Your Directors are pleased to present the Company's 31st Annual Report and the auditedaccounts for the year ended 31st March 2017.
FOR THE YEAR 2016-2017:
(Amount in Rs.)
|PARTICULARS ||2016-17 ||2015-16 |
|Income From Operation ||1977254.00 ||1728448.00 |
|Other Income ||6921610.92 ||5708587.00 |
|Total Income ||8898864.92 ||7437035.00 |
|Less: Operational Expenses ||5233708.15 ||3907035.00 |
|Profit before Interest Depreciation ||3665156.77 ||3530000.00 |
|Less depreciation and Finance Cost ||1932621.09 ||2340563.00 |
|Profit/ Loss Before Tax ||1732535.68 ||1189437.00 |
|Less: Tax expenses ||854235.00 ||0.00 |
|Profit/ Loss After Tax ||878300.68 ||1189437.00 |
During the year under review the Company has generated total revenue of Rs.8898864.92 as against Rs 7437035 of the previous financial year. The net profit forthe year under review has been Rs. 878300.68 as against Rs. 1189437 during theprevious financial year. Your Directors are continuously looking for the new avenues forfuture growth of the Company and expect more growth in future period.
A detailed analysis of the financial results is given in the Management Discussion andAnalysis Report which forms part of this report.
DIVIDEND & APPROPRIATIONS:
In order to conserve the resources in the year 2016-17 the Directors do not recommendany dividend for the year under review.
BOARD OF DIRECTORS:
1. Mr. Gandalal Ambalal Patel (DIN: 02848956) Director of the Company retires byrotation and being eligible offers himself for re-appointment.
2. Mr. Babulal Maganlal Patel (DIN - 02901047) was appointed as additional director on29th December 2016 and hereby proposed for regularisation as Independent director.
3. Mr. Pravinkumar Keshavlal Patel (DIN - 00841628) is proposed to be reappointed asthe Managing director of the Company.
4. The Independent Directors have submitted their declarations of independence asrequired pursuant to the provisions of section 149(7) of the Act stating that they meetthe criteria of independence.
SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANY:
The company has no subsidiary company Joint Venture Company or Associate Company.
Pursuant to the first proviso to Section 129(3) of the Companies Act 2013 ('Act') andRules 5 and 8(1) of the Companies (Accounts) Rules 2014 salient features of thefinancial statements performance and financial position of subsidiary and joint ventureif any are given in Form AOC - 1 as Annexure 'A' to this Report.
During the year under review your Company has not accepted deposit form public asenvisaged by Chapter V of the Companies Act 2013 and as per rules and regulations framedby Reserve Bank of India for Non Banking Finance Companies.
CHANGE IN THE NATURE OF BUSINESS:
There is no Change in the nature of the business of the Company done during the year.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS / OUTGO:
As required by the provisions of Section 134(3)(m) of the Companies Act2013 read withRule 8 of the Companies (Accounts) Rules 2014 the relevant data pertaining toconservation of energy technology absorption are not applicable and hence not given. TheCompany has no Foreign Exchange earnings and outgo during the year under review.
PARTICULARS OF EMPLOYEES:
There are no employees drawing the remuneration in excess of limits prescribed underRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No such material changes and commitments affecting the financial position of thecompany have occurred and hence no comments required.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:
During the year no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and company's operations in future.
CHANGES IN SHARES CAPITAL:
The Company has not made any changes in the share capital of the company during theyear under review.
All the assets of the company are adequately insured and the Company has developedproper system for taking insurance on all its assets in order to mitigate the risk.
I. STATUTORY AUDITORS :
Under Section 139 of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. The audit Committee has proposed and on 25th July 2017 the Boardof Directors of the Company has recommended the appointment of M/s. Ranjit Galledar &Co. Chartered Accountants (FRN: 108640W) as the Statutory Auditors of the Company. M/s.Ranjit Galledar & Co. Chartered Accountants will hold the Office for a period of fiveconsecutive years from the conclusion of the 31st Annual General Meeting of the Companyscheduled to be held on 11th September 2017 till the conclusion of the 36th AnnualGeneral Meeting to be held in the year 2022 subject to the approval of the Shareholdersof the Company. The first year of audit will be of financial statements for the yearending March 31 2018 which will include the audit of the quarterly financial statementsof the year.
