SE Investments Ltd.
|BSE: 532900||Sector: Financials|
|NSE: SEINV||ISIN Code: INE420C01042|
|BSE LIVE 15:40 | 16 Oct||187.25||
|NSE 15:47 | 16 Oct||188.00||
|Mkt Cap.(Rs cr)||759|
|Mkt Cap.(Rs cr)||759.49|
SE Investments Ltd. (SEINV) - Director Report
Company director report
Your Board of Directors have pleasure in presenting the 24th Annual Reportof the S. E. Investments Limited (The "Company") together with the AuditedFinancial Statements for the year ended March 31 2016.
The standalone financial performance of the Company for the year ended 2015-16 issummarized below:
The Company has posted a profit after tax (PAT) of Rs. 4513.14 lacs for FY 2015-16 ascompared to a PAT of Rs. 4451.52 lacs for FY 2014-15. A sum of Rs. 902.63 lacs isproposed to be transferred to statutory reserve as against Rs. 890.30 lacs for FY 2014-15.
Financial Cost for the year increased by 16.00 % to Rs. 6487.43 Lacs from Rs. 5592.57lacs in the last year.
REVIEW OF OPERATIONS
The Company is providing a number of financial products like Business Loans SME Loansand Income Generation Loans which are expected to take the growth of the Company to ahigher level.
During the financial year 2015-16 total disbursements (including figures ofSubsidiary) reached to Rs. 148976.50 lacs recording 27.48% increase in comparison toRs. 116866.95 lacs achieved during last financial year.
The Company is focusing to maintain the asset quality of its loan portfolio withoutcompromising the risk profile.
Number of Customers
Total Customers outreach stood at 709258 being increased by 8.25 % as compared toprevious year.
Net Worth and Capital to Risk Adjusted Ratio (CRAR)
The Net Worth of the Company reduced to Rs. 505.14 crores as on March 31 2016 from Rs.514.41 crores as on March 31 2015. The Capital to Risk Adjusted Ratio (CRAR) stood at41.69% as on March 31 2016 as against 47.48 % as on March 31 2015 which is much abovethe requirement as stipulated by Reserve Bank of India and is one of the best in theindustry.
Keeping in mind the overall performance and the outlook of your Company for thefinancial year 2015-16 your Board is pleased to recommend a dividend of Re. 1/- (RupeeOne only) per share i.e. 10% on each Equity Share of Rs. 10/- (Rupees Ten only). Thedividend would be paid to all the shareholders whose names appear in the Register ofMembers/ Beneficial Holders list on the Book Closure/ Record date as decided by Board.
Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of balance sheet.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Change in Directors or KMP
During the year under review there is no change in the composition of Board ofDirectors of the Company.
None of the Key Managerial Personnel has resigned or appointed during the financialyear 2015-16.
Directors Retiring by Rotation
In terms of Section 152 of Companies Act 2013 Mr. Harish Singh Whole Time Directorof the Company is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible for re-appointment offers himself for re-appointment.
Declaration of Independence by Independent Directors
Declaration have been given by all the Independent Directors of the Company confirmingthat they meet the criteria of independence as envisaged in Section 149(6) the CompaniesAct 2013 and Listing Regulations.
Policy on Directors Appointment and Remuneration
In accordance with Section 178 of the Companies Act 2013 the Board has on therecommendation of Nomination and Remuneration Committee approved the Policy forAppointment and Remuneration of Directors.
The objective of aforesaid Policy is to provide a criteria for appointment ofDirectors viz. experience qualification positive attributes understanding of Company'sbusiness and social perspective personal achievements and Board diversity. The policyalso contains the provisions to ensure that Executive Directors KMP and other employeesare sufficiently compensated for their performance. Under the policy Nomination andRemuneration Committee is entrusted with the responsibility to evaluate the variousaspects relating to the appointment and remuneration of the Directors to the Board.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 with respect to Directors' Responsibility Statement it is herebyconfirmed that:
a) in the preparation of the annual accounts for the financial year ended March 312016 the applicable accounting standards have been followed and there are no materialdepartures from the same;
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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) 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
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
M/s Nupur Finvest Private Limited a registered non deposit taking non-banking financecompany is the only subsidiary company of which the Company owned hundred percentshares.
Nupur Finvest Private Limited is engaged in business to provide business and incomegeneration loans to entrepreneurs. At the year ended March 31 2016 the net worth of theCompany stood at 5146.50 lacs During the reporting period the subsidiary reported a grossincome of Rs. 1520.86 lacs and Profit Before Tax (PBT) and Profit After Tax (PAT) at Rs.267.23 lacs and Rs.178.88 lacs respectively.
