Your Directors have pleasure in presenting the 33RD ANNUAL REPORT on the business andoperations of your company along with the Audited Financial Statements for the year ended31st March 2019. The Consolidated Financials of the Company and its subsidiaries havebeen referred.
1. FINANCIAL HIGHLIGHTS
The Financial Results for the year ended 31st March 2019.
| || |
| ||31/03/2019 ||31/03/2018 ||31/03/2019 ||31/03/2018 |
|Profit/(Loss) from capital market operations ||843.20 ||1034.93 ||(254.08) ||2789.25 |
|Other income ||14.48 ||30.63 ||8.87 ||41.58 |
|Profit/(Loss) before depreciation & tax ||704.53 ||842.59 ||(440.74) ||872.48 |
|Interest ||0.00 ||0.00 ||0.00 ||0.00 |
|Depreciation ||14.37 ||42.94 ||14.37 ||42.94 |
|Profit/(Loss) before tax ||690.16 ||799.65 ||(455.11) ||829.54 |
|Provision for tax ||140.00 ||240.00 ||140.00 ||240.00 |
|Tax for earlier years ||0.00 ||0.00 ||0.00 ||0.00 |
|Deferred tax ||(0.59) ||(8.69) ||(0.59) ||(8.69) |
|Profit/(Loss) aftertax ||550.75 ||568.34 ||(594.52) ||598.23 |
|Other Comprehensive Income ||(27.15) ||467.02 ||(27.15) ||467.02 |
|Total Comprehensive Income for the period ||523.6 ||1035.36 ||(621.67) ||1065.25 |
2. BUSINESS & PERFORMANCE
During the year under review the Company has made Profit of Rs.550.75 lacs againstProfit of Rs.568.34 lacs in the last financial year. The total comprehensive income/profitof the company for the year under review is Rs. 523.60 lacs against comprehensiveincome/profit of Rs.1035.36 lacs in the last financial year.
3. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2018 was Rs.10.50 crore. No additionsand alterations to the capital were made during the financial year 2018-19.
The Directors have not recommended any dividend for the financial year 2018-19.
Your Company has declared and paid a dividend (25%) of Rs.2/50 per share of the facevalue of Rs.10 each for the financial year 2017-18.The dividend approved by the Members atthe Annual General Meeting has absorbed a sum of Rs. 315.94 lacs inclusive of taxes.
Your Company has declared and paid a dividend (20%) of Rs.2 per share of the face valueof Rs.10 each for the financial year 2014-15.The dividend approved by the Members at theAnnual General Meeting has absorbed a sum of Rs. 251.99 lacs inclusive of taxes
Transfer of Unclaimed/Unpaid amounts to the Investor Education and Protection Fund("IEPF")
Pursuant to Section 205A and 205C and other applicable provisions if any of theCompanies Act 1956 all unclaimed/unpaid dividend as applicable remaining unclaimed/unpaidfor a period of seven years from the date they became due for payment were required to betransferred to IEPF. Sections 124 and 125 of the Companies Act 2013 read with theInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 ('IEPF Rules') both of which were applicable with effect from 7th September2016 also contain similar provision for transfer of such amounts to the IEPF. Accordinglyall unclaimed /unpaid dividend for a period of seven years from the date they became duefor payment in relation to the company have been transferred to the IEPF established bythe Central Government. No claim shall be entertained against the company for the amountsso transferred.
The following table gives information relating to outstanding dividend accounts and thedates by which they can be claimed by the shareholders.
|Financial Year ||Date of Declaration ||Last date for claiming unpaid dividend |
|2014 -2015 ||17th July 2015 ||16th July 2022 |
|2017 -2018 ||12th July 2018 ||11th July 2025 |
5. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Our Company has granted loans to wholly owned subsidiary Twentyfirst Century Sharesaand Securities Limited Loans guarantees and investments under Section 186 of theCompanies Act 2013 form part of the Notes to the financial statements provided in thisAnnual Report.
6. Transfer to General Reserve
Your Company does not propose any transfer of funds to the General Reserve.
Your Company has not accepted any deposits from the public during the year underreview. There are no outstanding deposits as on 31st March 2019.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties referred to Section188(1) of the Companies Act 2013 in the prescribed Form AOC 2 is appended as AnnexureII.
9. MANAGEMENT'S DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management's Discussion and Analysis isset out in this Annual Report Annexure-A.
10. RISK MANAGEMENT REPORT
Although the company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion. Therefore in accordance withthe provisions of the listing agreement the Board members were informed about riskassessment and minimization procedures after which the Board formally adopted steps forframing implementing and monitoring the risk management plan for the company.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The common risksinter alia are:
Regulations competition Business risk Investments retention of talent and expansionof facilities.