II. Auditors' Report:
The Auditors' Report does not contain any qualification reservation or adverseremark(s) and hence no comments required. The notes of accounts referred to in theauditors' report are self explanatory and therefore do not require any further comments.
III. INTERNAL CONTROL SYSTEM
Pursuant to the provisions of section 138 of the Companies Act and rules made thereunder the company has proper system of Internal Control and it has also appointedinternal auditor to look after the matters of internal control.
IV. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of section 204 of the Act and The Companies [Appointment andRemuneration of Managerial Personnel] Rules 2014 the Company has appointed G R Shah& Associates Practicing Company Secretary to undertake Secretarial Audit for thefinancial year ended on 31st March 2016. Secretarial Audit Report is attached to thisreport as Form MR-3.
The Board has duly reviewed the Secretarial Auditor's Report and the observations andcomments appearing in the report are self-explanatory. However the Board would like toclarify that the discrepancy regarding the proper balance between Independent and otherdirectors have been rectified after appointment of Mr. Babulal Maganlal Patel asIndependent director during the year. Also the Board states that due to oversight theCompliance officer failed to intimate to Stock exchange for Closure of trading window intwo quarters which will be taken due care in future. The Appointment of Company Secretaryand Chief Financial officer was made during the year by the Board of Directors.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Board of your Company has constituted a CSR Committee. As on 31 March 2017 theCommittee comprises three Directors. CSR Committee has recommended to the Board a CSRPolicy indicating the activities to be undertaken by the Company which is approved bythe Board and carried to the Annual Report.
The company's net profit turnover and net worth are outside the criteria of Section135 of the Companies Act 2013 therefore it is not required to spend any amount underCSR Activity.
ENVIRONMENT HEALTH AND SAFETY:
The Company is a Non banking finance company hence it is not in such activity whichaffects the environment adversely however it accords the highest priority toEnvironment Health and Safety. The management is constantly reviewing the safetystandards of the employees and the management believes in the concept of sustainabledevelopment.
MANAGING THE RISKS OF FRAUD. CORRUPTION AND UNETHICAL BUSINESS PRACTICES:
i. Vigil Mechanism / Whistle Blower Policy:
The Company has established vigil mechanism and framed whistle blower policy forDirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of Company's Code of Conduct or Ethics Policy.
ii. Business Conduct Policy:
The Company has framed "Business Conduct Policy". Every employee is requiredto review and sign the policy at the time of joining and an undertaking shall be given foradherence to the Policy. The objective of the Policy is to conduct the business in anhonest transparent and in an ethical manner. The policy provides for anti-bribery andavoidance of other corruption practices by the employees of the Company.
The Audit Committee comprises of 3 members namely Chairman Shri Kantilal JoytiramPatel Shri Keshavlal Kashiramdas Patel and Shri Pravinbhai Keshavlal Patel. The auditcommittee duly met at regular intervals during the mentioned financial year and in respectof which meetings proper notices were given and the proceedings were properly recorded andsigned in the Minutes Book maintained for the purpose. The Meetings of Audit committee washeld four times on during the financial year and further details of attendance ofdirectors in the Committee meeting are mentioned in Corporate Governance Report.
The Committee periodically discussed the Financial Reporting process reviewed theFinancial Statements and discussed the quality of the applied accounting principles andsignificant judgment that affected the Company's Financial Statements. Before presentingthe audited accounts to the members of the Board the Audit Committee recommended theappointment of the statutory auditors subject to the Board's approval. The auditCommittee reviewed with adequacy of internal control systems with the managementstatutory and internal auditors.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
The company has not declared dividend in any of the previous seven years and hencethere is no fund lying as unclaimed/unpaid dividend and hence it is not required totransfer to IEPF Account.
ACCOUNTING STANDARDS AND FINANCIAL REPORTING:
The Company incorporates the accounting standards as and when issued by the Instituteof chartered Accountants of India. The Company Complied with the Stock Exchange and legalrequirement concerning the Financial Statements at the time of preparing them for theAnnual Report.
Your Company follows the principles of effective Corporate Governance. The Company hascomplied with the mandatory provisions of Corporate Governance as prescribed in theprovisions of SEBI (Listing Obligations and Disclosures Requirement) Regulations 2015executed with the Stock Exchange(s).
