NCL Research and Financial Services Ltd.
|BSE: 530557||Sector: Financials|
|NSE: N.A.||ISIN Code: INE132F01020|
|BSE 14:43 | 16 Mar||1.39||
|NSE 05:30 | 01 Jan||NCL Research and Financial Services Ltd|
NCL Research and Financial Services Ltd. (NCLRESFINL) - Director Report
Company director report
Your Directors have pleasure in presenting the 32nd Annual Report of your Companytogether with the Audited Statements of Accounts for the year ended March 312017.
Rs in Lac
OVERVIEW OF ECONOMY
India remains the fastest growing economy in the world - economic fundamentals arestrong and reform momentum continues. GST is on track for implementation in the secondquarter of the fiscal year and is expected to yield substantial growth dividends fromhigher efficiencies and raise more revenues in the long term according to a new WorldBank report released today. While agriculture growth delivered in 2016-2017 the reportnotes that investment growth remains subdued partly because of banking sector stress.
The report says the fundamentals of the Indian economy remain strong with robusteconomic growth strong fiscal consolidation low current account deficit higheragricultural output growing FDI low inflation and higher wages in rural areas. Favorablemonsoons boosted agriculture and rural consumption while urban consumption remainedrobust and exports rebounded in the third quarter of 2016-2017.
OVERALL PERFORMANCE & OUTLOOK
The FY 2016-17 was continue to be sluggish for the Company due to continuous changes inlaw and regulations fall in interest rates in retail segment as well as falling demand offinancing due to smooth availability of finances with Banks due to recent demonetization.On the other hand the stock market was continued to be on peak and thus the investment instock market by Company remains low which was resulted into the fall in profitability ofthe Company.
Gross revenue from operations during the year stood at Rs 735.19 lakh in comparison tolast years' figure of Rs 466.94 lakh. The Net Profit/(Loss) after Tax for the year was ofRs (5.38) lakh in comparison to last years' Net Profit of Rs 8.46 lakh.
The Company is one of the RBI registered NBFC and is in to the business of Investmentin Shares & Securities and is also doing Financing activities.
Your Company is optimistic of recovering from bad phase and will grow as timeprogresses. DIVIDEND
In view of losses for the year and in order to meet financial requirements to implementits future plans your Directors do not propose any dividend for the year under review.
The paid up Equity Share Capital as on March 31 2017 was ' 29.085 Crore. During theyear under review the Company has not issued any shares with differential voting rightsnor has granted any stock options or sweat equity. As on March 31 2017 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.
FINANCE AND ACCOUNTS
Your Company prepares its financial statements in compliance with the requirements theCompanies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India. Thefinancial statements have been prepared on historical cost basis. The estimates andjudgments relating to the financial statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Company's state of affairs profits/(loss) and cash flows for the year ended31 st March 2017.
The Company continues to focus on judicious management of its working capital.Receivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring.
AUDITORS REMARK ON ACCOUNTS
Information and explanations on items contained in the Auditors Report which might beconsidered to be "Reservations Qualifications or adverse Remarks" is providedherein below:
MANAGEMENT'S PERCEPTION OF AUDITORS REMARK
With regard to inadequacy of supporting for some of the expenditure of revenue naturethe Board of Directors of the Company is on opinion that the same is wholly andexclusively attributable to the business of the Company.
PARTICULARS OF LOANS GUARANTEES & INVESTMENTS
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the holding company in the immediately preceding accounting yearor has generated 20% of the consolidated income of the Company during the previousfinancial year. Accordingly a policy on material subsidiaries has not been formulated.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of Listing Regulations; during the financial year were in theordinary course of business and on an arm's length pricing basis and do not attract theprovisions of Section 188 of the Companies Act 2013 and the Rules made thereunder are notattracted and thus disclosure in term of Section 134(3)(h) r/w Rule 8(2) of the Companies(Accounts) Rules 2014 and under Regulation 34(3) &
53(f) Para A of Schedule V of SEBI (LODR) Regulations 2015 is attached as Annexure I.Further there are no materially significant transactions with related parties during thefinancial year which were in conflict with the interest of the Company. Suitabledisclosure as required by the Accounting Standards (AS18) has been made in the notes tothe Financial Statements. The policy on Related Party Transactions as approved by theBoard is uploaded on the Company's website.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis on the operations of the Company as prescribedunder Part B of Schedule V read with regulation 34(3) of the Listing Regulations 2015 isprovided in a separate section and forms part of the Directors' Report.
CHANGE IN NATURE OF BUSINESS IF ANY.
There are no changes in the nature of business in the financial year 2016-17.
The Board of Directors have laid down the manner for carrying out an annual evaluationof its own performance its various Committees and individual directors pursuant to theprovisions of the Act and relevant Rules and the Corporate Governance requirements are incompliance with Regulation 17 of Listing Regulations 2015. The performance of the Boardwas evaluated by the Board after seeking inputs from all the Directors on the basis ofvarious criteria such as Board Composition process dynamics quality of deliberationsstrategic discussions effective reviews committee participation governance reviews etc.The performance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of criteria such as Committee composition processdynamics deliberation strategic discussions effective reviews etc. The Nomination andRemuneration Committee reviewed the performance of the individual Directors on the basisof the criteria such as transparency analytical capabilities performance leadershipethics and ability to take balanced decisions regarding stakeholders etc.
