Corporate Merchant Bankers Ltd.
|BSE: 540199||Sector: Financials|
|NSE: N.A.||ISIN Code: INE850R01014|
|BSE 12:52 | 09 Aug||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 540199||Sector: Financials|
|NSE: N.A.||ISIN Code: INE850R01014|
|BSE 12:52 | 09 Aug||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
To the Members
We are pleased to present the 22nd Annual Report on our business andoperations for the year ended March 31 2016 of Corporate Merchant Bankers Limited("Company") along with the audited consolidated and standalone financialstatements for the year ended March 31 2016.
Company was incorporated under Companies Act 1956 on August 26 1994. The Company is aNon Deposit Accepting Non-Banking Finance Company ("NBFC") holding"Certificate of Registration no.: 14.00060 from the Reserve Bank of India("RBI") dated February 24 1998. Equity Shares of the Company are listed onMetropolitan Stock Exchange of India Limited (MSEI) (formerly known as MCX Stock ExchangeLimited) & Delhi Stock Exchange Limited (DSE) [DSE was derecognized by SEBI w.e.f.November 19 2015].
The Company has during the financial year 2015-16 made an application to BSE Limitedfor Direct Listing of its securities on the said Stock Exchange. Further the Company hasreceived In-Principal approval from BSE Limited vide letter no. DCS/DL/IZ/IP/328/2016-2017dated August 29 2016.
2. FINANCIAL SUMMARY/HIGH LIGHTS/PERFORMANCE OF THE COMPANY (STANDALONE/ CONSOLIDATED)
The Company's financial results are as under:
Results of operations
(Rs. In lakhs except EPS data)
3. BUSINESS PERFORMANCE
The Company is a Non-Banking Financial Company registered with the Reserve Bank ofIndia. There has been no change in the business of the Company during the year underreview.
The consolidated revenue of the Company for the year ended March 31 2016 stood at Rs.993000 as against Rs. 938239 for the previous year. The consolidated Net Profit forthe financial year ended March 31 2016 stood at Rs. 51541 as against the previous year'sNet Profit of Rs. 43 636 Lakhs. The Consolidated Reserves and Surplus as of March 312016 stood at Rs.542219 as against Rs. 490678 of the period as of March 31 2015. Theabove figures are extracted from the financial statements as per Indian Generally AcceptedAccounting Principles (GAAP).
4. STATE OF THE COMPANY'S AFFAIRS
Your Company continues to take effective steps in broad-basing its range of activitiesas the company is a NBFC and the main business of the Company is to make investment and togive loans & advances. The performance of the Company during the period under reviewhas been satisfactory.
5. TRANSFER TO RESERVES
As per provisions of Section 45-IC of Reserve Bank of India Act 1934 the NBFC Companyis required to transfer sum not less than twenty percent of its net profit every year.Therefore the Company has transferred Rs. 10308 being twenty percent of net profits forthe financial year to the Statutory Reserve.
In view of need to conserve the resources of the company for the future growth yourCompany's Directors do not recommend any dividend to the shareholders of the Company forthe Financial Year 2015-16.
7. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
In the opinion of the Board there has been no material changes and commitments ifany affecting the financial position of the Company which have occurred between the endof the financial year of the Company to which the financial statements relate and the dateof the report.
Details of Subsidiary Companies Joint Ventures and Associate Companies and theirfinancial position.
Your Company has 1 (one) subsidiary company for the financial year ended on March 312016. The information as required under the first proviso to sub-section (3) of Section129 is given in Form AOC-1 in Annexure I.
During the year M/s Solis Industries Limited has been incorporated as direct subsidiaryof M/s Corporate Merchant Bankers Limited.
9. SHARE CAPITAL
The paid up equity share capital as on March 31 2016 was Rs. 33000000. There was nopublic issue rights issue bonus issue or preferential issue etc. during the year. TheCompany has not issued shares with differential voting rights sweat equity shares nor hasit granted any stock options.
10. RISK MANAGEMENT POLICY
Risk Management Policy identifies communicate and manage risks across theorganization. The policy also ensures that responsibilities have been appropriatelydelegated for risk management. Key Risk and mitigation measures are provided in theManagement Discussion and Analysis annexed to the Annual Report.
11. INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place adequate internal financial controls across the organization.The same is subject to review periodically by the internal audit cell for itseffectiveness. During the year such controls were tested and no reportable materialweakness in the design or operation was observed.
