The Members of
Banas Finance Limited
Your Directors have pleasure in presenting the 33rd Annual Report along withthe Audited Accounts for the financial year ended March 31 2016.
Summary of the Companys financial performance for F.Y. 2015-2016 as compared tothe previous financial year is given below:
(Figures in Lacs)
|Particulars ||F.Y. 2015 - 2016 ||F.Y. 2014 - 2015 |
|Total Revenue ||809.29 ||745.60 |
|Profit before Dep. & Int. ||(215.87) ||(39.52) |
|Depreciation ||- ||2.11 |
|Interest ||100.69 ||76.68 |
|Profit after Depreciation & Interest ||(316.57) ||(39.27) |
|Provision for Taxation ||- ||- |
|Provison for Tax (deferred) ||0.18 ||0.32 |
|Provision for Taxation for earlier year ||(13.00) ||(150.00) |
|Profit/ Loss after Tax ||(329.75) ||(191.04) |
|Balance carried to Balance Sheet ||(329.75) ||(191.04) |
The company is mainly engaged into business of and Finance and Investment. During theyear under review Companys total income has increased to Rs. 809.29/- Lacs from Rs.745.60/- Lacs as compared to previous financial year measuring 8.54%. The growthperformance for financial year 2015-16 was affected by global economic and financialchallenges all around the world including India. Henceforth every sector andcompanys performance and profitability suffered. The company has incurred net lossof Rs. 329.75 Lacs during the year as compared to 191.10 net losses in previous year. Themain reason for incurring such huge loss is mainly due to high administrative expensesduring the year.
The management of the Company hereby very optimistic regarding performance of theCompany in future and taking every steps and making every efforts to turn the Company into profitable organization
During the year the company incurred losses; your directors have not recommended anydividend on Equity Shares for the year under review.
Your Company has not accepted any deposits within the meaning of Section 73 (1) and 74of the Companies Act 2013 read together with the companies (Acceptance of Deposits)Rules 2014.
AMOUNTS TO BE TRANSFERRED TO RESERVES
In the view of continuous losses no fund was transferred to General Reserve andStatutory Reserves as per provision of Section 45 (i)(c) of the Reserve Bank of India Act1934.
BOARD OF DIRECTORS:
The Composition of the Board during the year as per the provisions of Regulation 17(1)of listing regulation read with the Companies Act 2013. During the period under reviewOn the recommendation of Nomination and Remuneration Committee your Board inducted Ms.Swati Shinde and Mr. Hardikkumar Bharatbhai Kabariya as an Additional Directors of theCompany in the category of Independent Director with effect from 22/09/2015 and 30/05/2016respectively in order to comply with the requirement of Section 149(1) of the CompaniesAct 2013. In terms of Section 161 of the Companies Act 2013 they will hold office up tothe date of the ensuing Annual General Meeting. The Company has received a notice inwriting along with deposit pursuant to Section 160 of Companies Act 2013 proposing theappointment of Ms. Swati Shinde and Mr. Hardikkumar Bharatbhai Kabariya Directors of theCompany. Your Board has recommended the appointment of Ms. Swati Shinde and Mr.Hardikkumar Bharatbhai Kabariya as Independent Directors of the Company for a period offive consecutive years up to the fifth consecutive Annual General Meeting of the Companynot liable to retire by rotation.
During the year Pursuant to Section 152 of the Companies Act 2013 Mr. Girraj KishorAgrawal Director retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Your Board has recommended his re-appointment.
During the year Mr. Dauji Laddoo Chaturvedi had resigned from the post of Directorshipw.e.f. 29/05/2015 and Mr. Girraj Kishor Agrawal resigned as a Chief Financial officer ofthe Company w.e.f 10/02/2016. The Board appreciate the contribution made by them.
Ms. Swati Shinde and Mr. Hardikkumar Bharatbhai Kabariya have given declarations thatthey continues to meet the criteria of independence as laid down under Section 149(6) ofthe Act and Regulation 16(1)(b) of the Listing Regulations.
