We have pleasure in presenting the 24th Annual Report on the business andoperations of Company and Financial Results for the year ended 31st March2017.
1. FINANCIAL RESULTS
The summarized Financial Results of the Company are given hereunder: -
| || ||(Rs. In lakhs) |
|Particulars ||FY 2016-17 ||FY 2015-16 |
|Total Income ||237.75 ||137.19 |
|Operating Profit before interest Depreciation & Tax ||137.72 ||84.25 |
|Interest and other Financial charges ||0.02 ||0.47 |
|Depreciation ||0.54 ||0.27 |
|Net Profit before Tax ||137.16 ||83.50 |
|Provision for Income Tax & FBT ||27.71 ||28.05 |
|Provision for Deferred Tax ||18.28 ||(1.76) |
|Net Profit after Tax ||91.17 ||57.21 |
|Add: Balance brought forward from previous year ||502.68 ||493.03 |
|Profit available for appropriation ||593.85 ||550.24 |
|Proposed Dividend ||30.00 ||30.00 |
|Corporate Tax on Dividend ||6.11 ||6.11 |
|Depreciation Adjustment ||- ||- |
|Balance to be carried forward ||539.51 ||502.68 |
2. OPERATIONS AND BUSINESS OUTLOOK:
During the year under review the Company recorded a total income of Rs. 237.75 lakhsand a net profit of Rs. 91.17 lakhs against income of Rs. 137.19 lakhs and a net profit ofRs. 57.21 lakhs in the previous year.
3. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
As per the requirements Section 134(3)(I) of the Companies Act 2013 Company declarethat there are no significant material changes and commitments affecting financialposition of the Company between 31st March 2017 and the date of Board'sReport.
4. CHANGE IN THE NATURE OF BUSINESS:
As per the requirements Rule 8(5)(ii) of the Companies (Accounts) Rules 2014 Companydeclare that there is no significant change in the nature of business of the Companyduring the last financial year.
5. SHARE CAPITAL AND CLASSIFICATION OF COMPANY:
The authorized capital of the Company as on 31st March 2017 was Rs.50000000/- divided into 5000000 equity shares of Rs.10/- each.
The Subscribed Issued and Paid-up capital of the Company as on 31st March2017 was Rs. 30003000/- divided into 3000300 equity shares of Rs. 10/- each.
In terms of provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2007 issued by Reserve Bank ofIndia; your company has been classified as Loan Company.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit Accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2007 and other NBFC regulations havebeen made in this Annual Report.
During the year under review your Directors recommended a Dividend @ 10% amounting toRs.3000300/- for the year ended 31st March 2017. This will entail an outflowof Rs.3611101/-(inclusive of Dividend Distribution Tax thereon).
7. TRANSFER TO RESERVES
The Company proposes to transfer Rs.1823357/- to Statutory Reserves.
8. FIXED DEPOSITS:
Your Company has not accepted/invited any deposits from the public for the year underreview within the meaning of Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Directions 1998 and Section 73 of the Companies Act 2013 and the rulesmade there under.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act 2013 Shri. Surya Prakash Gowra (DIN:01377618) Director of the Company will retire at the ensuing Annual General Meeting andhas indicated to the company that he does not seek re-appointment.
? The members of the Company have appointed Shri. Sudheer Soma (DIN: 00287082) asDirector in place of retiring director Shri. Soma Dayanand of the Company in its AGM heldon 12th September 2016. Shri. Sudheer Soma is liable to retire by rotation.
? Shri. Gowra Srinivas (DIN : 00286986) was re-appointed as Managing Director in theBoard Meeting held on 19th May 2016 which was approved by members of theCompany in its AGM held on 12th September 2016 for a period of 5 years.
SUBSEQUENT TO CLOSURE OF FINANCIAL YEAR 2016-17
The Board recommended the re-appointment of Shri. D. Suresh as IndependentDirector in the Board Meeting held on 27th July 2017 which is required to beapproved in the ensuring AGM for a period of 5 years.
The Board recommended the re-appointment of Shri. Tilak Shankar as IndependentDirector in the Board Meeting held on 27th July 2017 which is required to beapproved in the ensuring AGM for a period of 5 years.
Brief profiles of Shri. D. Suresh Shri. Tilak Shankar are given in the noticeconvening the 24th AGM for reference of the shareholders.
Shri. Soma Dayanand who was liable to retire by rotation in 23rd AGM held on12th September 2016 did not offer himself for reappointment and expressed hisinability to serve as a Director of the Company due to preoccupation thereby retired atthe Annual General meeting of the Company held on 12th September 2016.