12. VIGIL MECHANISM
The Company believes in the conduct of its affairs in a fair and transparent manner byadopting highest standards of professionalism honesty integrity and ethical behavior.The Company is committed to develop a culture in which every employee feels free to raiseconcerns about any poor or unacceptable practice and misconduct. In order to maintain thestandards has adopted lays down this Whistle Blower Policy to provide a framework topromote responsible and secure whistle blowing. The Board of Directors of your Company hasadopted the Vigil Mechanism and Whistle Blower Policy in compliance of Companies Act2013.
13. HUMAN RESOURCES
The Company seeks to nurture a mutually beneficial relationship with its employees.This relationship is characterized by the investment which the Company makes in itsemployees by providing challenging roles and assignments opportunities for personalgrowth relevant and timely performance support training and an enabling environment. TheCompany seeks to create a workplace which combines achievement orientation with care foremployees. The Company lists people' as one of its stated core values.
Your Company takes the pride in the Commitment Competence and dedication shown by itsemployees in all areas of business. Various HR initiatives are taken to align the HRPolicies to the growing requirements of the business.
The Company has complied and continues to comply with all the applicable regulationscirculars and guidelines issued by the Ministry of Corporate Affairs (MCA) StockExchange(s) Reserve Bank of India (RBI) Securities and Exchange Board of India (SEBI)etc.
The Company has complied with all applicable provisions of the Companies Act 1956 andthe Companies Act 2013 Listing Agreement executed with the Stock Exchanges SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and other applicablerules/regulations/guidelines issued from time to time.
During the year under review the Company has not accepted any deposits from the publicunder Section 73 of the Companies Act 2013 and rules made thereunder. There is nounclaimed or unpaid deposit lying with the Company.
16. RBI GUIDELINES
As a Non Deposit taking Non-Banking Finance Company your Company always aims tooperate in compliance with applicable RBI laws and regulations and employs its bestefforts towards achieving the same.
17. CHANGES IN DIRECTORS & KEY MANAGERIAL PERSONNEL
There had been some changes in the Directors and some appointments of Key ManagerialPersonnel were made to comply with the provisions of the Companies Act 2013. The saidchanges are as follows:
A. CHANGES IN DIRECTORS:
B. CHANGES IN KEY MANAGEMENT PERSONNEL:
As per Article 34(1) of the Articles of Association of the Company one third of theDirectors are liable to retire by rotation at the Annual General Meeting of the Company.Mr. Venkateshwar Parne Reddy Director is liable to retire by rotation.
18. EVALUATION OF DIRECTORS BOARD AND COMMITTEES
As required under the provisions of Section 134(3)(p) the Board has carried out anannual performance evaluation of its own performance and the manner in which suchperformance evaluation was carried out is as under:
The performance evaluation framework is in place and has been circulated to all thedirectors to seek their response on the evaluation of the entire Board and independentdirectors. The Nomination and Remuneration & Compensation Committee has carried outevaluation of director's performance.
The criteria of evaluation is exercise of responsibilities in a bona fide manner in theinterest of the Company striving to attend meetings of the Board of Directors/ Committeesof which he/she is a member/ general meetings participating constructively and activelyin the meetings of the Board /committees of the Board etc.
19. PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197(12) of the Companies Act 2013 read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given below:
i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:
*the expression" median" mean the numerical value separating the higher halfof a population from the lower half and the median of a finite list of numbers may befound by arranging all the observations from lowest value to highest value and picking themiddle one.
# Resigned during the year.
ii) The percentage increase in remuneration of each Director Chief ExecutiveOfficer Chief Financial Officer Company Secretary or Manager if any in the FinancialYear: Not
Applicable since all current KMPs and Directors to whom remuneration has been paid wasappointed during FY 2015-16 and there is no comparable date for previous financial yeari.e FY 2014-15.
iii) The percentage increase in the median remuneration of employees in thefinancial year: NIL
iv) the number of Permanent employees on the rolls of the company : 3 (three)
v) 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: Therewas no remuneration paid to employees. Hence the comparison between the two cannot bemade.
vi) the key parameters for any variable component of remuneration availed by thedirectors:
vii) Affirmation that the remuneration is as per the remuneration policy of thecompany: It is hereby affirmed that the remuneration paid during the year is as perthe Remuneration Policy of the Company.
DISCLOSURE UNDER RULE 5 (2) & (3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION ORMANAGERIAL PERSONNEL) RULES 2014
There is no directors/employees in the Company for which disclosure have to be madeunder the provisions of Rule 5 (2) & (3) of the Companies (Appointment andRemuneration or Managerial Personnel) Rules 2014.
