Your Directors are pleased to present the Twenty Ninth Annual Report together with theAudited Financial Statements of the Company for the financial year ended March 31 2017and the Auditors Report thereon.
|Financial Results || ||(Rs. In Lacs) |
|Particulars ||Financial Year ended March 31 2017 ||Financial Year ended March 31 2016 |
|Gross Income ||30.47 ||76.47 |
|Profit/ (Loss) before write off provisions & tax ||(5.82) ||36.42 |
|Tax adjustment for earlier years ||- ||- |
|Profit/ (Loss) after Tax ||(5.82) ||36.42 |
The Gross Income comprises of amount(s) received on recovery of delinquent assetsthrough settlement/ compromise/ legal action.
In view of losses suffered by the Company no dividend has been considered for theyear.
An amount of Rs. 146.21 Lacs has been paid to the Fixed Deposit holders during thefinancial year ended March 31 2017. As on the said date there is an unclaimed/ unpaidfixed deposit liability of Rs. 1132.57 Lacs.
Management Discussion and Analysis
(i) Industry Structure and Development & Opportunities and Threats
Non Banking Finance Companies (NBFC) sector in India is represented by a mix of a fewlarge companies with nationwide presence and a few small and medium sized companies withregion focus primarily engaged in hire purchase financing investments corporate loansIPO funding venture capital and other non-fund based activities. The Reserve Bank ofIndia (RBI) regulates and supervises these NBFCs.
The Company has surrendered its Certificate of registration and RBI also through itsOrder dated April 16 2016 has cancelled Companys Certificate Registration No- A-14.01690.
(ii) Opportunities and threats
The NBFCs are facing stiff competition from Banks and Financial Institutions due tothe ability of Banks & FIIs to raise a low cost fund which enables them toprovide funds at more favorable rates. More stringent capital adequacy norms have beenstipulated by RBI for NBFCs which results in inability to give cheaper finance.
(iii) Segment-wise or Product-wise Performance
The Company has been primarily engaged in the business of hire purchase leasing billdiscounting and non-fund based activities. Since the risk and returns in these businessesare similar therefore these are grouped as a single segment. This is in accordance withthe guiding principle provided in the Accounting Standard on
Segment Reporting (AS- 17) issued by The Institute of Chartered Accountants of India.
(iv) Future Outlook
The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. Your directors are exploring thepossibilities of venturing into new business areas.
(v) Risks and Concerns
High interest regime in the economy may act as a dampener for the financing business.There is also stiff competition due to entry of large players in the market.
(vi) Internal Control Systems and their adequacy
The Internal Control Systems are in place to serve the existing operations of theCompany.
(vii) Financial Performance
The loss for the year after write offs/ provisions etc. and tax amounts to Rs. 5.82Lacs.
(viii) Human Resource and Industrial Relations
The Company is having three employees as on the date of this report. Your Directorsrelation at all levels with employees were cordial.
Statements in this Management Discussion and Analysis section describing theCompanys objectives projections estimates and expectations may be forwardlooking statements within the meaning of applicable laws and regulations. Actualresults may differ substantially or materially from those expressed or implied. Importantdevelopments that could affect the Companys operations are significant changes inpolitical and economic environment in India tax laws RBI regulations exchange ratefluctuation and related costs.
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Pritam Narang Director retires by rotation at the ensuing AnnualGeneral Meeting of your Company and being eligible offers himself for re-appointment.
Your Directors recommend the re-appointment of Mr. Pritam Narang at the ensuing AnnualGeneral Meeting. Pursuant to the resignation of Mr. P.K. Marwah Manager of the Companyw.e.f. October 10 2016 Mr. Pritam Narang has been appointed as Whole-time Director ofthe Company w.e.f. April 26 2017. The Board places on record its appreciation for thevaluable guidance and services rendered by Mr. P.K. Marwah during his tenure with theCompany. Pursuant to the provisions of Section 149 and other applicable provisions of theAct your directors are seeking re-appointment of Mr. Rochak Puri and Ms. Preeti Chauhanas Independent Directors for a period of 5 years. The Company has received declarationsfrom all the Independent Directors of the Company confirming that they meet with criteriaof independence as prescribed under sub-section (6) of Section 149 of the Act and Listing
The policy for Appointment and Remuneration of Directors Key ManagerialPersonnel and Other Employees is attached as Annexure A and forms an integral partof this report.