As required under Regulation 36(3) of the listing Regulations with the stock exchangesthe information on the particulars of Directors proposed for appointment/re-appointmenthas been given in the notice of annual general meeting.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the CompaniesAct 2013 and based on the information provided by management your Directors statethat:
a) In the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed.
b) Directors have selected such Accounting policies applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the State of affairs of the corporation as at the end of March 31 2016 and of theprofit of the Company for the year ended on that date.
c) Director have taken Proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.
d) Directors have prepared the annual accounts on a 'going concern basis;.
e) Director have laid down internal financial controls commensurate with the size ofthe Company and that such financial controls were adequate and were operating effectively.
f) Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
DECLARATION OF INDEPENDENCE BY DIRECTORS:
The Independent Non-executive Directors of the Company viz. Mr. Ashwin JayantilalShah Ms. Seema Nirmalsingh Sidhu Ms. Swati Shinde and Mr. Hardikkumar BharatbhaiKabariya have affirmed that they continue to meet all the requirements specified underRegulation16(1)(b)of the listing regulations in respect of their position as an"Independent Director" of Banas Finance Limited.
POLICIES ON DIRECTORS APPOINTMENT AND REMUNERATION:
The Company adheres to the requirements prescribed in the Companies Act 2013 rulesand amendments made there under and SEBI regulations for the Appointment and remunerationof the Directors of the Company.
The policies of the Company on Directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub-section (3) of Section 178 of the Act is appended as AnnexureI to this Report.
MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWNPERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the performance evaluation of theIndependent Directors was completed.
The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. The Board of Directors expressed theirsatisfaction with the evaluation process.
Evaluation of the Board: The Board as a whole was evaluated on various parameterslike Board Composition & Quality Board Meetings and Procedures adherence to the Codeof Conduct etc. Based on each of the parameter the Board of Directors formed an opinionthat performance of Board as a whole has been outstanding.
Evaluation of the Committees: The Audit Committee Stakeholders RelationshipCommittee and Nomination and Remuneration Committee were evaluated on followingparameters:
Whether the composition of the Committee is in compliance with the legalrequirement;
Whether Committee takes effective and proactive measures to perform itsfunctions;
Committee meetings are conducted in a manner that encourages open communicationand meaningful participation of its members;
Committee meetings have been organized properly;
Adequacy on the frequency of the Committee meetings ;
Committee periodically reports to the Board along with its suggestions andrecommendations.
Evaluation of the Directors individually: Mr. Amit Gulecha Managing Director wasevaluated on various points related to Personal Qualities and adherence to Code of Conductetc.
Independent Directors: Mr. Ashwin Jayantilal Shah Ms. Seema Nirmalsingh Sidhu Ms.Swati Shinde and Mr. Hardikkumar Bharatbhai Kabariya were evaluated on parameters likeDirectors contributions at Board meetings willingness to devote time and effort tounderstand the Companyability to understand governance regulatory fiduciary and ethicalrequirements of the Board / Committee adherence to Code of Conduct and whether theIndependent Director is able to bring independent judgment during board deliberations onperformance.
M/s. Pravin Chandak & Associates Chartered Accountants having Registration No.116627W who are Statutory Auditors of the Company hold office up to the forthcomingAnnual General Meeting and are recommended for re-appointment to audit the accounts of theCompany for the Financial Year 2016-17. As required under the provisions of Section 139 ofthe Companies Act 2013 the Company has obtained written confirmation from M/s. PravinChandak & Associates that their appointment if made would be in conformity with thelimits specified in the said Section.
Observations made in the Auditors Report are self-explanatory and therefore donot call for any further comments under Section 134 (1) of the Companies Act 2013.