NUMBER OF MEETINGS OF THE BOARD
The details of the Board Meetings and other Committee Meetings held during thefinancial year 201617 are given in the separate section of Corporate Governance Report.
All Committees of the Board of Directors are constituted in line with the provisions ofthe Companies Act 2013 and applicable regulations of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
There is no Change in Management of the Company during the year under review.
There was no change in composition of Board during the year.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Further none of the Directors of the Company are disqualified under sub-section (2) ofSection 164 of the Companies Act 2013.
As per provisions of Section 149 of the 2013 Act independent directors shall holdoffice for a term up to five consecutive years on the board of a company but shall beeligible for re-appointment for another term up to five years on passing of a specialresolution by the company and disclosure of such appointment in Board's Report. FurtherSection 152 of the Act provides that the independent directors shall not be liable toretire by rotation in the Annual General Meeting (AGM') of the Company.
As per requirements of Regulation 25 of SEBI LODR Regulations 2015 a person shall notserve as an independent director in more than seven listed entities: provided that anyperson who is serving as a whole time director in any listed entity shall serve as anindependent director in not more than three listed entities. Further independentdirectors of the listed entity shall hold at least one meeting in a year without thepresence of non-independent directors and members of the management and all theindependent directors shall strive to be present at such meeting.
DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the
going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF
THE FINANCIAL YEAR AND DATE OF REPORT
There have been no material changes and commitments affecting the financial position ofthe Company
between the end of financial year and date of the report.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained your
Directors make the following statement in terms of Section 134(3)(c) of the CompaniesAct 2013:
1. that in the preparation of the Annual Accounts for the year ended March 312017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
2. 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 as at March 312017 and of the profit ofthe Company for the year ended on that date;
3. that 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;
4. the annual accounts have been prepared on a going concern basis;
5. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
6. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Innovation and Technology are synonymous with the Company. The investment in technologyacts as a catalyst and enables the Company to be innovative.
BUSINESS RISK MANAGEMENT
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.
However the Company is not required to constitute Risk Management Committee under SEBILODR Regulations 2015.
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
Your Company has an Internal Control System which is commensurate with the sizescale scope and complexity of its operations. To maintain its objectivity andindependence an independent firm of Chartered accountants has been appointed as theInternal Auditors who report to the Chairman of the Audit Committee of the Board.
The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in your Company its compliance with operating systems accountingprocedures and policies of your Company. Based on the report of the Internal Auditorsplaced before the Audit Committee process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. The internal controls have beenreported by the Auditors to be adequate and effective during the year.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company i.e. www.nclfin.com
RESEARCH & DEVELOPMENT
The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development is not significant in relation to thenature size of operations of your Company.
The Auditors M/s DBS & Associates (FRN 018627N) Chartered Accountants Mumbai whoare Statutory Auditors of the Company and holds the office until the conclusion of ensuingAnnual General Meeting and are recommended for re-appointment to audit the accounts of theCompany from the conclusion of the 32nd Annual General Meeting up to the conclusion of the35th consecutive Annual General Meeting (subject to ratification by the members at everysubsequent AGM). As required under the provisions of Section 139 & 142 of theCompanies Act 2013 the Company has obtained written
confirmation under Rule 4 of the Companies (Audit and Auditors) Rules 2014 from M/s.DBS & Associates (FRN 018627N); that they are eligible for appointment as auditorsand are not disqualified for appointment under the Companies Act 2013 the CharteredAccountants Act 1949 or the rules and regulations made there-under; the proposedappointment is as per the term and within the limits laid down by or under the authorityof the Companies Act 2013 and that there are no proceedings pending against them or anyof their partners with respect to professional conduct.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Priti Agarwal Company Secretaries in Practice (CP No.: 9937) to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report isannexed in this Annual Report as Annexure II.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return for the financial year ended 31st March 2017 made under the provisionsof Section 92(3) of the Act is attached as Annexure III to this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thesame is not applicable to the Company as none of employee is drawing remuneration inexcess of the limits set out in the said rules and thus no disclosure has been provided inthis Annual Report.
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 by way of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2016 dated June 30 2016 ("Amended ManagerialRemuneration Rules 2016") the report is not applicable to the Company.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder the Companyhas not received any complaint of sexual harassment during the year under review.
PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013
Since the Company is into the business of Financing (NBFC Activities) and into thetrading and investment activities in Shares and Securities; the information regardingConservation of Energy Technology Absorption Adoption and Innovation as defined undersection 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 is reported to be NIL.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has not earned or used foreign exchange earnings/outgoings during the yearunder review.
During the year under review your Company has not accepted any deposit from the publicfalling
within the ambit of Section 73 of the Companies Act 2013 and The Companies (Acceptanceof Deposits) Rules 2014.
REPORT ON CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report.
Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.
Your Directors wish to place on record their appreciation towards the contribution ofall the employees of the Company and their gratitude to the Company's valued customersbankers vendors and members for their continued support and confidence in the Company.