The Directors of your Company present the 23 Annual Report of the Company along withthe audited statement of accounts for the financial year 2016-17.
The results for the year ended 31 March 2017 are as follows: -
(Amount in Lacs)
|Particulars ||31.03.2017 ||31.03.2016 |
|Gross Sales/Operational Revenues ||1795.31 ||5294.43 |
|Other Income ||21.75 ||13.38 |
|Total Income ||1817.06 ||5307.81 |
|Profit/(Loss) before Finance Cost Depreciation & Amortization ||(268.65) ||1816.15 |
|Expense and Tax || || |
|Finance Cost ||1151.95 ||1272.64 |
|Profit/(Loss) before Depreciation & Tax ||(1420.60) ||543.50 |
|Depreciation & Amortization Expense ||12.74 ||20.93 |
|Profit/(Loss) before Tax ||(1433.34) ||522.57 |
|Provision for Tax || || |
|- Current ||0.00 ||257.04 |
|- MAT Credit ||0.00 ||0.00 |
|- Deferred Tax ||70.70 ||(67.40) |
|- Earlier Years ||- ||0.15 |
|Profit after Tax ||(1504.04) ||332.77 |
|Amount transferred to Special Reserve u/s 45-IC of RBI Act 1934 ||0.00 ||66.55 |
|Earning Per Share (Rs.) || || |
|- Basic ||(1.533) ||0.339 |
|- Diluted ||(1.533) ||0.339 |
RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
Your Company had a decline in its key indicators such as turnover and profitability.Total revenue declined from Rs.5307.81 Lacs in the previous year to Rs.1817.06 Lacs in thecurrent year. The Company also suffered losses of Rs.1433.34 Lacs during the current year.The decline in key financial indicators was attributed to an overall slowdown in theeconomy.
As there are losses in the Company no dividend has been recommended for the year ended31 March 2017.
The paid up Equity Share Capital as on March 31 2017 was Rs. 98 12 15930/-.Duringthe year under review
Your Company has not issued equity shares with differential rights as to dividendvoting or otherwise; and
Your Company has not issued any shares (including sweat equity shares) under ESOSscheme for its employees/Directors
Equity Share Capital of the Company is listed on Bombay Stock Exchange.
TRANSFER TO RESERVES
During the year under review as there were losses hence no amount was transferred toSpecial Reserves under section 45-IC of RBI
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of the provisions of Section 152 of the Companies Act 2013 Sh. BishanBansal is due to retire by rotation at the forthcoming
Annual General Meeting of the Company and being eligible offers himself forre-appointment as Director of the Company.
Sh. Naresh Goyal was appointed as an Additional (Non-Executive) Director of the Companyon 24 February 2017. His tenure of office expires at the forthcoming Annual GeneralMeeting and he is eligible for reappointment.
Sh. Deepak Garg was redesignated as Whole-Time Director & CFO of the Company w. e.f. 24 February 2017.
Sh. Naveen Kumar Tayal was redesignated from Whole-Time Director & CFO to Non-Executive Director on 24 February 2017.
Furtherdue to unavoidable reasons and circumstances Sh. Naveen Kumar Tayal hasresigned from the directorship of the Company on 3 March 2017. The Board places on recordits sincere appreciation for the services rendered by Sh. Naveen Kumar Tayal during histenure of directorship.
A brief resume of these Directors the nature of expertise in specific functional areasand names of Companies in which they hold
Directorship and/or Membership/Chairmanship of Committees of the Board as stipulatedunder Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is annexed with the Notice calling 23 Annual General Meeting of the Company.
All the Independent Directors have given a declaration under sub-section (6) of Section149 of the Companies Act 2013 confirming their independence dated 31 March 2017.
Sh. Bishan Bansal Managing Director & CEO and Sh. Deepak Garg Whole- TimeDirector & CFO are not receiving any commission/remuneration from the Company or anyother Company of SRS Group.
NUMBER OF BOARD MEETINGS
During the year under review Fourteen (14) Board Meetings were held .The meeting ofIndependent Directors was held on 30 March 2017. The details of Board meetings and theattendance of Directors in such meetings are given in the Corporate Governance Reportforming part of this Annual Report. The maximum gap between any two meetings was not morethan one hundred and twenty days.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197 of the Act read with Rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 there are no employees drawing remuneration inexcess of the limits set out in the said rules.
