Gilada Finance & Investments Ltd.
|BSE: 538788||Sector: Financials|
|NSE: N.A.||ISIN Code: INE918C01011|
|BSE 13:24 | 23 Mar||30.55||
|NSE 05:30 | 01 Jan||Gilada Finance & Investments Ltd|
Gilada Finance & Investments Ltd. (GILADAFINANCE) - Director Report
Company director report
Your Directors have pleasure in presenting their 23rd Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 312017.
1. FINANCIAL PERFORMANCE OF THE COMPANY
The Board's Report shall be prepared based on the stand alone financial statements ofthe company.
2. BUSINESS OVERVIEW:
Your Company's revenue from operations increased to Rs.25114077.25 in the year2016-2017 from Rs.20662937.50 in the previous year at growth rate about 21.54%.Further during the year under review your Company has earned a net profit after taxationof Rs.9111918.51/- as compared to Rs. 8162031.43/- in the previous year.
Your Directors are confident of further improving the performance and growth of theCompany in the ensuing years to face new challenges and competitive environment.YourCompany will respond to the competitive challenges by enhancing customer focus bybuilding more efficient network by ensuring adequate preparedness to take maximumadvantage of the opportunities and aggressively pursuing them.
3. TRANSFER TO RESERVES:
Your Company has transferred a sum of Rs.1822384.00 to statutory Reserve as requiredunder the Reserve Bank of India Act 1934. The Company has not transferred any amount toGeneral Reserve during the year under review.
Your directors do not propose any dividend for the year ended 31st March 2017.
5. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT i.e. AFTER 31ST MARCH 2017BEFORE DATE OF SIGNATURE OF DIRECTORS' REPORT:
There have been no material changes and commitments that affect the financial positionof the company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report.
6. CHANGE IN THE NATURE OF BUSINESS IF ANY.
There has been no change in the business of the Company during the year under review.
7. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR ALONG WITH REASONS:
The Company has no subsidiaries. Further during the year no joint ventures or associatecompanies were incorporated.
8. RBI GUIDELINES:
The Company fulfills all the norms and standards applicable to NBFCs as set out byReserve Bank of India (RBI). Your Company is well capitalized and has a capital adequacyratio as required by non- deposit accepting NBFCs as prescribed by RBI.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
(i) Mr. SampatkumarShankarlalGilada (DIN: 02144736) retires by rotation at theforthcoming Annual General Meeting and being eligible offershimselffor reappointment.
(ii) Mr. Shankarlal Tulsiram Gilada (DIN: 02016074) has resigned as Director of theCompany with effect from 24th January 2017.The Board places on record its appreciation forthe services rendered by Mr. Shankarlal Tulsiram Gilada during his tenure as a member ofthe Board and its Committees.
(iii) Mr. Ashok Kumar was appointed as Company Secretary of the Company with effectfrom 6th April 2016.
(iv) Dr. Mahesh Kataria resigned as the Independent Director of the Company with effectfrom 30th May 2017. The Board places on record its appreciation for the services renderedby Dr. Mahesh Kataria during his tenure as a member of the Board and its Committees.
(v) The Board of Directors has appointed Mr. Kothakote Venkobarao Prabhakar (DIN:07168947) as Additional (Independent) Director with effect from 30th May 2017. The Boardrecommends his appointment as Independent Director of the Company for a period of fiveconsecutive years and accordingly resolutions seeking approval of the members for theappointment of Independent Director have been included in the Notice of forthcoming AnnualGeneral Meeting of the Company.
10. NUMBER OF BOARD & COMMITTEE MEETINGS:
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year Seven(7) Board Meetings four(4) Audit Committee Meetings four(4) Nomination andRemuneration Committee Meetings one (1) Stakeholders Relationship Committee Meetingandone(1) Independent Directors Meeting were convened and held the details of which arefurnished in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
11. BOARD EVALUATION:
Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 mandates that the Board shall monitor and review the Board evaluationframework. The framework includes the evaluation of directors on various parameters suchas
Board dynamics and relationship
Relationship with stakeholders
Company performance and strategy
Tracking Board and committees' effectiveness
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committee and individual directors. ScheduleIV of the Companies act 2013 states that the performance evaluation of IndependentDirectors shall be done by the entire Board of Directors excluding the director beingevaluated.
The Board has made a formal evaluation of its own performance and that of itscommittees and individual directors as required under Section 134(3) (p) of the CompaniesAct 2013.The evaluation all directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe corporate governance report. The Board has approved the evaluation results as collatedby the nomination and remuneration committee.
12. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT IF ANY:
The Company has received necessary declaration from each Independent Director of theCompany under Section 149 (7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149 (6).
The Company has not re-appointed any Independent Director after completion of fiveyears.