A. Details of Top ten employees in terms of remuneration drawn:
B. Details of other employees under aforesaid Rules:
20. COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company's policy on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under sub section (3) of Section 178 of the Companies Act 2013 as isadopted by the Board.
The Company has adopted a comprehensive policy on Nomination and Remuneration ofDirectors on the Board. As per such policy candidates proposed to be appointed asDirectors on the Board shall be first reviewed by the Nomination and RemunerationCommittee in its duly convened
Meeting. The Nomination and Remuneration Committee shall formulate the criteria fordetermining the qualifications positive attributes and independence of a Director andrecommend to the Board a policy relating to the Remuneration for the Directors KeyManagerial Personnel and other employees. The Nomination and Remuneration Committee shallensure that
a) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors of the quality required to run the company successfully;
b) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
c) Remuneration to directors and senior management involves a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals. During the year under review none of the Directorsof the company receive any remuneration.
21. INDEPENDENT DIRECTORS
The Board has received the declaration from all the Independent Directors as per theSection 149(7) of the Companies Act 2013 and the Board is satisfied that all theIndependent Directors meet the criterion of independence as mentioned in Section 149(6) ofthe Companies Act 2013.
22. SEPARATE MEETING OF INDEPENDENT DIRECTORS
In due compliance with the provisions of the Companies Act 2013 read with the rulesmade there under a separate meeting of independent directors performance ofnon-independent directors performance of the board as a whole was evaluated taking intoaccount the views of directors and non-executive directors. The same was discussed in theboard meeting that followed the meeting of the independent directors at which theperformance of the Board its committees and individual directors was discussed.
23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE U/S 186
Corporate Merchant Bankers Limited is a registered NBFC and the main objects of theCompany is to provide loan guarantees and made investments. Hence the Company does notfall under the purview of the provisions of Section 186 of the Companies Act 2013 andrules made there under w.r.t its investment and lending activities. Details of LoansGuarantees and Investments are given in the notes to the Financial Statements.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Section 188 of the Companies Act 2013 read with therules made there under and SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015 the Company had not entered into any contract/arrangement/ transactionwith related parties which could be considered material. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Accordingly particulars of contracts orarrangements with related parties referred to in Section 188(1) of the Companies Act 2013along with the justification for entering into such contract or arrangement in Form AOC-2does not form part of the report.
25. MEETINGS OF THE BAORD
The agenda and Notice for the Meetings is prepared and circulated in advance to theDirectors. The Board of Directors of the Company met Ten (10) times during the financialyear 2015-16 on
30.04.2015 01.05.2015 29.05.2015 13.08.2015 13.11.2015 04.01.2016 08.01.201618.01.2016 02.02.2016 and 12.02.2016 Details of attendance of board meetings by directorsare as follows:
* resigned we.f 18.01.2016
The necessary quorum was present in all the meetings. The intervening gap between anytwo meetings was not more than one hundred and twenty days as prescribed by the CompaniesAct 2013.
26. COMMITTEES OF THE BOARD:
The Board has re-constituted the Audit Committee in accordance with the requirement ofCompanies Act 2013 and other applicable provisions. All members of Audit Committee arefinancially literate and 2 Directors out of 3 members have financial management expertise.As on the date of this report the Audit Committee comprises of the following Directors:
The Audit Committee met five (5) times during the financial year 2015-16 on 29.05.2016
13.08.2015 13.11.2015 02.02.2016 and 12.02.2016. Details of attendance of boardmeetings by directors are as follows:
* Audit Committee was reconstituted effective from January 18 2016 where Mr.Venkateshwar Parne Reddy and Ms. Vandana Gupta was inducted in place of Mr. Ramesh ChandJain and Mr. Jaswant Singh Yadav.
# Audit Committee was reconstituted effective from February 02 2016 where Mr.Naubahar Singh was inducted in place of Mr. Satyanarayana Kaduri.
During the year under review the Board accepted all the recommendations made by theAudit Committee of the Board.
NOMINATION AND REMUNERATION COMMITTEE:
The Company had re-constituted the Remuneration Committee (renamed as Nomination andRemuneration Committee)to decide and fix payment of remuneration and sitting fees to theDirectors of the Company as per provisions u/s 178 of the Companies Act 2013. Thiscommittee will look after the functions as enumerated u/s 178 of the Companies Act 2013.As on date this Committee comprises of the following Directors:
The Nomination and Remuneration Committee met three (3) times during the financial year201516 on 13.11.2015 08.01.2016 and 02.02.2016. Details of attendance of board meetingsby directors are as follows:
* Nomination and Remuneration Committee was reconstituted effective from January 182016 where Mr. Venkateshwar Parne Reddy and Ms. Vandana Gupta was inducted in place ofMr. Ramesh Chand Jain and Mr. Jaswant Singh Yadav.
