TO THE MEMBERS
Your Directors are pleased to present the Forty-fifth Annual Report and theCompanys audited accounts for the financial year ended 31st March 2016.
Financial Highlights of the Company for the financial year 2015-2016 as compared to theprevious financial year are given hereunder:
| ||(Rs. in Lacs) |
| ||2015-2016 ||2014-2015 |
|Total Revenue ||258.04 ||197.22 |
|Profit before Exceptional and Extraordinary Items and Tax (PBEEIT) ||27.60 ||81.83 |
|Exceptional Items ||Nil ||Nil |
|Profit before Extraordinary Items and Tax (PBEIT) ||27.60 ||81.83 |
|Extraordinary Items ||Nil ||Nil |
|Profit before Tax (PBT) ||27.60 ||81.83 |
|Tax expense: || || |
| Current Tax ||7.27 ||20.00 |
| Deferred Tax ||14.34 ||9.67 |
|Profit for the year (PAT) ||5.99 ||52.16 |
STATE OF THE COMPANYS AFFAIRS
Your Company is a Non-Banking Financial Company registered with the Reserve Bank ofIndia. Accordingly it is mainly engaged in the business of non-banking financialactivities.
There is no change in the nature of business carried on by the Company.
During the year under review the Company has achieved a total revenue of Rs. 258.04Lacs as compared to Rs. 197.22 Lacs in the previous year.
The Company being a small Non-Banking Financial Company it is difficult to competewith the big players in the market. The management has already started exploringpossibilities in other areas like syndication corporate banking real estate and hotelindustries so that the range of activities can be expanded. The Directors are optimisticthat diversification in other areas of business will result in generation of greaterrevenue.
RESERVES & SURPLUS
The Balance in Reserves & Surplus stands at Rs. 1552.30 Lacs (Previous year Rs.1546.31Lacs). During the year under review Rs. 1.20 Lacs has been transferred to ReserveFund as per RBI Norms (Previous Year Rs. 10.43 Lacs).
In view of inadequacy of profits the Board of Directors of the Company did notrecommend any dividend.
PARTICULARS OF INVESTMENTS MADE LOANS AND GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of investments made loans and guarantees given and securities providedare furnished in Notes No. 9 11 14 and 15 to the Financial Statements.
The Company being an NBFC registered under Chapter III B of the Reserve Bank of IndiaAct 1934 nothing contained in Section 186 of the Companies Act 2013 except sub-section(1) shall apply.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES
During the year under review there was no materially significant related partytransaction made by the Company with promoters directors or other designated personswhich had potential conflict with the interest of the Company. Related Party Transactionsthat were made during the financial year ended 31st March 2016 were on arms lengthbasis and in the ordinary course of business. Accordingly provisions of Section 188 ofthe Companies Act 2013 were not attracted. Therefore disclosure in Form No.AOC 2is not required to be made. The list of Related Party Transactions is given in Note No.23.7 to the financial statements pursuant to the Accounting Standard (AS) 18.
The Company has voluntarily formulated the policy in dealing with related partytransactions although compliance with the provisions of corporate governance is notapplicable to the Company at present. The policy can be accessed in the weblinkhttp://unitedcreditltd.com/unitedadmin/upload/cmspage_484_data.pdf
MATERIAL CHANGES OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR UNDER REVIEW AND THEDATE OF THE REPORT
There is no material changes and commitments occurred between the end of the financialyear under review and the date of the report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors comprises of six Directors out of which Mr. A. K. Dabriwala isfunctioning in executive capacity.
Pursuant to Section 149 of the Companies Act 2013 Mr. N. Mishra Mr. R. M. Choubeyand Mr. S. C. Saha are acting as Independent Directors.
Independent Directors had given declaration confirming that they comply with therequirement of Section 149(6) of the Companies Act 2013.
Familiarisation programme for Independent Directors was held on 10th February 2016.The details of familiarisation programme could be accessed in the weblinkhttp://unitedcreditltd.com/unitedadmin/upload/cmspage_460_data.pdf
During the financial year under review there was no appointment or cessation of Officeof Directors and Key Managerial Personnel.
Mrs. Rashmi Vijaykaran Dabriwal (DIN: 00393162) retires by rotation in the forthcomingAnnual General Meeting and being eligible offers herself for re-appointment.