REDEMPTION OF PREFERENCE SHARES
In terms of resolution passed by Shareholders of the Company in the 23rdAnnual General Meeting held on September 30 2015 2500000 Preference Shares of Rs. 10/-each of the Company have been redeemed during the year.
AUDITORS & AUDIT REPORTS Statutory Auditors
M/s R. Lal & Company Chartered Accountants & M/s P M S & Co. CharteredAccountants have been appointed as Joint Statutory Auditors of the Company in 22ndAnnual General Meeting of the Company for 3 and 2 years respectively subject to annualratification. Further in 23rd Annual General Meeting members have ratifiedand confirmed the appointment of Joint Statutory Auditors of the Company from theconclusion of 23rd Annual General Meeting till the conclusion of 24thAnnual General Meeting.
Accordingly as recommended by the Audit Committee ratification to appoint M/s R. Lal& Company Chartered Accountants as statutory auditors of the Company from theconclusion of ensuing Annual General Meeting until the conclusion of 25thAnnual General Meeting and re-appointment of M/s P M S & Co. Chartered Accountantsas statutory auditors of the Company for a further period of five years commencing fromthe conclusion of 24th Annual General Meeting until the conclusion of 29thAnnual General Meeting (subject to annual ratification) are placed before the Members atthe ensuing Annual General Meeting for their approval.
The observations of Auditors in their report read with notes to the accounts areself-explanatory and do not call for any further explanation. The Auditors of the Companyhave not given any adverse remarks or disclaimers in the report.
Secretarial Auditor and Secretarial Audit Report
In accordance with the provisions of Section 204 of the Companies Act 2013 and as ameasure of good Corporate Governance practice the Company had appointed CS DimpleSachdeva Practicing Company Secretary as its secretarial auditor to conduct secretarialaudit of the Company for financial year ended March 31 2016. The Report of secretarialauditor for financial year ended March 31 2016 being a part of this Directors' Report isenclosed herewith as Annexure A. There are no qualifications reservations or adverseremarks made by the secretarial auditor of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Pursuant to the clarification dated February 13 2015 issued by Ministry of Corporateaffairs provisions of Section 186(11) and 134(3)
(g) of the Companies Act 2013 requiring the disclosure of particulars of the loansgiven investments made or guarantees given or securities provided is not applicable tothe Company.
RELATED PARTY TRANSACTIONS
During the year under review transactions entered into with Related Parties asdefined under Companies Act 2013 and SEBI (LODR) Regulations 2015 were in the ordinarycourse of business and at an arm's length pricing basis and do not attract the provisionsof Sections 188 of the Companies Act 2013. Such related party transactions are disclosedin the Note no. 29 of the financial statement.
The details of the transactions with Related Parties were placed before the AuditCommittee for its approval from time to time.
Policy on materiality of related party transactions and on dealing with related partytransactions is displayed on the website of the Company at www.seil.in.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year of the Company and date ofthis Directors' Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of business undertaken by the Company during the year underreview the particulars pursuant to Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 to the extent applicable are asfollows:
Since the Company does not own any manufacturing facility the particularsrelating to conservation of energy and technology absorption have not been furnished.
Foreign Exchange earnings for the Company during the financial year under reviewwas nil and Company's Foreign Exchange outgo during the financial year under review wasRs. 1.90 lacs.
RISK MANAGEMENT POLICY
Non-Banking Finance Companies (NBFCs) form an integral part of Indian financial system.NBFCs are required to ensure that a proper framework on Risk Management System isformulated and put in place. For this purpose Company has constituted Assets LiabilityManagement Committee and Risk Management Committee to facilitate the Board to address therisk associated with the business of the Company and developed and implemented a riskmanagement policy to ensure sustainable business growth with stability and promote aproactive approach in reporting evaluating and resolving risks associated with theCompany's business. The Policy also highlights the functions responsibilities and role ofthe Committees and Board to address the risks associated with the Company andmitigate/reduce the impact of the risk on the Company.
The Company follows a disciplined risk management process and takes business decisionswith balanced risk-reward paradigm. Detailed statement on risk management policy of theCompany is discussed in separate section on Management Discussion and Analysis and itforms part of the Directors' Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of Companies Act 2013 read with rulesmade thereunder Company has constituted a Corporate Social Responsibility Committeewhich framed a Board approved CSR Policy for the Company same is available on Company'swebsite www.seil.in. CSR Policy of the Company has vision to make concrete efforts towardsthe animal welfare specially for Mother Cow also supported the cause of ruraldevelopment promoting education providing preventive healthcare and sustainabledevelopment of green environment provided they are covered as per the statutoryrequirements of social responsibility.
