Your Directors are pleased to present their 2 1 s t Annual Report on theBusiness and operations of the Company together with the Audited Statement of Accounts forthe year ended 31stMarch2017.
The financial performance of your Company for the year ended March 31 2017 issummarized below:
| ||(Rupees in Lacs) |
|Particulars ||2016-2017 ||2015-2016 |
|Sales ||919.085 ||1741.61 |
|Other Income ||(16.46) ||32.29 |
|Total Income ||902.62 ||1773.90 |
|Total Expenses ||910.51 ||1746.35 |
|Profit/(Loss) ||(7.89) ||27.55 |
|(-) Finance Cost ||0.30 ||0.42 |
|Profit/(Loss)Before Tax ||(8.19) ||27.13 |
|Tax ||- ||- |
|(-) Current Tax ||4 ||6.59 |
|(+) Deferred Tax || ||0.00 |
|Net Profit After Tax ||(12.20) ||20.53 |
|(-) Extraordinary Items ||0.00 ||0.00 |
|Net Profit ||(12.20) ||20.53 |
During the year under review the Company achieved a turnover of Rs. 919.085 Lacs(previous year Rs. 1741.61 Lacs) the Company has made a loss of Rs.12.20 Lacs (previousyear there was profit of Rs. 20.53). The profitability of the Company was lower comparedto last year on account of subdued equity market & Company has disbursed lower creditfacilities on account of lower credit growth & fear of Non- Performing Assets. TheCompany is been registered with the Reserve Bank of India as a Non-Banking FinancialCompany (NBFC). The Company has not accepted public deposits during the year under review.
Management Discussion and Analysis Report:
To avoid duplication between the Directors Report and the Management Discussion andAnalysis Report for the year we present below a composite summary of performance of thevarious business & functions of the Company.
The trend in slowdown in global growth continued during the year. India was the fastestgrowing large economy with a stable currency that performed better than the most emergingmarket currencies. If the industry players manage to restructure their operations as perthe new realities success will not be very hard to find now. India growth story remainedreasonably positive due to stable domestic consumption lower commodity & energyprices & hence improving macroeconomic parameters. However there are some negativefactors like drought rising Non-Performing Assets (NPA) of Banks & low credit growth.The Company is into investments activities of shares & securities. It remains to beseen whether the slew of initiatives announced by the Central Government likeMake inIndia'programme coal and telecom auctions increased FDI limits in certain sectors afinancial inclusion effort through its Pradhan Mantri Jan Dhan Yojana and India's improvedrating out look gives a fill up to the performance of the banking and financial sector inthe coming year.
The Company main activities is investment in shares & securities & lendingloans to individuals; corporate; etc. Being an investment Company it is largely dependenton the stock & money markets for its income. Subdued Equity markets lowered theCompany realized returns in equities. The Company equities portfolio is a combined oflisted & unlisted investments. The credit penetration in India is low compared toother economies. The NBFC penetration in India is even lower. Success of NBFC isattributed to the sharp focus on the product lines leading to better cost control bettercustomer services & consequently faster growth at higher profitability. The prospectof NBFC is bright on account of Government initiative like smart cities focus on ease ofdoing business huge latent credit need from self-employed & SME sector.The growth inthe sector is very good and Management expects better results in for the coming year. TheCompany is exploring various options to improve margins of the Company by having tightcontrol on expenses & exploring various business activities. The Stock market has beenstabled during 2016-17 & many IPO has received better response. Non-banking financecompanies (NBFCs) continued to play a critical role in making financial servicesaccessible to more of India's population. Given the unique business models and for manytheir focus on operational excellence NBFCs should continue to strengthen their positionin the financial services space in India.The NBFC segment has witnessed considerableconsolidation marked decline in non-performing assets both gross and netindicating that the segment has only become more robust. The significance of NBFCs hasbeen growing both in terms of funding as well as reaches. They have been able to penetrateinto unbanked and rural markets as the RBI has created and allowed "Small Bank"to cater to those areas where the banking network is not available. The Company is aSystemically Important NBFC with a record of consistent growth and profitability and acomprehensive product suite to meet the multiple financial needs of its customersincluding MSME lending consumer lending and corporate lending. The operation of thecompany during majority of the year was mainly centered in Finance Business and ShareTrading. The company was dealing in Lending Advancing and Depositing Money in Industrialand other Undertakings and Businesses and to deal in acquiring selling subscribingtransferring holding disposing and otherwise dealing and investing in sharessecurities movables etc. The Company being into finance and investment activity theimpact of movement of stock markets affectsits volatility. Despite various adverse factorswe firmly believe that Indian economic will grow and hence the growth of financialservices sector presents us with exciting opportunities like India's long-term growthstory remains intact not withstanding declining growth in the past year or two. Thispresents vast opportunities for us to grow our business in the medium to long term thoughshort-term gain remains a possibility. We further believe the policy liberalization andforward-looking regulatory changes will help markets grow in size. At the same time weperceive some threats for growth of financial services sector like macroeconomicenvironment including high inflation high interest rates liquidity issues globalcommodities prices fiscal and current account deficit and Euro zone crisis can playspoilsport with the India growth story. While positive Government policies and regulatorychanges do enlarge the scope of opportunities for financial sector companies lack of ordelay in reforms or certain regulatory changes can significantly impact the performance ormake an existing business model unviable. The Company conduct field investigation collectand verify KYC and other documents and carry out due diligence; when satisfied about thereputation and credentials of the potential borrower the deal is proposed. Antecedents ofall the prospective borrowers are verified through CIBIL RBI Defaulters List andenquiries with their existing bankers. The investment portfolio of the Company is managedby Investment Committee comprising members from the management and approved by the board.The execution of investment transactions is monitored on regular basis with reference totarget price. The Committee also lays down benchmarking and other operating guidelines.