COMMENTS ON OBSERVATION MADE BY STATUTORY AUDITORS:
M/s. Pravin Chandak and Associates Practicing Chartered Accountant in his IndependentAuditor Report for financial year 2015-16 have drawn the attention of the management onsome Prudential Norms of NBFC which have been marked as qualification in his report. Inconnection with the same management here with give the explanation for the same asfollows:
The Management is of having view that that the Company is Small NBFC as compared toother giants in the market. Company had not accepted any deposits from public. The Companyis doing business out of its own fund. The Company operates its business with at most careand diligence. As far as making of Loan and Advances are concerned management grantsdemand loan only either to the parties known to the Company or by reference which aregoverned by the Board policies.
In some cases Loan Agreements or some KYC were not maintained. However considering theclose monitoring of Board no appraisal renewal policies and procedure has beenprescribed therefore and Directors are of a view that the Company has maintained all basicand necessary documents but according to the auditor the documents are notappropriate/enough. The Company is continuously making efforts to make KYC documents inline with auditor's directions for all future loan agreement and contracts to be entered.
The Loans and Advances granted by the Company is considered as good and recoverable anddo not required any provisions and same has been closely supervised and monitored onregular basis and proper internal audit and internal control is in place.
The management of the Company is quite confident that there is/was no NPA. The Companygrants unsecured loan either to the parties to whom Company knows personally or to theparties whose reference has been received from some parties with whom Company hasalready done the business. Though the repayment of the loan and interest there on mighthave been delayed some time by the parties but Company do receive the payment on laterdate.
As far as contingent liability of Rs. 88164280/- u/s 147 of Income Tax Act 1961 isconcered It is a matter of fact that the demand was raised by the jurisdictionalassessing officer u/s 147 read with section 143(3) of the Income Tax Act 1961 for incomeescaping assessment conducted by the Income Tax Authorities for the Assessment Year2007-08. However the contigent liability for the same is not provided as the managementfeels that the demand raised is likely to be either deleted or substantially reduced asthe company has filed appeal in response to the demand raised by the Assessing Officer.
As far as appropriateness of internal control system is concerned management is havingviews that the company has effective and sufficient internal control system in place forgranting loans and over purchase and sales. The management grants demand loan only eitherto the parties known to the Company or by references which are governed by the Boardpolicies. The Loan and Advances granted by the Company is cosidered as good andrecoverable and do not required any significant provisions and same has been closelysupervised and monitered on regular basis therefore no appraisal renewal Policiesprocedures committee or documents have been prescribed and executed. It's difficult toestablish any standard or fixed policy and procedure for granting loans as it dependsupon emergency of funds and other requirements of the clients.
Pursuant to the requirements of Section 204(1) of the Act and Rule 9 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P.D. Pandya & Associates Company Secretary in Practice to conduct theSecretarial Audit for the financial year 2015-16. The Secretarial Audit Report as receivedfrom M/s. P.D. Pandya & Associates is appended to this Report as Annexure II.
COMMENTS ON OBSERVATION AND QUALIFICATION MADE BY SECREATARIRAL AUDITORS:
M/s. P.D. Pandya and Associates Company Secretary in Practice in his SecretarialAudit Report for financial year 2015-16 have drawn the attention of the management on somethe non-compliances which have been marked as qualification in his report. In connectionwith the same management herewith give the explanation for the same as follows:
Further inadvertantly in some instatnce company failed to file form MGT-10 with ROCwith respect to change in shareholding more than 2% of promoter and top 10 shareholders.However Company has filed the said form for every changes made for promoters holding. TheCompany ensures that in future same mistake would not be repeated.
The Company is not registered under Maharashtra State Tax on Professions Tradescallings and Employments Tax Act 1975 (Profession Tax Act). The Company will soon obtainvalid Profession Tax number and will comply the same in future.
As far as provisions of prudential norms issued by Reserve Bank of India forNon-Banking Financial (Non - Deposit Accepting or Holding) and maintenance of Know YourCustomer' (KYC) is concerned explanation is already given above.
NUMBER OF MEETINGS OF THE BOARD:
The details of the number of meetings of the Board held during the Financial Year2015-16 forms part of the Corporate Governance Report.
COMMITTEES OF THE BOARD:
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
No material changes and commitments affecting the financial position of the Companyoccurred during Financial Year 201516 till the date of this report. Further there was nochange in the nature of business of the Company.
SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANIES:
During the year no company has become or ceased to be a subsidiary joint venture orassociate of the Company.
REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS:
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI.
In compliance with Regulation 34 and Schedule V of SEBI (LODR) Regulations 2015 reporton the Corporate Governance along with a certificate from the Statutory Auditors of theCompany on compliance with the provisions is annexed and forms part of the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC - 2 are appended as Annexure III.
EXTRACT OF ANNUAL RETURN:
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act readwith Rule 12 of Companies (Management and Administration) Rules 2014 an extract ofAnnual Return in prescribed Form MGT-9 is given in the Report as Annexure IV.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION:
In terms of the provisions of Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementcontaining the disclosures pertaining to remuneration and other details as required underthe Act and the above Rules are provided in the Annual Report. The disclosures asspecified under Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 have been appended to this Report as Annexure V.
No postal ballot was held during the year 2015-2016.
RISK MANAGEMENT AND INTERNAL CONTROLS:
The Company has the risk management and internal control framework in placecommensurate with the size of the Company. However Company is trying to strengthen thesame. The details of the risks faced by the Company and the mitigation thereof arediscussed in detail in the Management Discussion and Analysis report that forms part ofthe Annual Report.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals:
During the year under report there were no significant material orders passed by theRegulators/ Courts/ Tribunals impacting the going concern status and Company's operationsin future.
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The Company being a non-banking finance company (NBFC) does not have anymanufacturing activity. The directors therefore have nothing to report on 'conservationof energy and technology absorption.
MEMBER OF CREDIT RATING AGENCY:
During the year under review your company has taken the membership from Crif High MarkCredit Information Services Pvt. Ltd. Equifax Credit Information Services Pvt Ltd andExperian Credit Information Company of India Pvt. Ltd.
There is no inflow and outflow of Foreign Exchange.
LISTING OF SHARES:
Equity shares of your Company are listed on Bombay Stock Exchange only and the Companyhas paid the necessary Listing fees for the year 2015 - 2016. The Company has executed anew listing agreement with the Bombay Stock Exchange Pursuant to SEBI (LODR) Regulations2015
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has established a vigil mechanism to provide appropriate avenues to theDirectors and employees to bring to the attention of the Management the concerns aboutbehavior of employees that raise concerns including fraud by using the mechanism providedin the Whistle Blower Policy. The Whistle Blower Policy is hosted on companyswebsite atwww.banasfinance.files.wordpress.com/2016/08/whistle_blower_policy_banas_finance.pdf
During the financial year 2015-16 no cases under this mechanism were reported in theCompany and any of its subsidiaries/ associates.
POLICY FOR PREVENTION. PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN ATWORKPLACE:
The company has framed policy in accordance with The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
During the financial year 2015-16 no cases in the nature of sexual harassment werereported at any workplace of the company.
CEO AND CFO CERTIFICATION:
The Chief Executive Officer and Chief Financial Officer Certification as required underRegulation 17(8) read with Part B of Schedule II of the SEBI(LODR) Regulation2015 havebeen appended to this report in Annexure VI.
The Board of Directors wishes to express sincere thanks to Bankers Shareholdersclients Financial Institutions customers suppliers and employees of Companies forextending support during the year
FOR & ON BEHALF OF THE BOARD
|Sd/- ||Sd/- |
|Seema Sidhu ||Girraj Kishor Agrawal |
|(Director) ||(Director) |
|Place: Mumbai || |
|Date: 13/08/2016 || |
POLICY ON SELECTION & APPOINTMENT OF DIRECTORS
Pursuant to the provisions of Section 178 of the Companies Act 2013 (the Act) theNomination and Remuneration Committee of a company is required formulate the criteria fordetermining the qualifications positive attributes and independence of a directorproposed to be appointed as a director on the board of the company. This Policy documentrecords the criteria for selection and appointment of directors on the Board of theCompany.
This Policy is applicable to selection and appointment of directors on the Board of theCompany.