13. REMUNERATION POLICY:
The ratio of remuneration of each director to the median of employees' remuneration asper section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of Board'sreport and shown below. There was no increase in the remuneration payable to the ExecutiveDirectors - Mr. Sampatkumar Shankarlal Gilada and Mr. Rajgopal Giladaduring the year underreview. The variable component of the salary of executive director is linked to theperformance targets for the Company in terms of revenue and for other employees; theCompany has a defined performance targets linked to
the consolidated statement of Profit and Loss in addition to their performance. Theincrements in the pay to the employees are in consonance to average Industry standards andrequirement to recognize the critical talents. In order to ensure that remunerationreflects company performance the performance pay to the employees is linked to theorganization performance. There are no employees receiving remuneration in excess of theremuneration received by the Executive Directors. The ratio of the remuneration of theexecutive director to the median remuneration of the employees of the Company for the yearended 31stMarch 2017 is given below.
In accordance with the provisions of Section 139 of the Companies Act 2013 ('Act')read with Rule 6 of The Companies (Audit and Auditors) Rules 2014 every Company shallappoint Statutory Auditors to hold office for one term of five years and such appointmentis subject to ratification by the Members every year in the annual general meeting. TheAct further makes it mandatory to rotate the statutory auditors after ten consecutiveyears in case of a firm of auditors. Further with regard to rotation of Auditorswherever necessary the companies are required to comply with the provisions of Section139(2) of the Act by the year 2017 i.e. within three years from the date of commencementof the 'Act'.
The members may note that M/s. Vishnukant Jaju & Associates Chartered Accountants(Firm Registration No. 014328W) have been the statutory auditors of the Company for morethan ten consecutive years and they have accordingly informed the Company that they willnot be seeking re-appointment as Statutory Auditors at the conclusion of the forthcoming23rd Annual General Meeting.
M/s. Agiwal P. & Associates (Firm Registration No. 000051S) Chartered Accountantshave been identified for appointment as the Statutory Auditors of the Company. Beingeligible for appointment under the provisions of the Companies Act 2013 they havefurnished their consent to act as the Statutory Auditors in terms of the second provisoto Section 139 of the Act and also provided a certificate to the effect that theirappointment if made shall be in accordance with the conditions laid down and that theysatisfy the criteria provided under Section 141 of the Act. The Board of Directors on therecommendation of the Audit Committee at the board meeting held on 30th May 2017 proposedthe appointment of M/s. Agiwal P. & Associates (Firm Registration No. 000051S) as theStatutory Auditors of the Company for a period of five years from the conclusion of theTwenty-third Annual General Meeting until the conclusion of the Twenty-eighth AnnualGeneral Meeting of the Company (subject to ratification of the appointment at every AnnualGeneral Meeting in terms of the provisions of the 'Act').
The Auditors Report to the shareholders for the yearunder review does not contain anyqualification. Notes to Accounts and Auditors remarks in their report are self-explanatoryand do not call for any further comments.
No frauds have been reported by the Auditors underSection 143(12) of the Companies Act2013 requiring disclosure in the Board's Report.
15. DISCLOSURE ABOUT COST AUDIT:
In view of the same and in terms of the provisions of Section 148 and all otherapplicable provisions of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the Company is exempt from requirements of cost audit.
16. SECRETARIAL AUDITREPORT:
In terms of Section 204 of the Act and Rules made there under Mr. S.P NagarajanPracticing Company Secretary has been appointed as Secretarial Auditor of the Company. Thereport of the Secretarial Auditor is enclosed as Annexure III to this report.
17. INTERNAL FINANCIAL CONTROLS:
The Board has adopted policies and procedures for ensuring the orderly and efficientlyconduct of its business including adherence to the Company's policies the safe guardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and timely disclosure of financial disclosures.
18. VIGIL MECHANISM:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Vigil Mechanism for directors and employees to report genuineconcerns has been established. The Vigil Mechanism Policy has been uploaded on the websiteof the Company at www.gfil.co.in underinvestors/policy documents/Vigil Mechanism Policy link.
19. RISK MANAGEMENT POLICY:
A statement indicating development and implementation of a risk management policy forthe Company including identification therein of elements of risk if any this in theopinion of the Board may threaten the existence of the company.
Your company has been rendering services with respect to lending of loans and advances.The Company has to manage various risks. These risks include Credit Risk Liquidity RiskInterest Rate Risk and Operation Risk. Being cognizant of this fact the company hasrobust risk governance and has built an effective risk management framework. The companystrongly believes that effective risk management can be a strategic differentiator andhence will remain focused on continuously strengthening its risk management systems.
The Risk Management Committee review and monitor these risk at periodical intervals.The company manages credit risk through stringent credit norms established through severalyears of experience in this line of business and continues to follow the time testedpractice of personally assessing every borrower before committing to a credit exposure.This process ensure that the expertise in lending operations acquired by the Company overdecades is put to best use and acts to mitigate credit risk. Liquidity risk and interestrate risk arising out of maturity mismatch of assets and liabilities are managed throughregular monitoring of the maturity profiles. The Company also measures the interest raterisk the duration gap method.
