Your Directors have pleasure in presenting the 31st Annual Report of yourCompany together with the Audited Statements of Accounts for the year ended March 312016.
| || ||(Rs. in Lac) |
|FINANCIAL HIGHLIGHTS ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Income ||466.94 ||321.84 |
|Profit before Tax & extraordinary item ||12.30 ||80.29 |
|Less : Provision for Taxation ||3.84 ||25.40 |
|Profit after Tax ||8.46 ||54.89 |
|Less : Transfer to Statutory Reserves ||1.69 ||10.98 |
|Less / (Add) : Transfer to Contingent Provision against Standard Assets ||(9.49) ||1.82 |
|Less : Extra-Ordinary Items ||0.00 ||0.71 |
|Add: Profit brought forward from Previous Year ||141.59 ||100.21 |
|Balance carried forward ||157.85 ||141.59 |
OVERVIEW OF ECONOMY
Indian economy is expected to grow marginally higher at 7.5 per cent during the yearcompared with 7.2 per cent in 2014 and interest rate cuts will buttress private sectorspending said a group company of global rating agency Moodys.
Earlier this week International Monetary Fund projected that India will overtake Chinaas the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 percent helped by its recent policy initiatives pick-up in investments and lower oilprices. World Bank too has similar GDP growth forecast for India for the current fiscalyear.
Moodys Analytics said Indias economy is on a cyclical upswing andforward-looking indicators suggest domestic demand is gathering momentum.
On the disinvestment front it said the government has begun selling public sets as itplans to raise Rs 70000 Crore in fiscal 2015-2016.
Moodys Analytics is of the view that "Indias state-owned companies arenotoriously inefficient with significant bureaucracy and endemic corruption. Asset salescan make companies more productive and should ease the supply bottlenecks choking theeconomy."
Funds raised from disinvestments will be spent on developing Indias ailinginfrastructure.
OVERALL PERFORMANCE & OUTLOOK
The financial year 2015-16 was not that good for the Company which is mainly due tosteep fall in retailers participation in stock market which caused fall in dailyturnover and increased volatility in the market. The Small Cap during the year has notperformed well and this the main reason of fall in the profit. The Company is into thebusiness of trading / investment activities in shares and securities and is into theFinance business.
Gross revenue from operations during the year stood at Rs. 466.94 lac in comparison tolast years figure of Rs. 321.84 lac. The Net Profit after Tax for the year was Rs.8.46 lac in comparison to last years Net Profit of Rs. 54.89 lac.
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 doing well in current financial year. However thisdepends entirely on the economic scenario and policy decisions by regulators.
In view of decline in profit 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 2016 was Rs. 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 2016 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 Companys state of affairs profits/(loss) and cash flows for the yearended 31st March 2015.
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 givenbelow:
MANAGEMENTS 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 SEBI LODR Regulations 2015. Transactions during the financialyear were in the ordinary course of business and on an arms length pricing basis anddo not attract the provisions of Section 188 of the Companies Act 2013 and the Rules madethereunder are not attracted and thus disclosure in form AOC-2 in term of Section 134 ofCompanies Act 2013 is not required. Further there are no materially significanttransactions with related parties during the financial year which were in conflict withthe interest of the Company. Suitable disclosure as required by the Accounting Standards(AS18) has been made in the notes to the Financial Statements. The policy on Related PartyTransactions as approved by the Board is uploaded on the Companys website.
MANAGEMENT DISCUSSION & ANALYSIS
As required by Regulation 34 of SEBI LODR Regulations 2015 the Management Discussionand Analysis is annexed and forms part of the Directors Report.
There is no Change in Management of the Company during the year under review.
During the year Mr. Mahavir Prasad Saraswat has resigned from the Board w.e.f. 28thMay 2015 due to his personal reasons. Your Directors wish to place on record theirappreciation for the guidance and inputs provided by Mr. Mahavir Prasad Saraswat duringtheir tenure as Director of your Company.
Apart from the above there is no change in the composition of Board of Directors ofthe Company.
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 Boards Report.Further Section 152 of the Act provides that the independent directors shall not be liableto retire 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
|Sl. No. Name ||Designation ||Date of Appointment ||Date of Resignation |
|1. Mr. Mahavir Prasad Saraswat ||Independent Director ||- ||28th May 2015 |
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS
BSE has issue a Notice on 1st January 2015 suspending the trading in theScrip w.e.f. 7th January 2015 for the reason of surveillance measures. BSE hasnot clarified till the time about the period of suspension and any other reasons behindthe action taken by BSE. Apart from this there are no other significant and materialorders passed by the Regulators/Courts that would impact the going concern status of theCompany and its future operations. During the year the Company has approached to BSE forrevocation of suspension and had submitted requisite documents for the purpose. TheCompany is hopeful of revocation of suspension from the trading in securities of theCompany within short spun of time.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL 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 theCompanies Act 2013:
1. that in the preparation of the Annual Accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to 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 31 2016 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 Companys operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Companys 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 CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficiency and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies. Based on the report of internal audit function process ownersundertake corrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
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 31st Annual General Meeting up to theconclusion of the 35th consecutive Annual General Meeting (subject toratification by the members at every subsequent AGM). As required under the provisions ofSection 139 & 142 of the Companies Act 2013 the Company has obtained writtenconfirmation 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 auditors andare 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 elsewhere in this Annual Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedin this Annual Report.
PARTICULARS OF EMPLOYEES
The Company wishes to place on record their appreciation to the contribution made bythe employee of the Company during the period.
During the year under review there were no employees who were in receipt of theremuneration beyond the limits prescribed under Rule 5 (2) of Companies (Appointment andRemuneration) Rules 2014 and therefore no disclosures need to be made under the saidsection.
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(Acceptance of Deposits) Rules 2014.
REPORT ON CORPORATE GOVERNANCE
The Company conforms to the norms of Corporate Governance as envisaged in the CompaniesAct 2013 and the Listing Agreement with the Stock Exchanges. Pursuant to Clause 49 of theListing Agreement a Report on the Corporate Governance and the Auditors Certificate onCorporate Governance are annexed to this report.
Statements in this Directors Report and Management Discussion and Analysisdescribing the Companys objectives projections estimates expectations orpredictions may be "forward-looking statements" within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed 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.
|Lucknow May 28 2016 ||By order of the Board |
| ||For NCL RESEARCH & FINANCIAL SERVICES LTD. |
|Registered Office : || |
|Office No. 115 City Hotel Complex ||Vijay Jaideo Poddar |
|Lalbagh 24 B N Road ||(DIN : 00339268) |
|Lucknow-226 001 (U. P.) ||Managing Director |