TO THE MEMBERS
SFL INTERNATIONAL LIMITED (Formerly Suryanagri Finlease Ltd)
The Directors hereby present their Twenty Fourth Annual Report on the business andoperations of the Company and the financial statements for the year ended 31st March2016.
FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY
| || ||(Rs. in Lakhs) |
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Total Income ||- ||392.52 |
|Total Expenditure ||13.45 ||391.82 |
|Profit/ (Loss) before Tax ||(13.45) ||0.69 |
|Tax Expense ||(4.05) ||0.30 |
|Profit/ (Loss) for the period ||(9.40) ||0.39 |
|Brought forward from previous year ||(83.72) ||(84.11) |
|Surplus/ (Deficit) carried to Balance Sheet ||(93.12) ||(83.72) |
The Company has incurred a loss of Rs. 13.45 Lakhs during the year as compared to aprofit before tax of Rs. 0.69 Lakhs in the previous year.
In order to maintain a healthy capital adequacy ratio to support long term growth ofyour Company your Directors has not recommended any Dividend for the Financial Year2015-16.
TRANSFER TO RESERVES
There was no tranfer of any amount to reserve account.
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 positionof the company which have occurred between the end of the financial year of the company towhich the financial year relate and the date of this report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
ADEQUACY OF INTERNAL CONTROLS
The Company's Internal Control Systems are commensurate with the nature size andcomplexity of its business and ensure proper safeguarding of assets maintaining properaccounting record and providing reliable financial information.
The Directors have laid down internal financial controls to be followed by the Companyand such policies and procedures have been adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting record and the timely preparation of reliablefinancial information.
An external independent firm carries out the internal audit of the Company operationsand reports its findings to the Audit Committee on a regular basis. Internal Risk andControl function also evaluates organisational risk along with controls required formitigating those risks. Internal Audit provides assurance on functioning and quality ofinternal controls along with adequacy and effectiveness through periodic reporting.
The Company has a Code of Business Conduct for all employees and a clearly articulatedand internalized delegation of financial authority. These authority levels areperiodically reviewed by management and modifications if any are submitted to the AuditCommittee and Board for approval. The Company also takes prompt action on any violationsof the Code of Business Conduct by its employees.
The Audit Committee reviews the effectiveness of the internal control system and alsoinvites senior management personnel to provide updates on operating effectiveness andcontrols from time to time. A CEO/CFO Certificate signed by the Director of the Companyconfirms the existence and effectiveness of internal controls and reiterates theirresponsibilities to report deficiencies to the Audit Committee. The Audit Committee alsoreviews the Risk management framework periodically and ensures it is updated and relevant.
During the year under review the Internal Financial Control Audit was carried out bythe Statutory Auditors the Report of which is forming part of this Annual Report.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
M/s. Ashok Dhariwal & Co Chartered Accountants (Firm Registration No.-100648W)Statutory Auditors of the Company hold office till the conclusion of the Annual GeneralMeeting of the Company to be held for the financial year 2016-17 and are eligible forre-appointment. They have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and that theyare not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s Jalan Alkesh & Associates Company Secretaries to undertake theSecretarial Audit of the Company for a consecutive term of three financial years startingfrom 2015-16 to 2017-18. The Secretarial Audit Report is given as "Annexure-A"forming part of this Report.
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any subsidiary/joint ventures/associate companies.
The paid up Equity Share Capital as on 31st March 2016 was Rs. 33645000/- dividedinto 3364500 Equity Shares of Rs. 10/- each. During the year under review the Companyhas not issued any shares.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 and the same is annexed as "Annexure-B" to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Particulars of Conservation of Energy Technology Absorption
The Provisions of Section 134(m) of the Act relating to conservation of energy andtechnology absorption do not apply to this Company as the Company has not carried out anymanufacturing activities.
b) Foreign Exchange Earnings and Outgo
During the year under review there was no foreign exchange outgo nor was any foreignexchange earned.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Declaration by Independent Directors
All the Independent Directors have given a declaration that they meet the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013 read with therules made there under and as per SEBI(Listing Obligations & Disclosure Requirements)Regulations 2015. In the opinion of the Board they fulfil the conditions of independenceas Specified in the Act and the rules made there under.
b) Familiarisation Programme
The Independent Directors are familiarised with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. On appointment the Independent Director is issued aLetter of Appointment setting out in detail the terms of appointment dutiesresponsibilities and expected time commitments. The Director is also informed in brief thevarious compliances required from him/her as a Director. The Director is also explained indetail the various compliances required from him as a Director under the variousprovisions of the Companies Act 2013 SEBI (LODR) Regulations 2015. The details offamiliarization programme are available on the Company's website at the weblink
c) Non-Independent Director
In accordance with the provisions of Companies Act 2013 Mr. Mohit KailashchandraAgarwal (DIN: 06425687) Director of the Company is liable to retire by rotation andbeing eligible offers himself for re-appointment. The Board recommends his appointmentwith a view to avail his valuable advices and wise counsel.
