no particulars of contracts or arrangementswith related parties referred to in Section 188(1) of the Companies Act 2013 to disclosein the prescribed form AOC-2 and may be treated as not applicable.
14. 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.
15. 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 contractual temporary and trainee) are covered under this policy. Thefollowing is a summary of sexual harassment complaints received and disposed off duringthe Financial Year 2016-17:
No. of complaints received: NIL
No. of complaints disposed off: NIL
16. INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS
Pursuant to the notification issued by The Ministry of Corporate Affairs datedFebruary 16 2015 relating to the Companies (Indian Accounting Standard) Rules 2015 theCompany will adopt "IND AS" with effect from April 01 2017.
17. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of annual return is given inAnnexure II in the prescribed Form MGT-9 which forms part of this report.
18. 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 Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
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 remuneration of Ms. Purvi Ambani Chief FinancialOfficer of the Company to Rs. 18.86 Lakhs as compared to Rs. 18.02 Lakhs in the last year.
iii. The percentage increase in the median remuneration of employees in the financialyear:
There was an increase of 5.48% in median remuneration of employees in the financialyear.
Note that Salary of employees who were employed for less than 12 months is also takenin to consideration for above calculation.
iv. The number of permanent employees on the rolls of company:
The Company has 1 (One) permanent Employee on the rolls of Company as on 31st March2017 as compared to 4 (Four) permanent employees as on on 31st March 2016.
v. The explanation on the relationship between average increase in remuneration andcompany performance:
Employee received an annual increase of 6% based on individual performance. Theincrease in remuneration 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 individual's performance.
vi. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:
(Rs. in Lakhs)
*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
* As no trading was done as on 31.03.2017 therefore Market price of 30.03.2017 isdisclosed
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:
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 remuneration of Key Managerial Personnel against the performance ofthe company:
(Rs. in lakhs)
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 sixty lakhs 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.
19. DISCLOSURE REQUIREMENTS
As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 entered into with the stock exchange Corporate Governance Report withAuditors' Certificate thereon and Management Discussion and Analysis are attached whichform part of the Annual Report.
Details of the Familiarization Programme of the independent directors areavailable on the website of the Company.
Policy for determining Material Subsidiaries of the Company is available on thewebsite of the Company. (URL:http://www.acmfsl.com/pdf/Policies/Policyfor determination of material subsidiary.pdf)
Policy on Dealing with Related Party Transactions is available on the website ofthe Company.
The Company has formulated and published a Whistle Blower Policy to provideVigil Mechanism for employees including directors of the Company to report genuineconcerns. The provisions of this policy are in line with the provisions of the Section177(9) of the Act and Regulation 22 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015
20. 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.
21. 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.
Your Company has installed Roof-Top Solar PV system at the registered office of theCompany in March 2017. Installation of 25kw capacity of system will result in energysaving of 37500 kwh approx.
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.
22. 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.
23. 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 Company's employees customers vendors investors and academicinstitutions 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
Date: 20th May 2017 Place: Mumbai
ASIT C. MEHTA CHAIRMAN DIN:00169048