Your Directors have pleasure in presenting the Annual Report of the Company togetherwith audited statements of accounts for the financial year ended 31st March 2018.
The summarized financial results of the Company for the financial year 2017-18 aregiven hereunder:
(Rs. in lakhs)
| ||2017-18 ||2016-17 |
|Revenue from operations & other income ||4190181 ||11910000 |
|Operating Profit (EBIDTA) ||105245 ||9800000 |
|Finance Cost ||0.40 ||0.50 |
|Depreciation & amortization ||- ||- |
|Profit before tax ||352237 ||9750000 |
|Provision for || || |
|- Current Tax (net) ||118723 ||2703000 |
|- Deferred Tax ||- ||191000 |
|- MAT Credit entitlement ||(16745) ||- |
|- Adjustment for prior period tax/tax on dividend ||- ||- |
|Net Profit ||250259 ||6906226 |
|Balance b/f from previous year ||11525057 ||4603124 |
|Profit available for appropriation ||11775316 ||11509350 |
|Appropriation:- ||4190181 ||11910000 |
|Balance Carried to Balance Sheet ||105245 ||9800000 |
In order to meet the future requirements of the Company your Directors have decidednot to recommend dividend for the Financial Year 2017-18.
INCOME FROM OPERATIONS
During the year under review the revenue from operations was Rs. 41.90 lakhs ascompared to Rs. 119.10 lakhs during the previous year.
TRANSFER TO RESERVES
The company transferred Rs. 33.95 lakhs to Statutory reserves in accordance with theprovisions of Section 45-IC of the Reserve Bank of India Act 1934.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015of the Listing Agreement entered into with the Stock Exchanges and Circular/Notifications/Directions issued by Reserve Bank of India from time to time the Management Discussionand Analysis of the financial condition and result of operations of the Company for theyear under review is presented in a separate section forming part of the Annual Report.
The company is committed to maintain the highest standards of Corporate Governance andadhere to the corporate Governance requirements set out by SEBI. A Report on CorporateGovernance as required under SEBI (Listing Obligation and Disclosure Requirements)Regulation 2015 of the Listing Agreement entered into with the Stock Exchanges is attachedas Annexure of the Annual Report.
A Certificate from M/s Kundan Agarwal & Associates Company Secretariesconfirming compliance with the conditions of Corporate Governance as stipulated under theaforesaid SEBI Regulations 2015 also forms part of the Annual Report.
(i) Share Capital
The paid-up Share Capital as on 31st March 2018 was Rs. 300 Lakhs. During the yearunder review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity.
(ii) Public Deposits
The Company being a Non-Deposit Accepting Non-Banking Finance Company has not acceptedany deposits from the public during the year under review and shall not accept anydeposits from the public without obtaining prior approval of the Reserve Bank of India(RBI).
(iii) Particulars of loans guarantees or investments
Particulars of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the Notes to the Financial Statements.
As a Non Deposit taking Non-Banking Finance Company your Company always aims tooperate in compliance with applicable RBI laws and regulations and employs its bestefforts towards achieving the same.
NUMBER OF MEETINGS OF THE BOARD
During the financial year 2017-18 six (6) Board Meetings were held on April 15 2017May 15 2017 August 12 2017 August 30 2017 November 14 2017 and February 14 2018.And as per companies act 2013 the maximum interval between any two meetings was not morethan 120 days.
COMMITTEES OF THE BOARD
During the year in accordance with the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulation 2015 of Listing Agreement the Boardre-constituted some of its Committees. The Committees are as follows:
Nomination and Remuneration Committee
Stakeholders' Relationship Committee
Risk Management Committee
Details of the said Committees along with their charters composition and meetings heldduring the year are provided in the "Report on Corporate Governance" a part ofthis Annual Report.