Business performance and Segment Reporting
During the year under review the company has earned a Net loss of Rs. 12.20 Lacs asagainst Net Profit of Rs. 20.53 Lacs during the previous year 2015-16. The profit marginof the Company is on a lower side on account of subdued equity market & Company hasdisbursed lower credit facilities on account of lower credit growth & fear of Non-Performing Assets. Many new players have entered the market with huge funds with variousproducts having nationwide customer based &they are giving tough competition to theCompany. The company is engaged in the business Notebook & servicing of all brands ofcomputers laptop tab etc. which as per Accounting Standard 17 is considered the onlyreportable business.
Adequacy Of Internal Control:
The Company has robust internal control systems in place which are commensurate withthe size and nature of the business. The internal controls are aligned with statutoryrequirements and designed to safeguard the assets of the Company. The internal controlsystems are complemented by various Management Information System (MIS) reports coveringall areas. Increased attention is given to auto generation of MIS reports as againstmanual reports to take care of possible human errors or alteration of data. The Managementreviews and strengthens the controls periodically.
Human Resource Development
The Company recognizes the importance of Human Resource as a key asset instrumental inits growth. The Company believes in acquisition retention and betterment of talented teamplayers. With the philosophy of inclusive growth the Company has redefined itsperformance management system. The new system focuses on progression of individualemployees together with organizational goals. Under the new system increased thrust willbe on job rotation and multi-skilling.
The company recognizes the importance of human value and ensures that properencouragement both moral and financial is extended to employees to motivate them.
The Company is into single reportable segment only
The Compliance function of the Company is responsible for independently ensuring thatoperating and business units comply with regulatory and internal guidelines. TheCompliance Department of the Company is continued to play a pivotal role in ensuringimplementation of compliance functions in accordance with the directives issued byregulators the Company's Board of Directors and the Company's Compliance Policy. TheAudit Committee of the Board reviews the performance of the Compliance Department and thestatus of compliance with regulatory/internal guidelines on a periodic basis.
New Instructions/Guidelines issued by the regulatory authorities were disseminatedacross the Company to ensure that the business and functional units operate within theboundaries set by regulators and that compliance risks are suitably monitored andmitigated in course of their activities and processes.
Investors are cautioned that this discussion contains statements that involve risks anduncertainties. Words like anticipate believe estimate intend will expect and othersimilar expressions are intended to identify "Forward Looking Statements". Thecompany assumes no responsibility to amend modify or revise any forward lookingstatements on the basis of any subsequent developments information
or events. Actual results could differ materially from those expressed or implied.
The Board of Directors does not recommend any Dividend for the year under review
The Company has consolidated equity shares as to 10 equity shares of Re. 1/- each into1 Equity Share of Rs. 10/- each during the year 2016-17 under review.
Out of the profits available for appropriation no amount has been transferred to theGeneral Reserve and the balance amount of Rs. (20.53) lacs has been carried forward toprofit & loss account.
Acceptance Of Fixed Depostis:
The Company has not accepted any Fixed Deposits from general public with in the purviewof Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit)Rule 2014 during the year under review.
Subsidiaries Joint Ventures and Associates Companies:
The Company does not have any subsidiaries joint venture & associates Company.
Particulars of Contract or Arrangement with Related Party
There is no transaction with Related Party which requires disclosure under Section134(3) (h) of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules2014.There being no material related party transactions as defined under Regulation 23 ofthe SEBI (LODR) Regulations 2015 there are no details to be disclosed in Form AOC 2 in that regard. The policy on materiality of related party transactions and also ondealing with related party transactions as approved by the Board may be accessed on theCompany website. All related party transactions which were entered into during the yearwere on arm's length basis and were in the ordinary course of business and did not attractprovisions of section 188 of the Companies Act 2013 and were also not material relatedparty transactions under Regulation 23 of the SEBI (LODR) Regulations 2015. There are nomaterial transactions entered into with related parties during the period under reviewwhich may have had any potential conflict with the interests of the Company. Pursuant toRegulation 26(5) of the SEBI (LODR) Regulations 2015 senior made periodical disclosuresto the Board relating to all material financial and commercial transactions where theyhad or were deemed to have had personal interest that might have been in potentialconflict with the interest of the Company & same was nil.