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 of Managerial Personnel) Rules 2014 areprovided herein below:-
(i) the ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the year 2016-17:
|S. No. ||Name of Directors ||Nature of Directorship ||Ratio |
|(i) ||Sh. Ankit Sachdeva* ||Managing Director & CEO ||1:4 |
|(ii) ||Sh. Bishan Bansal** ||Managing Director & CEO ||2:1 |
|(iii) ||Sh. Naveen Kumar Tayal^ ||Whole-Time Director & CFO ||5:2 |
|(iv) ||Sh. Deepak Garg^^ ||Whole-Time Director & CFO ||1:3 |
*resigned on 20 June 2016
**appointed on 20 June 2016
^ Redesignated to Non- Executive Director on 24 February2017 and resigned on 3 March2017
^^ Redesignated from Non- Executive Director to Whole-Time Director & CFO on 24February 2017
(ii) the percentage increase in remuneration of Managing Director & CEO Whole-TimeDirector & CFO and Company Secretary in the financial year
|S. No. ||Name of Directors/KMPs ||Category ||% increase |
|(i) ||Sh. Bishan Bansal* ||Managing Director & CEO ||- |
|(ii) ||Sh. Naveen Kumar Tayal^ ||Whole-Time Director &CFO ||-23% |
|(iii) ||Sh. Deepak Garg^^ ||Whole-Time Director &CFO ||- |
|(iv) ||Ms. Rakhi Mehta ||Company Secretary ||- |
*appointed on 20 June 2016
^ Redesignated to Non- Executive Director on 24 February 2017 and resigned on 3 March2017
^^ Redesignated from Non- Executive Director to Whole-Time Director & CFO on 24February 2017
There was no increase in the remuneration of non-executive Directors by way of sittingfees for attending Board/ Committee meetings for the financial year 2016-17. No profitlinked commission is paid to non-executive Independent Directors of the Company.
(iii) the percentage increase in the median remuneration of employees in the financialyear: 7%
(iv) the number of permanent employees on the rolls of Company as on 31 March 2017: 13
(v) the ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year:
|S. No. ||Name of Employees ||Ratio |
|(i) ||Sangeeta Kapoor ||2:4 |
|(ii) ||Sangita Singh ||2:3 |
|(iii) ||Jitin Sadana ||2:3 |
vi) It is affirmed that the remuneration is as per the Remuneration Policy of theCompany.
PERFORMANCE EVALUATION MECHANISM
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 the Board ofDirectors has carried out an annual evaluation of its own performance the individualdirectors as well as evaluation of working of its Committees.
Information on the manner in which formal annual evaluation has been made by the Boardof its own performance and that of its
Committees and individual directors is given in the Corporate Governance Report.
Information regarding Remuneration Policy for Directors KMP & other Employees isgiven in the Corporate Governance Report.
COMPOSITION OF COMMITTEES
The composition of Corporate Social Responsibility Committee as required under Section135(2) the composition of Audit Committee as required under Section 177 (8) of theCompanies Act 2013 and the composition of Nomination & Remuneration Committee asrequired under Section 178 is given in the Corporate Governance Report.
Further the Board has accepted all the recommendations of the Audit Committee duringthe year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Pursuant to section 186 (11) of the Companies Act 2013 ('the Act') the provisions ofsection 186(4) of the Act requiring disclosure in the financial statement of the fullparticulars of the loans made and guarantees given or securities provided by a Non-BankingFinancial Company in the ordinary course of its business and the purpose for which theloan or guarantee or security is proposed to be utilized by the recipient of the loan orguarantee or security are exempted from disclosure in the Annual Report.
The details of investments made by the Company are given in Note No.2.9 to theFinancial Statement.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis. There being no 'material' related party transactions as defined under the CompaniesAct 2013 read with Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 hence there are no details to be disclosed in Form AOC-2in that regard.
STATUS OF BANK LOANS
The Company has working capital limits aggregating Rs.110 Crores from Banks and has notbeen able to service Interest payable monthly due to an acute liquidity crisis resultingfrom mismatch of cash flows. Accordingly Company's account was classified asNon-Performing Assets (NPA) by the respective lending Banks in terms of extant RBIGuidelines on Income Recognition and Asset Classification.
SUBSIDIARIES JOINT VENTURE AND ASSOCIATE AND BRANCHES
The Company has no subsidiary Companies/ joint ventures and associate Companies as at31 March 2017. Therefore annexing of report in Form AOC-1 relating to salient featuresof associates companies is not applicable.
SMERA Ratings Limited have reaffirmed the Bank Loan ratings awarded the previous yearfor Company's Credit Facilities at 'SMERA D' for the financial year 2016-17 also.
Your Company has not accepted any deposits from the Public and as such no amount ofprincipal or interest was outstanding as on the date of the Balance Sheet for the yearended 31 March 2017.
M/s. SVP & Associates Chartered Accountants Statutory Auditors of the Companyretire at the ensuing Annual General Meeting of the Company and have expressed theirwillingness for reappointment as statutory auditors in accordance with the Companies Act2013 and confirmed that their re-appointment if made will be within the prescribedlimits under Section 141(3) of the Companies Act 2013 and they are not disqualified forsuch re-appointment within the meaning of Section 141 of the said Act.
The members are requested to ratify the appointment of M/s. SVP & AssociatesChartered Accountants as Statutory Auditors of the Company from the conclusion of thisAGM until the conclusion of three consecutive AGMs as mentioned in the Notice.
M/s LAA & Associates are the Internal Auditors of the Company.
Auditors of the Company have not expressed any qualification in their report and notesto accounts where ever given are self- explanatory.