Business risk inter-alia further includes financial risk political risk fidelityrisk legal risk. As a matter of policy these risks are assessed and steps as appropriateare taken to mitigate the same.
11. BOARD POLICIES
The details of the policies approved and adopted by the Board are provided in AnnexureVIII to the Board's Report.
12. HUMAN RESOURCES
The well-disciplined workforce which has served the company for the last 5 years liesat the very foundation of the company's major achievements and shall well continue for theyears to come. The management has always carried out systematic appraisal of performanceand imparted training at periodic intervals. The company has always recognized talent andhas judiciously followed the principle of rewarding performance.
13. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has amended the POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUALHARASSEMENT giving effect to the recent amendments in the provisions of the Companies Act2013made on 31st July 2018 and SEBI (LODR) Regulations 2015 and this is available in thewebsite of the company www.tcms.bz > Investor Relations > Corporate Information >Policies.
The Company has constituted an Internal Complaint Committee with three members as perthe provisions of the sexual harassment of women at workplace (prevention prohibition andredressal) Act 2013 and complied with the provisions of the same.
Internal Complaint Committee Members
1. Presiding Officer - Ms. Jaylaxmi Mukta (Employee of the Company)
2. Member - Ms. Dipti D.Sakpal (Independent Woman Director of the Company)
3. Member - Mr. BhaskarShetty (CFO of the Company)
The Committee met once in the financial year 2018-19 on 14th November 2018 to assessthe position in the company.
The Company has displayed in the Notice Board of the company the particulars regarding
1. Instructions to the employees
2. Procedure to be followed for lodging complaint and in redressal.
3. Complaint mechanism
The Company is committed to provide a safe and conducive work environment to itsemployees during the financial year. Your Directors state that during the financial yearthere were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
14. SUBSIDIARY COMPANIES
Your Company has one subsidiary viz. TWENTYFIRST CENTURY SHARES AND SECURITIESLIMITED. The subsidiary company is engaged in Investment & Trading in Shares andDerivatives.
There are no associate companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act"). Further there has been no material change in the nature ofbusiness of the subsidiaries.
Shareholders interested in obtaining a copy of the audited annual accounts of thesubsidiary company may write to the Company Secretary.
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC-1which forms part of the annual report.
Performance and financial position of the subsidiary companies is given in Annexure-I.
15. CORPORATE GOVERNANCE REPORT MANAGEMENT DISCUSSION & ANALYSIS AND OTHERINFORMATION REQUIRED UNDER THE COMPANIES ACT 2013 AND SEBI (LODR) REGULATIONS 2015
As per provisions of the SEBI (LODR) Regulations 2015 Management Discussion andAnalysis report (ANNEXURE A) and Corporate Governance Report with Auditors' certificatethereon (ANNEXURE - B) are attached and form part of this report.
16. MATERIAL CHANGES BETWEEN THE END OF FINANCIAL YEAR AND THE DATE OFREPORT
There are no material changes and commitments occurred between the end of the financialyear of the company to which the financial statements relate and the date of the reportaffecting the financial position of the company.
17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
18. AUDITORS STATUTORY AUDITORS
Messrs. Lakhani & Lakhani Mumbai Chartered Accountants (Firm Registration Number115728W) has been appointed as statutory auditors of the company at the Annual GeneralMeeting held on 17th July 2015 from the conclusion of 29th Annual General Meeting till theconclusion of 33rd Annual General Meeting of the company. The term of 5 years of thepresent Statutory Auditors is expiring at the ensuing 33rd Annual General Meeting (AGM)and they have expressed their inability to continue for the next term of 5 years.
In the place of retiring auditors the Board of Directors of the company has appointedM/s. Shankar & Kishor Chartered Accountants Mumbai (Firm Registration Number112451W) from the conclusion of 33rd Annual General Meeting (From FY2019-20) till theconclusion of 37th Annual General Meeting (Till FY 2023-24) of the company subject to theapproval and ratification by the members of the company in the Annual General Meeting(AGM) to be held on 15th July 2019.
REPLY TO THE OBSERVATIONS MADE BY THE STATUTORY AUDITOR
Statutory Auditors in their report have made the following observations:
1. Non Provision of Doubtful Loans & Advances amounting to Rs.2272.77 lacs advancedto its subsidiary company and Group Company.
2. We further report that had the observation made by us above been considered theloss for the year would have been Rs.1722.02 lacs (as against the reported profit figureof Rs.550.75 lacs) and loss after considering accumulated figures of previous years wouldhave been Rs.46.62 lacs (as against reported figure of profit of Rs. 2226.15 Lacs) and thebalance of amount due from subsidiary company and group company would have been Rs. Nil(as against the reported figure of Rs.2272.77 lacs).