CHANGES IN COMPOSITION OF BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review i.e. 2017-18 Mr. Sahib Singh Gusain has been appointed asWhole-Time Director in place of Mr. Rakesh Babu and Mr. Jitendra Jain has been appointedas Independent Director in place of Mr. Soban Singh w.e.f. 30.08.2017.
b. Retire by Rotation
In accordance with Section 152 and other applicable provisions of Companies Act 2013Ms. Beenu Agarwal being Non-executive Director retires by rotation and being eligibleoffers herself for reappointment at the ensuing Annual General Meeting. The Boardrecommends her appointment.
c. Appointment of Women Director
With coming into force of the provisions of Companies Act 2013 the Board had alreadyappointed Ms. Beenu Agarwal as Women Director of the Company.
d. Appointment of Independent Directors
During the year under review Mr. Jitendra Jain (DIN: 00641261) was appointed asAdditional Director (in capacity of Independent director) of the company w.e.f 30thAugust 2017. His appointment was regularized by the members in the subsequent AGM of thecompany held on 29th September 2017.
e. Key Managerial Personnel
During the year under review i.e. 2017-18 Mr. Sahib Singh Gusain Whole Time Director(DIN: 00649786) ; Mr. Dinesh Kumar Chief Financial Officer; and Ms. Princy Anand Compliance officer & Company Secretary were designated as the Key Managerial Personnelof the Company pursuant to the requirements of the applicable provisions of Companies Act2013 read with its Rules by the Board of Directors and their terms and conditions of theappointment and remuneration was considered by the Board.
f. Board's Independence
Our definition of 'Independence' of Directors is derived from SEBI (Listing Obligationand Disclosure Requirements) Regulation 2015 and Section 149(6) of the Companies Act2013. Based on the confirmation / disclosures received from the Directors and onevaluation of the relationships disclosed the following Non- Executive Directors areIndependent in terms of SEBI (Listing Obligation and Disclosure Requirements) Regulation2015 of the Listing Agreement and Section 149(6) of the Companies Act 2013 :-
1. Mr. Jitendra Jain (DIN: 00641261)
2. Ms. Reena Gupta (DIN: 06966728)
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 ofthe section 134(5) of the Companies Act 2013:
(i) that in the preparation of the annual financial statements for the year ended March31 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(ii) that such accounting policies as mentioned in Note 2 of the Notes to theFinancial Statements have been selected and applied consistently and judgments andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at March 31 2018 and of the profit of theCompany for the year ended on that date;
(iii) 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;
(iv) that the annual financial statements have been prepared on a going concern basis;
(v) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
(vi) that proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION & EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulation 2015 Policy on Nomination and Remuneration ofDirectors Key Managerial Personnel Senior Management and other employees has beenformulated including criteria for determining qualifications positive attributesIndependence of a Director and other matters as required under the said Act and ListingAgreement.
The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas
Objectivity and Independence;
Guidance and support in context of life stage of the Company;
Understanding of the Company's business;
Understanding and commitment to duties and responsibilities;
Willingness to devote the time needed for effective contribution to Company;
Participation in discussions in effective and constructive manner;
Responsiveness in approach;
Ability to encourage and motivate the Management for continued performance andsuccess;
The evaluation involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis / her evaluation. Accordingly a process of evaluation was followed by the Board forits own performance and that of its Committees and individual Directors and also thenecessary evaluation was carried out by Nomination and Remuneration Committee andIndependent Director at their respective meetings held for the purpose.
RELATED PARTY TRANSACTIONS
No Related Party Transactions were entered into during the financial year 2017-18. AllRelated Party Transactions entered into in the past were on an arm's length basis and werein the ordinary course of business. There are no materially significant Related PartyTransactions made by the Company with promoters directors Key Managerial Personnel orother designated persons which may have potential conflict with the interest of theCompany at large.
On the recommendation of the Audit Committee the Board of Directors has adopted apolicy on Related Party Transactions. The Policy envisages the procedure governing relatedparty transactions required to be followed to ensure compliance with the applicable lawsand regulations as well as to ensure that the Related Party Transactions are managed anddisclosed in accordance with the strict legal and accounting requirements.