A brief profile of the above Director seeking appointment/re-appointment required asper SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is given inthe Notice forming part of the Annual Report.
d) Changes in Directorship during the year
During the year under review there were no changes in the Directorship of the Company.
e) Key Managerial Personnel
During the year under review there were no changes in the Key Managerial Personnel ofthe Company.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
Pursuant to the provisions of Section 178 of the Companies Act 2013 and the SEBIListing Regulations evaluation of all Board members is done on an annual basis. Theevaluation is done by the Board Nomination and Remuneration Committee and IndependentDirectors with specific focus on the performance and effective functioning of the Boardand Individual Directors. Such performance evaluation process was formulated inconsultation with the Nomination and Remuneration Committee and approved by your Board.The performance evaluation thus included the following:
a) Criteria for evaluation of Board of Directors as a Whole
The frequency of meetings;
The length of meetings;
The number of committees and their roles;
The flow of information to board members and between board members;
The quality and quantity of information;
The disclosure of information to the stakeholders.
b) Criteria for evaluation of the Individual Directors
Ability to contribute and monitor corporate governance practices;
Ability to contribute by introducing best practices to address top managementissues;
Participation in long term strategic planning;
Commitment to the fulfilment of Director obligations and fiduciaryresponsibilities;
Monitoring management performance and development;
Statutory compliance & Corporate Governance;
Attendance and contribution at Board/Committee meetings;
Time spent by each of the member; and
The Directors expressed their satisfaction over the evaluation process and resultsthereof.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
During the financial year ended 31st March 2016 eight Board Meetings were held on15th May 2015 30th May 2015 14th August 2015 29th August 2015 14th November 2015 13thFebruary
2016 18th March 2016 and 28th March 2016. The maximum time gap between any twomeetings was less than four months as stipulated under SEBI (LODR) Regulations 2015.Details of Board meetings held during the financial year have been furnished in theCorporate Governance Report forming part of this Annual Report.
MEETINGS OF INDEPENDENT DIRECTOR
During the year under review a meeting of Independent Directors was held on 18th March2016 wherein the performance of the non-independent directors and the Board as a whole wasreviewed. The Independent Directors at their meeting also assessed the quality quantityand timeliness of flow of information between the Company management and the Board ofDirectors of the Company.
COMMITTEES OF THE BOARD
The Company has constituted/re-constituted various Board level committees in accordancewith the requirements of Companies Act 2013. Details of all the above Committees alongwith the composition and meetings held during the year under review are provided in thereport on Corporate Governance forming part of this report.
The composition and terms of reference of the Audit Committee has been furnished in theCorporate Governance Report forming part of this Annual Report. The Board has accepted allthe recommendations of the Audit Committee during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The composition and terms of reference of the Nomination and Remuneration Committee hasbeen furnished in the Corporate Governance Report forming part of this Annual Report.
STAKEHOLDER RELATIONSHIP COMMITTEE
The composition and terms of reference of the Stakeholders Relationship Committee hasbeen furnished in the Corporate Governance Report forming part of this Annual Report.
POLICY ON DIRECTORS APPOINTMENT & REMUNERATION
A Nomination and Remuneration Policy has been formulated pursuant to the provisions ofSection 178 and other applicable provisions of the Companies Act 2013 and Rules theretostating therein the Company's policy on Directors appointment and remuneration by theNomination and Remuneration Committee was approved by the Board of Directors. The saidpolicy is appended as "Annexure- C" to this Report.
The said policy may also be referred to at the Company's official website
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Board has adopted a Whistle Blower Policy to maintain highest standards ofprofessionalism honesty integrity ethical behaviour and to provide a vigil mechanismfor Directors/Employees to voice concern in a responsible and effective manner regardingunethical matters involving serious malpractice abuse or wrongdoing within theorganisation. The Company affirms that during the year no personnel have been deniedaccess to the Audit Committee.
The Whistle Blower Policy is available on the website of the Company
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company as an organization is committed to provide a healthy environment to allemployees and thus does not tolerate any discrimination and/or harassment in any form. TheCompany has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at work place (Prevention Prohibition andRedressal) Act 2013.
No complaints were received during the financial year 2015-2016.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Companies Act 2013 and Rules framed there underdetails of the Loans given and Investments made by the Company during the year have beendisclosed in the Notes to Audited Standalone Financial Statements.
The Company has not given any guarantee or provided security during the year underreview.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
A Related Party Policy has been devised by the Board of Directors for determining themateriality of transactions with related parties and dealings with them. The said policymay be referred to at the Company's official website
There are no contracts or arrangements entered into by the Company during the year withRelated Parties referred to in Section 188 (1) of the Companies Act 2013. There are nomaterially significant related party transactions made by the Company with promotersdirectors key managerial personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
Directors draw attention of the members to Note No. 19 to the financial statement whichset out related party disclosures.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDEMPLOYEES:
A statement containing the details of the Remuneration of Directors Key ManagerialPersonnel (KMP) and Employees as required under Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is given as "Annexure-D" forming part of this Report.
The Company have no employee drawing a remuneration of Rs. 6000000/- (Rupees SixtyLakhs) per annum or part thereof in terms of the provisions of Section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
Pursuant to the provisions of Regulations 34 read with point C & E of Schedule V ofSEBI (LODR) Regulations 2015 a report on Corporate Governance is given as"Annexure-E" for the financial year ended 31st March 2016 along with theCertificate on its Compliance is forming part of this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis is given as "Annexure-F" forms anintegral part of this report and gives details of the overall industry structure economicdevelopments performance and state of affairs of the Company's various businessesinternal controls and their adequacy risk management systems and other materialdevelopments during the financial year 2015-16.
RISK AND MITIGATING STEPS
The Company has identified various risks faced by the Company from different areas.Appropriate structures are present so that risks are inherently monitored and controlledinter alia through strict quality assurance measures.
The Company has adequate internal control system and procedures to combat risks. Therisk management procedure is reviewed by the Audit Committee and Board of Directors on aquarterly basis at the time of review of quarterly financial results of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) & 134(5) of the Companies Act 2013 the Directors ofyour Company confirm that:
in the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable Accounting Standards had been followed along with properexplanation relating to material departures if any;
the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2016and of the profit & loss of the Company for the Financial Year ended 31st March 2016;
the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records for the year ended 31st March 2016 in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
the directors had prepared the annual accounts on a going concern' basis;
the internal financial controls laid down by the Directors were followed by yourCompany and that such internal financial controls are adequate and operating effectively;and
proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year.
Your Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.