Our Reply: Regarding the observation for non-provision for Doubtful Loans &Advances amounting to Rs.2272.77 lacs made to the subsidiary company and a group companythe management is of the opinion that the subsidiary is confident of repaying the currentShort Term Loans & Advances amounting to Rs.2250.64 lacs (considered as Doubtful Loans& Advances by the auditor) representing borrowings made during this financial year2018-19 in the next fiscal. The subsidiary company is making efforts to repay the dues tothe holding company through improved profitability.
In respect of the balance amount of Rs.22.13 lacs is receivable from a related companyand the company is proceeding legally to recover the same.
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 M/s Lakshmmi Subramanian & Associates Practising Company Secretaries (CPNo.1087 FCS:3534) Company Secretaries to undertake the secretarial audit of the companyfor three years from the financial year ended 31st March 2019 (FY 2018-19). TheSecretarial Audit Report is annexed herewith as 'Annexure V'.
REPLY TO THE OBSERVATIONS MADE BY THE SECRETARIAL AUDITOR Secretarial Auditors in theirreport have made the following observations:
1. The Company is engaged in investment and trading activity with their own surplusfunds. However without any registration/license required under RBI (NBFC Rules andRegulations).
The Company is in the process of filing an application for registration/licenserequired under RBI (NBFC Rules and Regulations).
2. The Company is yet to file relevant forms for appointment of Internal Auditor asrequired under Section 179(3) of the Companies Act 2013.
Action has been initiated to file the relevant forms for appointment of InternalAuditor as required under Section 179(3) of the Companies Act 2013.
3. The Company has not spent expenditure on Corporate Social Responsibility amountingto Rs. 5.30 Lakhs pertaining to FY 2017-18 and 2018-19 though a provision for the samehas been made.
The company could not identify proper activity under CSR during the financial year2018-19 and is confident of spending the amount during the financial year 2019-20.
4. The Company has extended Interest-free Loans to its Wholly-Owned Subsidiary and thecompliance of provisions of Section 186(7) of the Companies Act 2013 is yet to beregularized.
Board of Directors would like to obtain a legal opinion in the matter before proceedingfurther.
5. The Company is in the process of strictly complying with the observations made inthe Secretarial Compliance Report under SEBI (PIT) Regulations.
All the investments related activities are done under the direct supervision of theChairman of our company. As per the provisions of the Companies Act 2013 the company hasappointed M/s. Om Prakash S.Chaplot& Co Chartered Accountants Mumbai as an InternalAuditor for the company for the financial year 2018-19.
The Company proposes to continue their services and appoint M/s. Om Prakash S.Chaplot& Co Chartered Accountants Mumbai as an Internal Auditor for the financial year2019-20 to ensure proper and adequate systems and procedures commensurate with its sizeand nature of its business.
19. AUDIT COMMITTEE
The details pertaining to the composition of the Audit Committee are included in theCorporate Governance Report which is a part of this report
20. CORPORATE SOCIAL RESPONSIBILITY
During the financial year 2017-18 the company has spent Rs.22.75 lacs on the CorporateSocial Responsibility (CSR) activities. Your Company knows the importance of CorporateSocial Responsibility (CSR) activities of the company under the provisions of theCompanies Act 2013. Accordingly a committee has been formed under the chairmanship ofMr.Sundar Iyer Chairman of the company.
During the financial year 2018-19 the company has provided Rs.5.30 lacs for spendingunder CSR Activities. The Committee could not identify and approve the activities duringthe year for such expenditure. The same will be done during the next financial year2019-20.
The annual report on CSR activities for the financial year 2018-19 is enclosed herewithas Annexure VII
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE INFLOW &OUTGO
The Company had taken steps to conserve use of energy in its office consequent towhich energy consumption has been minimized. No additional Proposals/ Investments weremade to conserve energy. Since the company has not carried on industrial activitiesdisclosures regarding impact of measures on cost of production of goods total energyconsumption etc. are not applicable.
Company's business does not require any technology absorption and hence no reporting isrequired to be furnished under this heading.
22. BOARD EVALUATION
Pursuant to the provisions of companies Act 2013 and of the Listing Agreement theBoard has carried out annual performance evaluation of its own performance the directorsindividually as well the evaluation of the working of its Audit Nomination &Remuneration and Stakeholder committee. The manner in which the evaluation has beencarried out has been explained in Corporate Governance Report.
23. DIRECTORS AND KEY MANAGEMENT PERSONNEL
At the 28th Annual General Meeting of the company held on 27th June 2014 the companyhad appointed the existing independent director Shri S.Hariharan (DIN 02545610) asindependent director under the companies Act 2013 for a period of 5 years commencing from27thJune 2014.The Independent Director has given declaration that he meets the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and listingagreement. The term of this Independent Director expired on 31st March 2019. Freshappointment of Independent Director is not made this year in his place since the companyhas got the required number of Independent Directors.