Operational risks arising from inadequate or failed internal process people andsystems or from external events are adequately addressed by the internal control systemsand continuously reviewed and monitor by a dedicated team of people. Process improvementsand quality control are on-going activities and built into the employee's trainingmodules.
20. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the CompaniesAct2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as ANNEXURE I.
21. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There are no significant and material orders passed by the Regulators or Courts orTribunal impacting the going concern status and company's operations in future.
The details relating to deposits covered under Chapter V of the Act and in term of thedisclosure required under section 134(3) read with rule 8(5) of the Companies (Accounts)Rules 2014 it is hereby stated that:
During the year the company has not accepted from the public any deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Accepting ofDeposits) Rules 2014. Further as the company has not accepted any deposits from thepublic the Company is not required to comply with the directions issued by the ReserveBank of India under Non-Banking Financial Companies (Reserve Bank) Directions 1998 withrespect to public deposits.
23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 arefurnished in the notes to the Financial Statements.
Loans/Investments/Guarantees made to firms and companies under the same management arewithin the limits prescribed under RBI Directions 1998 to NBFC's and the limitsprescribed under Sections 185 and 186 of the Companies Act 2013.
24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During the year the Company did not enter into any material transaction with relatedparties under Section 188 of the Companies Act 2013. All transactions entered into bythe Company with the related parties were in the ordinary course of business and on anarm's length basis. Form AOC-2 as required under Section 134 (3) (h) of the Act readwith Rule 8 (2) of the Companies (Accounts) Rules 2014 is attached as part of this reportvide AnnexureII (a). Further the Company's policy on Related Party Transactions isattached as part of this report vide AnnexureII(b) as required under the Non-BankingFinancial Companies - Corporate Governance(Reserve Bank) Directions 2015.
Your Directors draw attention of the members to Note 14 to the financial statementwhich sets out related party disclosures.
25. CERTIFICATE ON CORPORATE GOVERNANCE REPORT:
Corporate Governance is about maximizing shareholders value legally ethically andsustainably. At the Gilada Finance and Investments Limited the goal of CorporateGovernance is to ensure fairness to every stakeholder. We believe that sound corporategovernance is critical to enhance and retain investor trust. We always seek to ensure thatour performance is driven by integrity. The Company has complied with requirements ofRegulation 27(2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 regarding Corporate Governance. A report on the Corporate Governancepracticesand the Auditors' Certificate on compliance of mandatory requirements thereof aregiven as ANNEXURE- IV & VIrespectively to this report.
26. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms part of this Annual Report for theyear ended 31st March 2017 has been provided in ANNEXURE- V in this Annual Report.
27. AUDIT COMMITTEE:
The Details of Audit Committee has been furnished in the Corporate Governance Report.
28. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
In order to prevent sexual harassment of women at work place a new act. The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up Committee for implementation of said policy. During the yearCompany has not received any complaint of harassment.
29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
a) Conservation of energy
(b) Technology absorption
(C) Foreign exchange earnings and Outgo
30. CORPORATESOCIAL RESPONSIBILITY(CSR):
The criteria for setting up Corporate Social Responsibility as prescribed by thenotification issued by the Ministry of Corporate Affairs dated 27th February 2014 readwith section 135 of the Companies Act 2013 and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 are presently not applicable to the Company.
31. HUMAN RESOURCES:
Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company thrust is on the promotion of talent internally throughjob rotation and job enlargement.
32. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors' Responsibility Statement referred to in Sub-clause (c) of Clause (3) ofSub-Section (5) of Section 134 of the Companies Act 2013 shall state that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had 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 had prepared the annual accounts on a going concern basis; and
(e) the directorshad laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
33. ANNUAL LISTING FEES TO STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 toBSE Limited where the Company's Shares are listed.
34. PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 197 of the Act read with rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theinformation in respect of the employees of the Company will be provided upon request. Interms of section 136 of the Act the report and accounts are being sent to the members andothers entitled thereto excluding the aforesaid information which is available forinspection by the members at the registered office of the Company during business hours onworking days of the Company. If any member is interested in obtaining a copy such membermay write to the registered office address of the Company in this regard.
During the financial year the Company has not employed any person with the aggregateremuneration for Rs. 10200000/per annum if employed throughout the year or Rs. 850000per month if employed for part of the year.
Your Directors wish to express a deep sense of gratitude for the continued supportco-operation and guidance received from the Central and State Government DepartmentsReserve Bank of India Registrar of Companies -Bangalore Karnataka Banks and customersduring the year under review. The Directors wish to thank the Company's customers vehiclemanufacturers vehicle dealers and shareholders for their continued support. The Directorsalso thank the employees of the Company for their contribution to the company's operationsduring the year under review.