A separate section on Corporate Governance is included in the Annual Report andCertificate from Company's Auditors confirming the compliance with the code of CorporateGovernance as enumerated in prescribed in the provisions of SEBI (Listing Obligations andDisclosures Requirement) Regulations 2015 is annexed hereto.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review as stipulatedunder the provisions of SEBI (Listing Obligations and Disclosures Requirement)Regulations 2015 executed with the Stock Exchange is presented in a separate sectionforming part of the Annual Report.
DEMATERIALISATION OF EQUITY SHARES:
As per direction of the SEBI and Bombay Stock Exchange Limited the shares of theCompany are under compulsory demat form. The Company has established connectivity withboth the Depositories i.e. National Securities Depository Limited and Central DepositoryServices (India) Limited and the Demat activation number allotted to the Company is ISIN:INE 006C01015. Presently shares are held in electronic and physical mode (81.89% of sharesin demat 18.11% in physical mode).
The equity shares of the company are listed in the Bombay Stock Exchange Limited whichhas the connectivity in most of the cities across the country.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
The Board of Directors duly met 6 times at regular intervals during the mentionedfinancial year and in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose. The dates on which meetings were held are 27/05/2016 04/07/2016 30/07/201625/10/2016 29/12/2016 and 25/01/2017. The details regarding the attendance of thedirectors in the board meetings is mentioned in Corporate Governance Report.
NUMBER OF MEETINGS OF THE AUDIT COMMITTEE:
The Audit Committee duly met 4 times at regular intervals during the mentionedfinancial year and in respect of which meetings proper notices were given and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose. The details regarding the meetings of Audit Committee and the attendance of thedirectors in the same is mentioned in Corporate Governance Report.
NUMBER OF MEETINGS OF THE NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee met 4 times at regular intervals during thementioned financial year and in respect of which meetings proper notices were given andthe proceedings were properly recorded and signed in the Minutes Book maintained for thepurpose. The details regarding the meetings of Nomination and Remuneration Committee andthe attendance of the directors in the same is mentioned in Corporate Governance Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (Prevention Prohibitionand Redressal Act 2013):
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of section 134 [c] of the Act your Directors state that:
a) in the preparation of the annual financial statements for the year ended on 31stMarch 2017 applicable accounting standards read with requirements set out under scheduleIII of the Act have been followed along with proper explanation relating to materialdepartures if any
b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the company as at 31st March 2017 and of the profit of thecompany for the year ended on that date
c) proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for prevention and detection of fraud and other irregularities
d) the annual financial statements are prepared on a going concern basis
e) proper internal financial controls are in place and that the financial controls areadequate and are operating effectively and
f) the systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186:
During the period under report the Company has not provided guarantee to any person orBody Corporate. It has given current Loans to some parties in its ordinary course ofbusiness and as it is an NBFC company it is outside the purview of Section 186 of theCompanies Act 2013.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with rules 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return isannexed herewith as MGT-9 and forming part of the report.
RISK MANAGEMENT POLICY:
The Company has developed and implemented a risk management policy which identifiesmajor risks which may threaten the existence of the Company. The same has also beenadopted by your Board and is also subject to its review from time to time. Risk mitigationprocess and measures have been also formulated and clearly spelled out in the said policy.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
The Particulars of contracts or arrangements with related parties are given in theprescribed Form AOC-2 appended herewith as Annexure-B.
Your Directors wish to place on record their sincere appreciation to the financialinstitutions Company's bankers and customers vendors and investors for their continuedsupport during the year.
Your Directors are also pleased to record their appreciation for the dedication andcontribution made by employees at all levels who through their competence and hard workhave enabled your Company achieve good performance year after year and look forward totheir support in future as well.
|REGISTERED OFFICE: ||BY ORDER OF THE BOARD |
|1st Floor Deshna Chamber ||FOR K Z LEASING AND FINANCE LTD. |
|B/h Kadva Patidar Wadi || |
|Ashram Road || |
|Ahmedabad -380014. ||Pravinkumar K Patel |
|Date: 25/07/2017 ||(Chairman and Managing Director) |
| ||(DIN: 00841628) |