Criteria for selection of Directors:
The Nomination and Remuneration Committee ('the Committee) of the Board of theCompany to keep the following criteria in mind while assessing the suitability of anindividual as a director on the Board of the Company:
a) Demonstration of independence integrity high personal and professional ethics;
b) Ability and willingness to commit sufficient time to the responsibilities as a Boardmember;
c) Understanding of the Companys / Groups business and related industry;
d) General understanding of marketing finance and other disciplines relevant to thebusiness of the Company/ Group; Educational and professional background - professionalqualification and/or experience of having run a business at senior management and decisionmaking level;
e) Age giving sufficient experience as well as length of service available;
f) Ability to assessment the conflict of interest if any;
g) Personal accomplishments and ability to influence decisions.
The above are the broad parameters for assessing the candidates suitability. TheCommittee has the discretion to apply additional or different criteria as it may deem fit.The Committee shall assist the Board in ensuring Board nomination process with thediversity of gender thought experience knowledge and perspective in the Board.
The Committee may also consider the contributions that a board candidate can beexpected to make to the collective functioning of the Board based upon the totality of thecandidates credentials experience and expertise the composition of the Board atthe time and other relevant circumstances. The Committee will also keep in mindregulatory requirements in this regard.
An Independent Director can hold office for a term up to five consecutive years on theBoard of the Company and he is eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Boards report.
No Independent Director can hold office for more than two consecutive terms of fiveyears but such Independent Director is eligible for appointment after expiry of threeyears of ceasing to become an Independent Director. Provided that an Independent Directorshall not during the said period of three years be appointed in or be associated withthe Company in any other capacity either directly or indirectly.
The Company may appoint or re-appoint any person as the Managing Director and/orWhole-time Director for a term not exceeding five years at a time. Further they shall notbe reappointed earlier than one year before the expiry of their term.
Persons to be considered for appointment as directors are selected by the Nominationand Remuneration Committee in accordance with the policies and principles above and underthe Act and the Listing Agreement. The invitation to join the Board may be extended by theChairman of the Board.
This Remuneration Policy (Policy) of Banas Finance Limited has been formulated for itsdirectors key managerial personnel and other employees keeping in view the followingobjectives:
1. Ensuring that the level and composition of remuneration is reasonable and sufficientto attract retain and motivate to run the company successfully.
2. Ensuring that relationship of remuneration to performance is clear and meets theperformance benchmarks.
3. Ensuring that remuneration involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of thecompany and its goals.
4. The Policy is in compliance with Section 178(3) and Section 178(4) of the CompaniesAct 2013 and Regulation 19(4) read with Part D of Schedule II of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the "Listing Regulations").
Scope of policy:
The Policy applies to all directors key managerial personnel and other employees.
The Board on the recommendation of the Nomination and Remuneration Committee(NRC) shall review and approve the remuneration payable to the Executive Directors of theCompany within the overall limits approved by the shareholders.
The Board on the recommendation of the NRC Committee shall also review andapprove the remuneration payable to the other Key Managerial Personnel of the Company.
The remuneration structure of the Executive Directors and other Key ManagerialPersonnel shall include the following components:
a. Total Fixed Cost: This includes base salary other allowances perquisites andretirement benefits.
b. Variable Cost: This includes incentives / performance bonus linked to Companyand individual performance.
c. The sum total of the Total Fixed Cost and Variable Cost is called the Cost toCompany in the remuneration package.
Remuneration to Non-Executive Directors shall be entitled to sitting fees for attendingthe meetings of the Board and the Committees thereof.
Remuneration to other employees shall be assigned grades according to theirqualifications and work experience competencies as well as their roles andresponsibilities in the organization Individual remuneration shall be determined withinthe appropriate grade and shall be based on various factors such as job profile skillsets seniority experience and prevailing remuneration levels for equivalent jobs.
Remuneration is annually reviewed for the Key Managerial Personnel and other employeeswho are eligible for compensation review keeping in view the remuneration objectives.