A statement of all related party transactions if any is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms & conditions ofthe transactions. The statement is supported by a certificate from the CFO.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany. REMUNERATION OF THE DIRECT ORS/KMP/EMPLOYEES:
The information required under Section 197 of the Act read with Rule 5(1) clause (i)and (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given below.
|Name of Director/KMP and Designation ||Ratio of remuneration of each director to the median remuneration of the employees ||% increase in remuneration in the FY 2017-18 |
|Rakesh Babu (upto 30.08.2017) Whole-Time Director ||1:1 ||Nil |
|Sahib Singh Gusain (w.e.f. 30.08.2017) Whole-Time Director ||1:1 ||Nil |
|Dinesh Kumar Chief Financial Officer ||1:1 ||Nil |
|Clause Under Rule 5(1) ||Prescribed Requirement ||Particulars |
|(iii) ||Percentage increase in the median remuneration of employees in the financial year ||Nil |
|(iv) ||Number of permanent employees on the rolls of company ||3 |
|(viii) ||Average Percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||Nil |
|(xii) ||Affirmation that the remuneration is as per the remuneration policy of the company ||It is hereby confirmed that remuneration paid to Director/KMP and other employees is as per the remuneration policy of the company |
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 as perprovisions of Section 134(3) is annexed herewith as Annexure 1 to this Director's Report.
STATUTORY AUDITORS & THEIR REPORT
M/s. STRG & Associates Chartered Accountants having ICAI Firm Registration No.014826N auditor of the company audited the annual accounts of the company.
The Auditor's Report does not contain any qualification reservation or adverse remark.
SECRETARIAL AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company had appointed M/s. Kundan Agarwal & Associates PracticingCompany Secretaries to undertake the Secretarial Audit of the Company for the financialyear 2017-18. The Secretarial Audit Report for financial year 2017-18 has been appendedas Annexure 2 to this Report.
The Auditor's Report does not contain any qualification reservation or adverse remark.The Board of the Directors at their Meeting held on 14th August 2018 has appointed M/s.Kundan Agarwal & Associates Practicing Company Secretaries to undertake theSecretarial Audit of the Company.
INTERNAL AUDITORS & THEIR REPORT
Pursuant to provisions of Section 138 of Companies Act 2013 and rules made there underthe company had appointed MAKS & Co. as Internal Auditor for the year 2017-18.
PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON RESEARCH ANDDEVELOPMENT FOREIGN EXCHANGE INFLOW/OUTFLOW ETC.
The requirements of disclosure with regard to Conservation of Energy in terms ofSection 134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014are not applicable to the Company since it doesn't own any manufacturing facility.
However the Company makes all efforts towards conservation of energy protection ofenvironment and ensuring safety. There are no earnings and outgoing Foreign Exchangeduring the year under review.
Your Company has established a 'Whistle Blower Policy and Vigil Mechanism' fordirectors and employees to report to the appropriate authorities concerns about unethicalbehavior actual or suspected fraud or violation of the Company's code of conduct policyand provides safeguards against victimization of employees who avail the mechanism andalso provide for direct access to the Chairman of the Audit Committee. The said policy hasbeen uploaded on the website of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and 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 and the date of the report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and company's operations in future.
RISK MANAGEMENT POLICY AND INTERNAL CONTROL
The Company has adopted a Risk Management Policy duly approved by the Board and alsohas in place a mechanism to identify assess monitor and mitigate various risks to keybusiness objectives. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Risk Management Committee Audit Committee and the Boardof Directors of the Company. The Company's internal control systems are commensurate withthe nature of its business and the size and complexity.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES
Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules there under theCompany has not received any complaint of sexual harassment during the year under review.
We are grateful to the Government of India the Reserve Bank of India the Securitiesand Exchange Board of India the Stock Exchanges and other regulatory authorities fortheir valuable guidance and support and wish to express our sincere appreciation for theircontinued co-operation and assistance. We look forward to their continued support infuture.
We wish to thank our bankers investors rating agencies customers and all otherbusiness associates for their support and trust reposed in us. Your Directors expresstheir deep sense of appreciation for all the employees whose commitment co-operationactive participation dedication and professionalism has made the organization's growthpossible.
Finally the Directors thank you for your continued trust and support.
For and on behalf of AAR Shyam India Investment Company Limited
|Sd/- ||Sd/- |
|Beenu Aggarwal ||Sahib Singh Gusain |
|Director ||Director |
|(DIN: 00056062) ||(DIN: 00649786) |
|Date: 30.08.2018 || |
|Place: New Delhi || |