D. EVALUATION OF THE BOARD's PERFORMANCE
As per provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(LODR)Regulations 2015 the Board adopted a formal performance evaluation policy for evaluatingits performance and as well as that of its Committees and individual Directors includingthe Chairman of the Board. The exercise was carried out through a structured evaluationprocess covering various aspects of the Board's functioning such as composition of theBoard & committees experience & competencies performance of specific duties& obligations etc. Separate exercise was carried out to evaluate the performance ofindividual Directors including the Board Chairman who were evaluated on parameters such asattendance contribution at the meetings and otherwise independent judgment etc. Theevaluation of the Independent Directors and that of the Chairman was carried out by theentire Board excluding the Director being evaluated and the evaluation of Non-IndependentDirectors was carried out by the Independent Directors. A separate meeting of IndependentDirectors was also held during the year wherein the performance of Chairman BoardExecutive Directors was evaluated.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review in terms of theprovisions of Regulation 34 of the SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of this Annual Report. (ANNEXURE I)
F. DECLARATION BY INDEPENDENT DIRECTORS
In accordance with Section 149(7) of the Companies Act 2013 each Independent Directorhas confirmed to the Company that he or she meets the criteria of independence as laiddown in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI(LODR) Regulations 2015.
A. RISK MANAGEMENT POLICY
The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the company has laid down various steps to mitigate theidentified risks. The audit committee has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.
B. NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. There has been no change in policy from the last year. The RemunerationPolicy is attached to this report as ANNEXURE II.
C. CODE OF CONDUCT POLICY:
The Company has complied with the requirements about code of conduct for Board membersand Senior Management Personnel. The said policy is available on the website of theCompany. (www.gowraleasing.com/code-of-conduct.php)
D. INSIDER TRADING POLICY:
The Board of Directors of the Company have adopted the Insider Trading Policy inaccordance with the requirement of the SEBI (Prohibition of Insider Trading) Regulations2015. The Insider Trading policy of the Company lays down guidelines & procedures tobe followed and disclosures to be made while dealing with the shares of the Company aswell as the consequences of the violations. The policy has been formulated to regulatemonitor and ensure reporting of deals by employees and to maintain highest ethicalstandards of dealing in Company shares.
The Insider Trading Policy of the company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct forpreventing insider trading is available on the website of the Company. (www.gowraleasing.com/pdf/new/code-of-fair-disclosures.pdf)
E. VIGIL MECHANISM /WHISTLE BLOWER POLICY:
The Board of Directors of the Company have adopted Whistle Blower Policy. This policyis formulated to provide an opportunity to employees to raise concerns and to access theAudit Committee in good faith in case they observe unethical and improper practices orany other wrongful conduct in the Company to provide necessary safeguards for protectionof employees from reprisals or victimization and to prohibit managerial personnel fromtaking any adverse personnel action against those employees.
There were no complaints received during the year 2016-17.
F. POLICY ON MATERIALITY OF EVENTS:
The Policy on materiality of events/ transactions as approved by the Board may beaccessed on the Company's website.
G. FAIR PRACTICE CODE:
The Board of Directors have adopted a Fair Practices Code at its Meeting held on 30thMay 2013 at Secunderabad as per the RBI guidelines for NBFCs which is available on thewebsite (www.gowraleasing.com/fair-practice-code.php) .
11. AUDITORS & AUDITORSf REPORT
A. STATUTORY AUDITORS
Pursuant to provision of Section 139 of the Companies Act 2013 (the Act) M/s.Dagliya & Co. Chartered Accountants are the Statutory Auditors of the Company andhold office till the conclusion of the ensuring 24th AGM.
The Statutory Auditors' Report does not contain any reservation qualificationor adverse remark.
The Statutory Audit Report for the financial year 2016-17 is annexed herewith as(ANNEXURE III) to this Report
M/s. Dagliya & Co. Chartered Accountants will retire at the conclusion of theensuing 24th Annual General Meeting of the members of the Company and pursuant to theprovisions of Section 139 of the Companies Act 2013 read with Companies (Audit andAuditors) rules 2014 no listed Company or a Company belonging to such class or classesof Companies as may be prescribed shall appoint or re-appoint an Individual as Auditor formore than one term of five consecutive years and an audit firm as Auditor for more thantwo terms of five consecutive years provided also that every company existing on orbefore the commencement of this Act which is required to comply with the provisions ofthis sub-section shall comply with requirements of this sub-section within a period whichshall not be later than the date of the first annual general meeting of the company heldwithin the period specified under sub-section (1) of Section 96 i.e. after three yearsfrom the date of commencement of this Act.