MEETINGS OF THE BOARD
During the year under review there were seven meetings of the Board of Directors heldon 13.04.2015 26.05.2015 08.08.2015 28.09.2015 04.11.2015 10.02.2016 and 14.03.2016.
DIRECTORS RESPONSIBILITY STATEMENT PURSUANT
TO SECTION 134(3)(c) OF THE COMPANIES ACT 2013
The Directors hereby confirm that
i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
ii) they had selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;
iii) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) they had prepared the annual accounts on a going concern basis;
v) they had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
vi) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
RISK MANAGEMENT POLICY
The Company has in place a comprehensive risk management policy which is reviewedevery six months by the Board of Directors. As of now the Directors do not envisage anyelement of risk which may threaten the existence of the Company.
Pursuant to Regulation 15(2) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 compliance with the corporategovernance provisions is not mandatory for the Company. However during the financial yearunder review the Company has complied with the regulation voluntarily.
COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee consists of three Non-Executive Independent Directors namely Mr.S. C. Saha Mr. N. Mishra and Mr. R. M. Choubey. Mr. S. C. Saha is acting as the Chairmanof the Committee. All the recommendations made by the Audit Committee were accepted by theBoard.
COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of three Non-Executive IndependentDirectors namely Mr. R. M. Choubey Mr. N. Mishra and Mr. S. C. Saha. Mr. R. M. Choubeyis acting as the Chairman of the Committee.
PROHIBITION OF INSIDER TRADING
The Company has formulated and published on its official website a Code of FairDisclosure and Conduct for prohibition of insider trading pursuant to the Securities andExchange Board of India (Prohibition of Insider Trading) Regulations 2015.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established for directors and employees of the Company a vigilmechanism to enable them to report genuine concerns about unethical behaviour actual orsuspected fraud or violation of the Companys code of conduct or ethics policy. Thepolicy of vigil mechanism / whistle blower may be accessed on the Companys websiteat the link http://unitedcreditltd.com/unitedadmin/upload/cmspage_485_data.pdf
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 in respect of CorporateSocial Responsibility are not applicable to the Company as the net worth turnover and netprofit during the financial year under review are less than the stipulated amounts.Accordingly no policy has been framed by the Company on Corporate Social Responsibility.
TRANSFER OF AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A of the Companies Act 1956 (correspondingSection 124 of the Companies Act 2013) the declared dividends which remain unpaid orunclaimed for a period of seven years have been duly transferred by the Company to theInvestor Education and Protection Fund (IEPF) established by the Central Government underSection 205C of the said Act (corresponding Section 125 of the Companies Act 2013).
STATUTORY AUDITORS AND AUDITORS REPORT
M/s. Ray & Ray Chartered Accountants were appointed as Statutory Auditors of theCompany to hold office from the conclusion of the forty-third Annual General Meeting tillthe conclusion of the forty-sixth Annual General Meeting of the Company. In terms of thefirst proviso to Section 139(1) of the Companies Act 2013 the matter relating toappointment of M/s. Ray & Ray Statutory Auditors of the Company has been placed forratification by the members.
The report made by the Statutory Auditors is free of any qualification reservation oradverse remarks or disclaimer.
In accordance with the requirement of Section 204 of the Companies Act 2013 Mr.Ranjit Kumar Ghosh Practising Company Secretary had been appointed as SecretarialAuditor for the financial year ended 31st March 2016.
A report made by him pursuant to Section 204(1) of the Companies Act 2013 read withRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is attached marked Annexure I. Regarding observation made by him it is statedthat the Company has taken necessary steps to increase the financial assets to the desiredlevel of 50% as directed by Reserve Bank of India.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company being engaged in non-banking financial activities the question ofconservation of energy and technology absorption does not arise.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There has been no foreign exchange earnings in any manner. However expenditure inforeign currency amounted to Rs. 154526/- during the year under review.
The Company has not accepted any public deposit during the year under review.There isalso no unclaimed or unpaid deposit as on 31st March 2016.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS
There is no significant and material order passed by any regulator or court or tribunalimpacting the going concern status and Companys operations in future.
LISTING WITH THE STOCK EXCHANGES
The Companys Equity Shares are listed with The Calcutta Stock Exchange Limitedand BSE Limited.
INTERNAL CONTROL SYSTEMS & INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Control Systems and the Audit Committee periodicallyreviews the system with the Auditors of the Company. The term "internal financialcontrols" as defined in the explanation to Section 134(5)(e) of the Companies Act2013 means the policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The management has devised an appropriate internal financial controls system to ensureorderly and efficient conduct of its business.