# Nomination and Remuneration Committee was reconstituted effective from February 022016 where Mr. Naubahar Singh was inducted in place of Mr. Satyanarayana Kaduri.
STAKEHOLDER RELATIONSHIP COMMITTEE:
The Stakeholder Relationship Committee looks into the redressal of the shareholderscomplaints in respect of any matter including transfer of shares non -receipt of annualreport non -receipt of declared dividend etc. As on date this Committee comprises of thefollowing Directors:
The Stakeholder Relationship Committee met three (3) times during the financial year2015-16 on 12.10.2015 02.11.2015 and 14.12.2015 . Details of attendance of board meetingsby directors are as follows:
*Stakeholder Relationship Committee was reconstituted effective from January 18 2016where Mr. Venkateshwar Parne Reddy and Ms. Vandana Gupta was inducted in place of Mr.Ramesh Chand Jain and Mr. Jaswant Singh Yadav.
# Stakeholder Relationship Committee was reconstituted effective from February 022016 where Mr. Naubahar Singh was inducted in place of Mr. Satyanarayana Kaduri.
RISK MANAGEMENT COMMITTEE:
The Company had re-constituted the Risk Management Committee. As on date thisCommittee comprises of the following Directors:
Risk Management Committee not met during the financial year 2015-2016.
27. Auditors STATUTORY AUDITORS
Mr. Mulraj D Gala Chartered Accountants (Membership Number 041206) who are theFinancial Auditors of the Company hold office as financial auditors until the conclusionof the 25th Annual General Meeting of the Company. Their appointment is subjectto ratification by the members at the 22nd Annual general meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Secretarial Audit hasbeen carried out by M/s VCSR & Associates Practicing Company Secretaries and hisreport is annexed as Annexure II.
M/s. ARR & Co. Chartered Accountants had appointed by the Board of Directors ofthe Company to conduct the Internal Audit of the Company as per the provisions of theCompanies Act 2013 read with the Rules made there under.
28. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 is annexedherewith as Annexure III.
29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company primarily being an investment company and not involved in any industrial ormanufacturing activities the Company has no particulars to report regarding conservationof energy and technology absorption as required under section 134 of the Companies Act2013 and Rules made there under. During the year under review the Company does not haveany Foreign Exchange Earnings and outgo.
30. DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (5) OF THECOMPANIES ACT 2013
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 the Directors of your company confirm that:
a) In the preparation of the Annual Accounts for the financial year ended March 312016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
c) The Directors 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) The Directors have prepared the Annual Accounts for the financial year ended March31 2016 on a "going concern basis".
e) The Board of Directors have laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively.
f) The Board of Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
g) The Board of Directors have adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
31. CORPORATE GOVERNANCE
Since the paid- up capital of the Company is less than Rs. 10 Crores and Net worth isless than Rs. 25 Crores the provisions of the Corporate Governance as stipulated underRegulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are not applicable to the Company. However your Company has made every effort tocomply with the provisions of the Corporate Governance and to see that the interest of theShareholders and the Company are properly served. It has always been the Company'sendeavor to excel through better Corporate Governance and fair & transparentpractices many of which have already been in place even before they were mandated by thelaw of land.
The management of Company believes that it will further enhance the level of CorporateGovernance in the Company.
32. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to provisions of Section 135 of the Companies Act 2013 read with the rulesmade there under the criteria for companying with the CSR activity does not applicable tothe Company throughout the year.
33. DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules there under theCompany has not received any complaint of sexual harassment during the year under review.
34. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There has been no significant and material order passed by any regulator courts ortribunals impacting the going concern status and operations of the Company in future.
35. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a detailed Management Discussion and Analysis Report has been appendedseparately which forms part of this report and the Annual Report.
36. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
Your Directors take this opportunity to express the gratitude to all investorsclients vendors bankers Regulatory and Government authorities Stock Exchanges andbusiness associates for their cooperation encouragement and continued support extended tothe Company. Your Directors also wish to place on record their appreciation to theAssociates for their continuing support and unstinting efforts in ensuring an excellentall round operational performance at all levels.