Considering the aforesaid the tenure of the existing Auditors M/s Dagliya & CoChartered Accountants has completed. In compliance to the aforesaid provisions The AuditCommittee and the Board of Directors recommend the appointment of M/s. Agarwal Ankush& Associates Chartered Accountants (Firm Registration no. 015125S) as the StatutoryAuditors of the Company from the conclusion of the 24th AGM till the conclusion of 29thAGM subject to the consent of shareholders. The said auditors have expressed theirwillingness to act as the Auditors of the Company if appointed.
They have confirmed that their appointment if made would be within the limitsspecified under Section 141(3)(g) of the Act. They have further confirmed that they arenot disqualified to be appointed as statutory auditors in terms of the provisions of theproviso to Section 139(1) Section 141(2) and Section 141(3) of the Act and the provisionsof the Companies (Audit and Auditors) Rules 2014.
B. SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act 2013 the Company has appointed R&AAssociates Hyderabad as Secretarial Auditor. The Secretarial Audit Report for thefinancial year 2016-17 is annexed herewith as (ANNEXURE IV) to this Report.
The Secretarial Audit Report does not contain any reservation qualification or adverseremark.
C. COST AUDITOR
During the year under review the Company was not required to maintain cost records andget them audited by Cost Auditor.
12. DIRECTORSf RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanation obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the company at the end of the financial year March 312017 and of the 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 / detecting fraud and other irregularities.
(d) The Directors have prepared the annual accounts on a going concern basis.
(e) The Directors have laid down internal financial controls to be followed by thecompany and the internal financial controls are adequate and are operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with CorporateGovernance is annexed to the Report on Corporate Governance.
Pursuant to Schedule V of SEBI (LODR) Regulations 2015 the declaration signed by theManaging Director affirming compliance of the Code of Conduct by the Directors and SeniorManagement personnel of the Company for the financial year 2016-17 is annexed and formspart of the Corporate Governance Report (ANNEXURE V)
14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the employees of the Company is enclosed herewith in separate section (ANNEXURE- VI).
No employee was in receipt of remuneration exceeding Rs. 10200000/- or more perannum or Rs. 850000/- or more per month as the limits prescribed under Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and hence thedisclosure as required under Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not required.
15. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. 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.
Your Directors draw attention of the members to Notes 2.24 to the financial statementwhich sets out related party disclosures.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee provided security or madeinvestments pursuant to the provisions of Section 186 of Companies Act 2013 other thanthe normal course of business.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as (ANNEXURE VII)to this Report.
B. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises of Shri. T. Shankar (Chairman) Shri. T.G. SurendranathShri. D.Suresh Shri. J.A. Mohan Kumar Shri. Gowra Surya Prakash as members. All therecommendations made by the Audit Committee were accepted by the Board.
C. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met 4 (four) times during the FY 2016-17. Forfurther details please refer report on Corporate Governance. The Maximum interval between2 meetings did not exceed 120 days as prescribed under Companies Act 2013.
The equity shares of the Company are listed with Bombay Stock Exchange (BSE).
There are no arrears on account of payment of listing fees to BSE.
18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo is not applicable since there is no such activity at presentbeing pursued by the Company.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. The Company has no subsidiaries joint ventures or associate companies. b. Nosignificant or material orders were passed by the Regulators or Courts or Tribunals whichimpact the going concern status and Company's operations in future. c. The Company has inplace adequate internal financial controls with reference to financial statements. Thesecontrols ensure the accuracy and completeness of the accounting records and preparation ofreliable financial statements.
20. POLICY ON SEXUAL HARASSMENT:
There were no complaints/cases pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
21. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company was not required to constitute a CSR Committee as the Company has not metany of the thresholds mentioned in Section 135 of the Companies Act 2013 during thefinancial year under review. Hence reporting about policy on Corporate SocialResponsibility and the initiatives taken are not applicable to the Company.
The Directors thank the Company's Bankers namely State Bank of India Kotak MahindraBank Limited. HDFC Bank Limited and officials of concerned Government Departments fortheir co-operation and continued support to the Company.
The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management. The Board placeon record its appreciation of the contribution made by the employees at all levels fortheir hard work solidarity co-operation and support.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Secunderabad ||(D.SURESH) |
|Dated: 27-07-2017 ||Chairman |
| ||(DIN : 00268394) |