The Company has devised the criteria for performance evaluation of IndependentDirectors Board Committees and other individual Directors which includes criteria forperformance evaluation of the non-executive directors.
Evaluation was done by the Board for its own performance and that of its Committees andindividual Directors.
The brief resume and other details relating to the Directors who are proposed to beappointed/ re-appointed as required to be disclosed under Listing Regulations is given inthe Annexure B.
The details of programme for familiarisation of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company www.escortsfinance.com.
Your Company reaffirms its commitment to the good corporate governance practices andhas adopted the Code of Conduct which has set out the systems processes and policyconforming to established standards. Pursuant to the Listing Regulations the CorporateGovernance Report and Auditors Certificate regarding compliance of conditions ofCorporate Governance are enclosed as Annexure B and forms an integral part of thisReport.
Indian Accounting Standard
The Ministry of Corporate Affairs (MCA) on February 16 2015 notified that IndianAccounting Standards (Ind AS) are applicable to certain classes of companies from April 12016 with a transition date of April 1 2015. Ind AS has replaced the previous Indian GAAPprescribed under Section 133 of the Companies Act 2013 ("the Act") read withRule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicable to the Company fromApril 1 2016. The reconciliations and descriptions of the effect of the transition fromprevious GAAP to Ind AS have been set out in Note 38 in the notes to accounts in thestandalone and consolidated financial statement.
Consolidated Financial Statements
The Consolidated Financial Statements in accordance with the Companies Act 2013 andIndian Accounting Standard (Ind AS)-110 applicable to the Consolidated FinancialStatements read with Ind AS-28 on Accounting for Investments in Associates and Ind AS-31on Financial Reporting of Interests in Joint Ventures issued by The Institute of CharteredAccountants of India have been prepared. The Audited Consolidated Financial Statementsalong with the Auditors Report thereon are annexed with this Report.
Subsidiaries Joint Ventures and Associate Companies
The statement containing salient features of financial statements of associatecompanies prepared in accordance with Section 129 of the Companies Act 2013 read withRule 5 of Companies (Accounts) Rules 2014 forms an integral part of this Report. TheConsolidated Financial Statements presented by the Company include the financial resultsof its associate company.
The Company will make available the Annual Accounts of its associate company andrelated information to the members of the Company who may be interested in obtaining thesame. The annual accounts of its associate company will also be kept open for inspectionat the Registered Office of the Company.
Auditors and Auditors Report Statutory Auditors
M/s. N.M. Raiji & Co. Chartered Accountants Delhi (Firm Registration No.108296W) Statutory Auditors of the Company hold office upto the conclusion of the ensuingAnnual General Meeting and are eligible for re-appointment. M/s. Kapish Jain &Associates Chartered Accountants New Delhi (Firm Registration No. 022743N) have showntheir interest to act as Statutory Auditors of the Company for a period of 5 years subjectto the ratification of their appointment at every AGM. confirmation The Company hasreceived letter of from M/s. Kapish Jain & Associates Chartered Accountants to theeffect that their appointment if made would be within the prescribed limits as specifiedunder Section 139 of the Companies Act 2013 and that they are not disqualified for suchappointment within the meaning of Section 141 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014.
Auditors Qualifications/ Observations and Management Comments Thereon
The qualifications/ observations made by the Statutory Auditors in the AuditorsReport are dealt with separately in the Notes to the Balance Sheet and the Statement ofProfit and Loss. Management response to the same is as under: Note 27: Completefacts have been disclosed in the note which is self-explanatory and do not call for anyfurther comments.
Note 31: Provision for dividend on preference shares could not be made in view ofsubstantial accumulated losses from earlier year.