In line with the requirement of Rule 8(5)(viii) of the Companies (Accounts) Rules2014 the Company has adopted several measures to ensure adequacy of internal financialcontrols with reference to the financial statements. Such measures inter alia includequarterly review of financial statements by the Audit Committee Board of Directors andthe Statutory Auditors. The Internal Auditors place their report every quarter on accuracyof financial information and effective operation of systems procedures and controlsapart from statutory compliances made by the Company before the Audit Committee and theBoard.
EXTRACT OF THE ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 is attached pursuant to Section134(3)(a) of the Companies Act 2013 marked Annexure II.
POLICY ON DIRECTORS APPOINTMENT REMUNERATION ETC.
Pursuant to Section 178(3) of the Companies Act 2013 and Regulation 19(4) read withItem No (A) (1) of Part D of Schedule II of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee has formulated the criteria for determining qualificationspositive attributes and independence of a director. The Committee has also recommended tothe Board a Policy relating to the remuneration for the directors key managerialpersonnel and other employees.
The Policy as recommended by the Nomination and Remuneration Committee and approved bythe Board is enclosed marked Annexure III and forms part of this report.
The Policy has been disclosed in the website of the Company and may be accessed at thelink http://unitedcreditltd.com/unitedadmin/upload/cmspage_486_data.pdf
As a matter of policy the Company appoints directors from various fields. The presentcomposition of the Board comprises of personnel with experience in finance statutorymatters and various economic activities.
The Nomination and Remuneration Committee has laid down the following criteria forperformance evaluation of the Independent Directors:
a) Contribution made by the Directors for successful operation of the Company; and
b) Benefits derived by the Company by the suggestions and advice given by thedirectors.
EVALUATION CRITERIA OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIVIDUALDIRECTORS
Pursuant to the applicable provisions of the Companies Act 2013 and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board of Directors evaluated the performance of the Independent Directors andthe entire Board.
The Board also evaluated the performance of the members of the various Committeesformed by the Company and every Director individually considering effectiveness of theadvice given by the concerned Director. In the opinion of the Board its performance andperformance of the Committees and Directors individually are satisfactory. In evaluatingthe performance of the Directors the Board followed the criteria formulated by theNomination and Remuneration Committee.
The concerned Directors were not present during their individual evaluation.
The Independent Directors have evaluated the performance of the non-independentdirectors and the Board as a whole as per the provisions of the applicable laws. They havealso reviewed the performance of the Chairperson of the Company taking into account theviews of non-executive directors.
PARTICULARS OF EMPLOYEES
Disclosure pursuant to the provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in Annexure IV.
The Company has no employees in respect of whom information under Rule 5(2) of the saidRules is required to be annexed.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy as per requirement of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company has also set up an Internal Complaints Committee.
During the year under review no complaint has been received.
During the calendar year ended 31st December 2015 the Company held workshops andawareness programmes for sensitising the employees with the provisions of the Act.Therewas also an orientation programme for the Members of the Internal Complaints Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as stipulated in Item No. B of Schedule V ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 has been appended to this report.
SUBSIDIARY AND ASSOCIATE COMPANIES
The Company has no subsidiary. United Nanotech Products Limited was an AssociateCompany in relation to the Company. During the year under review the Company has sold750100 equity shares of Rs.10/- each held by it in United Nanotech Products Limited. Assuch the Company has neither any subsidiary nor any associate as on 31st March 2016.
The Company has formulated a Policy for determining material subsidiaries.The Policyhas been disclosed on the website of the Company and may be accessed at the linkhttp://unitedcreditltd.com/unitedadmin/upload/cmspage_438_data.pdf
No fraud has been reported by the Auditors to the Audit Committee or the Board.
During the year under review the Company has not issued any shares including sweatequity shares to the employees of the Company under any scheme and shares withdifferential rights as to dividend voting or otherwise.
Your Directors take this opportunity to place on record their deep appreciation for thewholehearted and sincere co-operation the Company has received from the statutoryauthorities stakeholders customers and bankers.
Your Directors also wish to thank all the employees for their dedicated and committedservice to the Company.
| ||For and on behalf of the Board |
|Kolkata 700 016 ||A. K. Dabriwala |
|21st May 2016. ||Chairman & Managing Director |