Loans Investment and Guarantees by the Company
There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013. Particulars ofInvestment made/loan given under section 186 of the Companies Act 2013 are provided inthe financial statement.
Internal Financial Controls
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observations has been received from the Auditor of the Company for inefficiency orinadequacy of such controls.
Disclosures under Section 134(3) (I) of the Companies Act 2013
No material changes and commitments which could affect the Company financial positionhave occurred between the end of the financial year of the Company and the date of thisreport except as disclosed elsewhere in this report.
During the year under review Ms. Veenu Devidas Chougule has been appointed asAdditional Director on the Board of Directors of the Company w.e.f. 1stFebruary 2017. And also the Company has accepted the Resignation of Mr. Naresh MadhukarTambe and his cessation will be effective from 1st February 2017. Further theCompany has accepted the resignation of Mr. Manish Bhupendra Thakkar w.e.f. 10thJanuary 2017.
Directors Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee has frameda Remuneration policy providing criteria for determining qualifications positiveattributes independence of a Director and a policy on remuneration for Directors keymanagerial personnel and other employees. The detailed Remuneration policy is placed onthe Company's website at www.aadhaarltd.com.
Consolidated Financial Statement
The audited consolidated financial statement of the Company prepared in accordance withrelevant Accounting Standards (AS) issued by the Institute of Chartered Accountants ofIndia forms part of this Annual Report. The Compliance Officer will make these documentsavailable upon receipt of a request from any member of the Company interested in obtainingthe same. These documents will also be available for inspection at the Registered Officeof your Company during working hours up to the date of the Annual General Meeting.
Number of Meeting of Board of Directors
The Board of Directors have met 5 times and Independent Directors once during the yearended 31st March 2017 in accordance with the provisions of the Companies Act 2013 andrules made there under. All the Directors actively participated in the meetings andcontributed valuable inputs on the matters brought before the Board of Directors from timeto time.
Declarations by Independent Director
Pursuant to the provisions of Sub-Section (7) of Section 149 of the Companies Act 2013the Company has received individual declarations from all the Independent Directorsconfirming that they fulfill the criteria of independence as specified in Section 149(6)of the Companies Act 2013.
Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rules madethere under the current auditors of the Company M/s. D. P. Agarwal & AssociatesChartered Accountants Mumbai hold office up to the conclusion of 23rd AnnualGeneral Meeting of the Company. However their appointment as Statutory Auditors of theCompany is subject to ratification by the members at every Annual General Meeting. TheCompany has received a certificate from the said Statutory Auditors that they are eligibleto hold office as the Auditors of the Company and are not disqualified for being soappointed. Necessary resolution for ratification of appointment of the said Auditor isincluded in this Notice.
The observations and comments furnished by the Auditors in the report read togetherwith the notes to Accounts are self-explanatory and hence do not call for any furthercomments under Section 134 of the Companies Act 2013.
Directors Responsibility Statement:
In accordance with the requirement of Section 134 of the Companies Act 2013 the Boardof Directors of the Company confirms:
i. In the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures.
ii. That the Directors haves elected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and Fairview of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Companyforthe year ended 31stMarch 2017.
iii. That the Directors have taken sufficient and proper care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting material fraudandother irregularities.
iv. That the Directors have prepared the Annual Accounts on a going concern basis.
v. There are no material changes & commitments if any affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate & the date of the report.
vi. There are proper systems have been devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
vii. 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.
viii. Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2016-17.
Annual Evaluation by the Board of Its Own Performance Its Committees and IndividualDirectors
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual Directors. The result of the evaluation issatisfactoryand adequate and meets the requirement of the Company. Information on themanner in which the annual evaluation has been made by the Board of its own performanceand that of its Committee and individual Directors is given in the Corporate GovernanceReport.
Details of Committee of Directors
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors and Stakeholders Relationship/Grievance Committee of Directors number ofmeetings held of each Committee during the financial year 2016-17 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report and forming part of the report.
The recommendation by the Audit Committee as and when made to Board has been acceptedby it.
During the year Management of the Company evaluated the existing Risk ManagementPolicy of the Company to make it more focused in identifying and prioritizing the risksrole of various executives in monitoring & mitigation of risk and reporting process.Its aim is to enhance shareholders value and provide an optimum risk-reward tradeoff. TheRisk Management Policy has been reviewed and found adequate to the requirements of theCompany and approved by the Board. The Management evaluated various risks and that thereis no element of risk identified that may threaten the existence of the Company.