At the 29th Annual General Meeting of the company held on 17th July 2015 the companyhad appointed the existing Independent Director Shri Iyer Vishwanth (DIN 00137166) for aperiod of 5 years till 16th July 2020 and Ms. Sita Sunil (DIN 00041722) as an IndependentWoman Director for a period of 5 years till 20th April 2020.
At the 31st Annual General Meeting of the company held on 28th September 2017 companyappointed Ms. Dipti Dinesh Sakpal (DIN07305797) as Independent Woman Director with effectfrom 18th April 2017as recommended by the Board of Directors in the vacancy created onaccount of the resignation of Independent Woman Director - Ms. Sita Sunil for a period of5 years till 17th April 2022.
All the three Independent Directors have given declaration that they meet the criteriaof independence as laid down under section 149(6) of the Companies Act 2013 and oflisting agreement.
Shri Sundar Iyer (DIN 00481975) Executive Director of our company shall retire byrotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment. As stipulated in terms of the listing agreement with the stock exchangesthe brief profile of Shri Sundar Iyer is provided in the report on corporate governancewhich forms an integral part of this Annual Report.
The Key Management Personnel of the company are as under:
1. Mr. Sundarlyer - Chief Executive Officer
2. Mr. A.V.M.Sundaram- Company Secretary
3. Mr. BhaskarShetty - Chief Financial Officer
24. POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION
Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under section 178(3) of the Act are covered in Corporate GovernanceReport which forms part of this Report. Further information about elements ofremuneration package of individual directors is provided in the extract of Annual Returnas provided under Section92(3) of the Act is enclosed at Annexure-VI in the prescribedform MGT-9 and forms part of this Report.
25. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company. A declaration to thiseffect has been signed by Mr. Sundar Iyer Chairman & Chief Executive Officer andforms part of the Annual Report.
26. RELATIONSHIP BETWEEN DIRECTORS INTER-SE
Mr.Krishnan Muthukumar Non-Executive Director is related to Mr.Sundar Iyer Chairmanand Chief Executive Officer of the company. None of the other Directors are related toeach other within the meaning of the term "relative" as per Section 2 (77) ofthe Act and the provisions of the revised listing agreements.
27. EVALUATION OF DIRECTORS BY INDEPENDENT DIRECTORS' MEETING
During the year under review the Independent Directors met on 30thMarch 2019 interalia to:
i. Review the performance of non-independent directors and the Board as a whole
ii. Review the performance of the Chairperson of the company taking into account theviews of executive directors and non-executive directors
iii. Assess the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties
28. EVALUATION OF INDEPENDENT DIRECTORS BY DIRECTORS' MEETING
During the year under review the Directors (other than Independent Directors) met on30th March 2019 inter alia to:
i. Review the performance of the independent directors of the company taking intoaccount the views of executive directors and non-executive directors.
ii. Assess the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
29. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The information about internal financial control system and their adequacy is set outin the Management Discussion & Analysis report which is attached and forms part ofthis Report.
30. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. That in the preparation of the annual financial statements for the year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made That arereasonable and prudent so as to give a true and fair view of the state of affairs of TheCompany as at 31st March 2019 and of the profit of the Company for the year ended on thatdate;
c. That proper and sufficient care has been taken 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. That the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
31. INDEPENDENT DIRECTORS' DECLARATION
Mr. Iyer Vishwanath Mr.S.Hariharan and Ms. Dipti D. Sakpal who are IndependentDirectors as on 31st March 2019 have submitted a declaration that each of them meets thecriteria of independence as provided in Sub-Section (6) of Section 149 of the Act and interms of the provisions of SEBI (LODR) Regulations 2015. Further there has been nochange in the circumstances which may affect their status as independent director duringthe year 2018-19.
32. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has practice of conducting familiarization program of the independentdirectors as detailed in the Corporate Governance Report which forms part of the AnnualReport.
33. PARTICULARS OF REMUNERATION
The information required under Section 197(12) of the Companies Act 2013 read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is not applicable as none of the directors of the company are receiving anyremuneration from the company.
The remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the company. Particulars of remuneration/ Sitting Fees paidare detailed in Annexure-lll to the Director's Report.
34. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
35. VIGIL MECHANISM
The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns. For details please refer to the Corporate Governance Reportattached to this Report.
The Board of Directors would like to thank all employees of the Company and alsoCompany's shareholders auditors customers and bankers for their continued support.
37. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces and other associated and incidental factors may however lead to variation in actualresults.
| ||For and on behalf of the Board |
|Place: Mumbai ||Sundarlyer |
|Date: 22nd May 2019 ||Chairman & CEO |