The Board of the Company has decided to undertake its CSR activities through aregistered trust which is engaged in the welfare of Mother Cow. In the financial Year2015-16 Company has made contribution of Rs. 1.80 Crores in the corpus fund of the Trustwhich is more than 2% of Company's Average net profit of last three years of Rs. 84.91Crores. Composition of CSR Committee as disclosed in Corporate Governance Section of thisAnnual Report as part of Directors' Report and other details as required under CompaniesAct 2013 is as annexed with this Report as Annexure B.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS ORTRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There is no order passed by the Regulators Courts or Tribunals which would impact thegoing concern status of the Company and its future operations.
INTERNAL FINANCIAL CONTROL
Internal Financial Control System is an integral component of the Risk ManagementSystem of the Company. The internal financial control policies and internal audit programadopted by the Company play an important role to ensure the orderly and efficientlyconduct of the Company's business including adherence to the Companies policiessafeguard of Company's assets proper utilisation of available resources the preventionand detection of frauds reliability and accuracy of financial reporting.
A firm of Competent Chartered Accountants has been engaged by the Company forconducting internal audit to examine and evaluate the adequacy and effectiveness ofinternal financial control system of the Company.
The Audit Committee of Board of Directors Statutory Auditors and the Business Headsare periodically apprised of the internal audit findings and corrective actions taken.
The Audit Committee of Board of Directors actively reviews the adequacy andeffectiveness of internal financial control system and suggests improvements forstrengthening them.
Internal Financial Control System of the Company is modified continuously in accordancewith the dynamic changes in the business conditions and to comply with the applicablelaws regulations statutory and accounting requirements.
Your Company strives to provide the best work environment with ample opportunities togrow and explore. The human resources development function of the Company is guided by astrong set of values and policies. Healthy cordial and harmonious industrial relationshave been maintained by the Company at all levels.
Information required under Sexual Harassment of Women at Work Place (PreventionProhibition & Redressal) Act 2013
The Company has a policy against sexual harassment and process for dealing withcomplaints of harassment or discrimination in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013. TheDirectors further state that during the year under review there was no case filed pursuantto the sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act2013.
DISCLOSURES AS PER THE PROVISION OF SECTION 197 (12) OF COMPANIES ACT 2013
Information in accordance with provisions of Section 197(12) of the Companies Act2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have been annexed herewith as Annexure C to the Directors' Report.
The Bank Borrowings of the Company have been assigned rating of "IND A-" byM/s India Ratings & Research Private Limited (A Fitch Group Company)
As per www.indiaratings.co.in rating symbols & definitions "IND A" isdefined as "Instruments with this rating are considered to have adequate degree ofsafety regarding timely servicing of financial obligations. Such instruments carry lowcredit risk".
COMPLIANCE OF RESERVE BANK OF INDIA GUIDELINES
The Company always adheres to comply with applicable provisions of rules regulationsand guidelines issued by Reserve Bank of India. TIMELY REPAYMENT OF LOAN LIABILITIES
During the year under review the Company has duly serviced all its debts obligationsin time.
EXTRACTS OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 Extracts of Annual Return in the form MGT-9is annexed herewith as integral part of this Report as Annexure D.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
An analysis of the financial conditions and results of operations of the Company forthe year under review has been represented in the Annual Report as a separate section onManagement Discussion and Analysis is annexed herewith as Annexure E.
The Company is committed to adhere to the best practices of governance. It is ensuredthat the practices being followed by the Company are in alignment with its philosophytowards Corporate Governance. The Company believes that the Corporate Governance is allabout effective management of relationship among constituents of the system and alwaysworks towards strengthening this relationship through corporate fairness transparency andaccountability. In the Company prime importance is given to reliable financialinformation integrity transparency fairness empowerment and compliance with law inletter and spirit.
Detailed compliances with the provisions of Listing Regulation for the year ended2015-16 along with the Certificate of Compliance from the Auditor has been mentioned inCorporate Governance Report which is annexed herewith as Annexure F.
PERFORMANCE OF THE BOARD OF DIRECTORS ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In the light of Company's performance the performance of the Board of Directors andtheir committees along with performance of individual Director is reviewed and evaluatedfrom time to time by the Board of Directors. The performance of the Directors individuallyand collectively and performance of committees are found satisfactory.
With the spirit of wealth creation for the shareholders of the Company your Directorsare committed to give their best efforts towards the development of the Company.
The Independent Directors at their separate meeting held on March 15 2016 in fullattendance made an assessment and evaluation of the performance of Non IndependentDirectors Managing Director and Chairman of the Company.
Independent Directors also reviewed the performance of the Board as a whole andassessed the quality and timeliness of the flow of the information between the Companymanagement and Board.
The Board of Directors would like to place on record their gratitude for thecommitment dedication and hard work done by the employees of the Company and theco-operation extended by Banks Government Authorities Customers Shareholders andEmployees of the Company and we look forward for their mutual support and co-operation.