Secretarial Audit Report
A Secretarial Audit Report for the year ended 31st March 2017 in prescribed form dulyaudited by the Practicing Company Secretary CS Rakesh Kapur Mumbai is annexed herewithand forming part of the report.
Extract of Annual Return
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return isannexed herewith and forming part of the report. (Annexure I)
Acceptance of Fixed Deposits
TheCompany is registered with the Reserve Bank of India as non-deposit accepting NBFC(NBFC-ND) under section 45-IA of the RBI Act 1934. In terms of Non-Banking Financial(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions2007 the Company is categorized as a "Systemically Important Non-Deposit takingNon-Banking Financial Company.
As per the Non-Banking Finance Companies RBI Directions 1998 the Directorshereby report that the Company has not accepted any Fixed Deposits from general publicduring the year and will also not accept public deposits without obtaining prior approvalof Reserve Bank of India.
As a Systemically Important Non Deposit taking Non-Banking -Finance Company yourCompany always aims to operate in compliance with applicable RBI laws and regulations andemploys its best efforts towards achieving the same.
Pursuant to the SEBI (LODR) Regulations 2015 a separate section on CorporateGovernance forms part of the Annual Report. All Board members and Senior Managementpersonnel have affirmed compliance with the Code of Conduct for the year 2016-17. Adeclaration to this effect signed by the Managing Director of the Company is contained inthis Annual Report. The Managing Director and CFO have certified to the Board with regardto the financial statements and other matters as required under Regulation 17(8) of theSEBI (LODR) Regulations 2015.
Certificate from the Statutory Auditors of the Company regarding compliance ofconditions of Corporate Governance is annexed to this Report.
Whistle Blower Mechanism
The Company has put in place Whistle Blower Mechanism. The detailed mechanism is givenin Corporate Governance Report forming part of this report
Corporate Social Responsibility
The Section 135 of the Companies Act 2013 regarding Corporate Social ResponsibilityCommittee is not applicable to the Company as the Net Profit of the Company is below thethreshold limit prescribed by the Companies Act 2013.
Managing Director's Certificate
A Certificate from the Managing Director in respect of the Financial Statements formspart of the Annual Report.
Conservation Of Energy Technology Absorptions and Foreign Exchange Earnings and Outgo
The information relating to the conservation of energy technology absorption foreignexchange earnings and outgo under provisions of 134 of the Companies Act 2013 is notapplicable to the Company considering the nature of its business activities. Further theCompany has not earned nor spends foreign exchange during the year under review.
Significant and Material Orders Passed By the Regulators or Courts
During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals which may impact the going concern status of theCompany and its operations in future.
Presentation of Financial Statements
The financial statements of the Company for the year ended 31st March 2017have been disclosed as per Schedule III to the Companies Act 2013.
A copy of audited financial statements of the said Companies will be made available tothe members of the Company seeking such information at any point of time. Disclosures asprescribed by Non-Banking Financial (Non-Deposit Accepting or Holding) CompaniesPrudential Norms (Reserve Bank) Directions 2007 and other NBFC Regulations have been madein this Annual Report. A cash flow statement for the year 2016-2017 is attached to theBalance Sheet. Pursuant to the legislation Prevention Prohibition and Redressal ofSexual Harassment of Women at Workplace Act 2013' introduced by the Government of Indiathe Company has a policy on Prevention of Sexual Harassment at workplace. There was nocase reported during the year under review under the said policy.
Details as required under the provisions of section 197 (12) of the Companies Act 2013read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are placed on the Company's website i.e. www.aadhaarltd.com as an Annexureto the Director Report. Details as required under the provisions of section 197 (12) ofthe Companies Act 2013 read with Rule 5(2) and 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are placed on the Company's websitei.e. www.aadhaarltd.com as an Annexure to the Director Report. A physical copy of the samewill be made available to any shareholders on request. A cash flow statement for the year2016-17 is attached with the Balance-Sheet.
The Directors take this opportunity to thank the Financial Institutions BanksBusiness Associates Central and State Government authorities Regulatory authoritiesStock Exchanges and all the various stakeholders for their continued co-operation andsupport to the Company and look forward to their continued support in future.
The Company thanks all of the employees for their contribution to the Company'sperformance. The Company applaud all the employees for their superior levels ofcompetence dedication and commitment to your Company.
|By Order of the Board || |
|For Aadhaar Ventures India Limited |
|Jils Raichand Madan ||Somabhai Sunderbhai Meena |
|Director ||Managing Director |
|DIN 02810555 ||DIN-05138990 |
|Place: Surat || |
|Date: 5thAugust 2017 || |