Note 32: The Company had only three employees on its rolls at the end of thefinancial year. The gratuity liability is being provided on actual basis as per theprovisions of Payment of Gratuity Act 1972. Similarly leave encashment liability is alsoprovided on actual basis. The management feels that provision on actual basis is moreprudent than the actuarial estimate in view of only three employees on roll.
Management responses to the observations made by the Secretarial Auditors in theSecretarial Audit Report are dealt as under: a. Please refer to Note 27 of the Notes toAccounts forming part of Balance Sheet which is self-explanatory and does not call for anyfurther comments.
Directors Responsibility Statement
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
(i) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed alongwith proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the profitand loss of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the Directors have prepared the annual accounts for financial year ended March 312017 on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and (vi) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Particulars of Employees
In terms of provisions of Section 197(12) of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names of the employees in terms of remuneration drawn is available with the CompanySecretary. Having regard to to the provisions of Section 136(1) of the Act the AnnualReport excluding the aforesaid information is being sent to the members of the Company .Any member interested in obtaining such particulars may write to the Company Secretary ofthe Company and the same will be furnished on request.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as
Annexure C and forms an integral part of this Report.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are as follows:-
A. Conservation of Energy
Your Company being engaged in financing business and does not have any activityrelating to conservation of energy.
B. Technology absorption: N.A. C. Foreign exchange earnings and outgo
During the period under review there was no foreign exchange outflow from your Companyand it had no foreign exchange earnings.
Disclosures Meetings of the Board
Five meetings of the Board of Directors were held during the year. For further detailsplease refer Report on
Corporate Governance annexed as Annexure B to this report.
All the recommendations made by the Audit Committee were accepted by the Board.
For constitution and other details of the Audit Committee please refer Report onCorporate Governance annexed as
Annexure- B to this report.
Extracts of Annual Return
In terms of provisions of Section 92 of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 the extracts of Annual Return in Form MGT-9is enclosed as Annexure D and forms an integral part of this Report.
Particulars of Loans given Investments made Guarantees given and Securities provided
During the year under review no loan investment guarantees and securities has beenprovided.
Contracts and Arrangements with Related Parties
During the year the Company had not entered into any contract/ arrangement/transaction with related parties. The particulars of contracts and arrangement withrelated parties under section 188(1) in Form AOC-2 are enclosed as Annexure E.
The Policy on materiality of related party transactions and dealing with related partytransactions as provided by the
Board may be accesses on the Companys website at the link: www.escortsfinance.com.
Your directors draw attention of the members to Note 40 to the financial statementwhich sets out related party disclosures.
The Board of Directors of the Company had appointed M/s Jayant Gupta and AssociatesPracticing Company Secretaries to conduct secretarial audit of the Company for thefinancial year 2016-17. The Secretarial Audit Report for the financial year ended March31 2017 is enclosed as Annexure F and forms an integral part of this Report. Theobservations and comments given by the Secretarial Auditors in their report areself-explanatory and hence do not call for any further comments under Section 204(3) ofthe Companies Act 2013.
The Board has also re-appointed M/s Jayant Gupta and Associates Practicing CompanySecretaries to conduct secretarial audit of the Company for the financial year 2017-18.
Internal Financial Controls
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 Risk Management Committee which has been entrusted with the responsibility to assistthe Board in (a) overseeing and approving the Companys enterprise wide riskmanagement framework; and (b) overseeing that all the risks that the organisation facessuch as strategic financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks.
Your Directors wish to acknowledge and thank the co-operation and assistance extendedby the Banks Financial Institutions Government Agencies Customers and Depositors.
The Directors also wish to convey their deep appreciation for the contribution made bythe employees to the operations of the Company in particular those who continued with theCompany and extended their full support during this difficult period. We also convey ourthanks to our esteemed shareholders for their continued support and encouragement.
| ||For and on behalf of the Board of Directors || |
| ||Sd/- ||Sd/- |
| ||Pritam Narang ||Rochak Puri |
|Place: Faridabad ||Director ||Director |
|Dated: July 25 2017 ||DIN: 00982418 ||DIN: 00042536 |