The auditors have not reported any incident of fraud to the Audit Committee during thefinancial year 2016-17.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Ms. Savita TrehanPracticing Company Secretary (FCS No.4374) has been appointed to conduct the SecretarialAudit of the Company.
The secretarial audit report for the F.Y 2016-17 in the prescribed form MR-3 given byMs. Savita Trehan is enclosed as "Annexure-I" to this report. The report isself-explanatory and does not call for any further comments.
Ms. Savita Trehan was appointed as Secretarial Auditors of the Company tillF.Y.2016-2017. She has been reappointed for another three years from F.Y.2017-18 to2019-2020.
The Secretarial Audit Report for the year under review does not contain anyqualification reservation or adverse remark or disclaimer made by the secretarialauditor.
RESERVE BANK OF INDIA (RBI) GUIDELINES
During the year under review your Company has complied with all the applicableregulations and directions of the Reserve Bank of India.
As per the FAQ section (Updated as on July 04 2016) at the RBI Website it is quotedthat "CICs in a group would not be considered for aggregating the assets of multipleNBFCs in a group under the circular. Instructions contained in the Core InvestmentCompanies (Reserve Bank) Directions 2011 dated January 5 2011 shall be applicable toCICs in this regard."
Taking into consideration the above mentioned point of the FAQ's we are complying withthe provisions of Non-Systemically Important Non-Banking Financial (Non-Deposit Acceptingor Holding) Companies Prudential Norms (Reserve Bank) Directions 2016.
EXTRACT OF ANNUAL RETURN
The extract of the annual return as provided under sub-section (3) of section 92 of theCompanies Act 2013 and rule 12(1) of the Companies (Management and Administration) 2014as "Annexure- II" is attached to this report.
The Board of Directors is responsible for identifying evaluating and managing allsignificant risks faced by the Company. The Board approved Risk Management Policyestablishes the guiding principles by which key risks are managed across the organization.The Board monitors and reviews the implementation of various aspects of the RiskManagement policy through a duly constituted Risk Management Committee (RMC). The RMCassists the Board in its oversight of the Company's management of key risks includingstrategic and operational risks as well as the guidelines policies and processes formonitoring and mitigating such risks under the aegis of the overall business riskmanagement framework. In the opinion of the Board none of the risks faced by the Companythreaten its existence.
The details of Vigil mechanism/Whistle Blower Policy are given in Corporate GovernanceReport.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As part of its initiatives under "Corporate Social Responsibility" (CSR) thecompany has contributed funds for Promotion of Education and Environment cleanliness.
The Annual Report on CSR activities is annexed herewith as: Annexure III
DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference tothe financial statements some of which are outlined below:
Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies(Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014. These are in accordancewith generally accepted accounting principles in India. Changes in policies if any areapproved by the Audit Committee in consultation with the Auditors.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Your Company has a policy for the prevention of sexual harassment which has beenimplemented at unit level. It ensures prevention and deterrence towards the commissioningof acts of sexual harassment and communicates procedures for their resolution andsettlement. A Committee has been constituted in accordance with the requirements under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013which ensures implementation and compliance with the Law as well as the policy at unitlevel.
During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The nature of the activities of the Company does not give much scope for introducingmeasures for energy conservation and technology absorption and hence there is nothing toreport under the above head Foreign Exchange earning & outgo : NIL
MATERIAL CHANGES & COMMITMENTS
No material changes and commitments affecting the financial position of the Companyhave occurred after the end of the financial year 2016-17 and till the date of thisreport.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act 2013the Directors of the Company confirm the following: -
(a) that in the preparation of the annual accounts for the year ended 31 March 2017the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(a) that 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 at the end of thefinancial year and of the profit and loss of the Company for that period;
(b) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(c) that the directors had prepared the annual accounts on a going concern basis;
(d) 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
(e) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
CORPORATE GOVERNANCE REPORT
Your Company is committed to maintain highest standards of Corporate Governance. TheDirectors adhere to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance Practice and has implemented all the prescribed stipulations.The Report on Corporate Governance as stipulated under Regulation 17 18 19 20 21 2223 24 25 26 27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations2015 forms as part of Annual Report.
The report on Corporate Governance together with the certificate from Ms. SavitaTrehan Practicing Company Secretary [FCS No.4374] confirming the compliance of theCorporate Governance is attached to this report for information of the Members as"Annexure-IV".
MANAGEMENT'S DISCUSSION & ANALYSIS
The Management's Discussion and Analysis Report of financial condition and results ofoperations of the Company is given as a separate statement is attached to this report forinformation of the Members.
The Directors of your Company wish to place on record their thanks & gratitude tothe Government Authorities Bankers Stock Exchanges RBI and other Financial Institutionsand place on record their sincere appreciation for the efforts put in by the employees atall levels and cooperation extended by all those associated with the Company.
| || ||On Behalf of the Board |
| || ||For SRS Finance Ltd. |
| ||(Bishan Bansal) ||(Deepak Garg) |
|Place: Faridabad ||Managing Director & CEO ||Whole-Time Director & CFO |
|Date: 12 July2017 ||DIN 00013705 ||DIN 00237116 |