Your Directors have pleasure in presenting their 33rd Annual Report on the business andoperations of the Company and Audited Statement of Accounts for the year ended 31st March2019.
1. FINANCIAL HIGHLIGHTS:
The Board's Report is prepared based on the standalone financial statements of theCompany.
| || || ||(Rs. in Lakhs) |
|Sr. No. ||Particulars ||2018-2019 ||2017-2018 |
|1. ||Net Sales/ Income ||101.08 ||78.45 |
|2. ||Total Expenditure || || |
| ||i) Employee benefit Expenses ||1.50 ||7.25 |
| ||ii) Depreciation ||0.97 ||1.04 |
| ||iii) Other Expenditure ||9.22 ||(32.43) |
| ||Total ||11.69 ||(24.14) |
|3. ||Profit (Loss) Before Tax ||89.39 ||102.59 |
|4. ||Provision for taxation || || |
| ||i) Current Tax ||16.99 ||11.25 |
| ||ii) Deferred Tax ||1.15 ||(0.43) |
| ||iii) Earlier year Tax ||0.76 ||0.03 |
|5. ||Profit (Loss) After Tax ||70.49 ||91.74 |
|6. ||Balance carried from previous year ||27.99 ||2.97 |
|7. ||Amount Available for Appropriation ||98.48 ||94.71 |
|8. ||Appropriations: || || |
| ||Dividend ||- ||(40.00) |
| ||Provision/Reversal of Dividend || || |
| ||Distribution Tax ||0.15 ||(8.37) |
| ||Transferred to Statutory Reserve ||14.10 ||(18.35) |
|9. ||Balance carried to Balance Sheet ||84.53 ||27.99 |
|10. ||Earning per Equity Shares ||0.18 ||0.23 |
We are pleased to inform that the Board of Directors has recommended dividend of Re.0.10 Paisa per equity share of Re.1/- each (i.e. 10% of face Value) aggregating Rs.4000000/- (excluding distribution tax as applicable) for the financial year ended 31stMarch 2019.
As required under Section 45IC of the Reserve Bank of India Act 1934 20% of the netprofits are required to be transferred to a Special Reserve Account. Therefore an amountof Rs. 14.10 Lakhs which equal to 20% of the net profits has been transferred to saidReserve.
During the period under review there was a growth in the Revenue of the Company by28.85% i.e total income of Rs. 101.08 Lakhs as Compared to Previous Year: Rs 78.45 Lakhs.The Company has earned the Net Profit of Rs.70.49 Lakhs (Previous Year Net Profit: Rs.91.74 Lakhs). Your directors are confident that the performance for the coming years isexpected to improve with expected improvements in the economic activities.
5. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Report in form MGT-9 as requiredunder Section 92(3) of the Companies Act 2013 read with rule 12(1) of theCompanies(Management and Administration) Rules 2014 as amended from time to time areincluded in this Report as Annexure-1 and forms an integral part of this report.
6. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors state that-
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors 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;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) 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
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
7. DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTMENTS / RESIGNATIONS DURING THEYEAR:
During the year under review following changes takes place in the constitution of theBoard.
1. Ms. Hema Bhagtani was appointed as a company Secretary cum compliance officer of thecompany with effect from 22nd March 2019.
2. Mr. Sunil Bhiwandkar was appointed as a Chief Financial Officer with effect from22nd March 2019.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto is disclosed inForm No. AOC-2 which is enclosed as Annexure 2.
9. PARTICULARS OF EMPLOYEES:
(1) The Information pursuant to rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is described in below table:-
|Sr. No. ||Particulars ||Remarks || || || |
|1. ||The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year. ||Not applicable since no remuneration has been paid to the Directors. || || || |
|2. ||The percentage increase in the remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year. ||Not applicable since no remuneration has been paid to the Directors. || || || |
|3. ||The percentage increase in the median remuneration of employees in the financial year (in. Lacs) ||Median Remuneration ||Median Remuneration ||% Increase || |
| || ||FY 2018-2019 ||FY 2017-2018 || || |
| || ||0.32 ||3.62 ||-- || |
|4. ||The number of permanent employees on the roll of Company. ||01(One) || || || |
|5. ||Average percentile increase already made in the salaries of employees other than 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 || ||FY 2018-2019 ||FY 2017-2018 ||% Increase |
| || || ||(in lacs) ||(in lacs) || |
| || ||Employees salary ||0.84 ||7.25 ||-- |
| || ||Managerial salary ||NIL ||NIL ||NIL |
|6. ||Affirmation that the remuneration is as per the remuneration policy of the Company. ||It is affirmed that the remuneration is as per the remuneration policy of the Company. || || || |
(2) Particulars of employees drawing remuneration in excess of limits prescribed underSection 134(3)(q) read with Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 :
There are no employees drawing remuneration exceeding Rupees One Crore and Two Lakhsper annum if employed throughout the financial year or Rupees Eight Lakh Fifty Thousandper month if employed for part of the financial year or draws remuneration in excess ofManaging Director or Whole time Director or manager and holds by himself or along with hisspouse and dependent children not less than two percent of the equity shares of theCompany.
10. NUMBER OF MEETINGS OF BOARD DURING THE YEAR:
|Sr. No ||Particulars ||No. of meetings held |
|1. ||Board Meetings ||Five |
|2. ||Audit Committee Meetings ||Four |
|3. ||Independent Directors Meeting ||One |
11. FORMAL ANNUAL EVALUATION:
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an annual evaluation of its own performance and working of its Committees.The Board's functioning was evaluated on various aspects including inter alia degree offulfillment of key responsibilities its structure and composition establishment anddelegation of responsibilities to various Committees. Directors were evaluated on aspectssuch as attendance and contribution at Board/ Committee Meetings and guidance/ support tothe management of the Company. Areas on which the Committees of the Board were assessedincluded degree of fulfillment of key responsibilities adequacy of Committee compositionand effectiveness of meetings.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors. TheDirectors expressed their satisfaction with the evaluation process.
12. DECLARATION BY INDEPENDENT DIRECTORS:
Declarations by the Independent Directors that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 has been receivedby the Company.
13. REMUNERATION POLICY:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The remuneration policy is also uploaded on the website www.ashirwadcapital.in
At the Annual General Meeting held on September 28 2018 M/s. S. P. Jain &Associates Chartered Accountants (FRN 103969W) Mumbai were appointed as statutoryauditors of the Company to hold office till the conclusion of the Annual General Meetingto be held in the year 2023.
The report given by the auditors on the financial statement of the Company is a part ofthe Annual Report. There has been no qualification reservation adverse remarks ordisclaimer given by the auditors in their report.
15. SECRETARIAL AUDIT REPORT:
In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s.Sandeep Dar and Co. Practicing Company Secretaries have been appointed as SecretarialAuditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure 3to this report. The report is self-explanatory. However Company has initiated necessarysteps to comply with various non-compliances as per the provisions of various statutementioned under the Secretarial Audit Report.
16. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company atwww.ashirwadcapital.in
17. COMPOSITION OF AUDIT COMMITTEE:
Composition of Audit Committee as required under section 177(8) of the Companies Act2013.
The Composition of Audit Committee is as follows:
|1. ||Mr. Sanjiv Rungta ||- Chairman |
|2. ||Mr. Rajesh Poddar ||- Member |
|3. ||Mr. Rakesh Garodia ||- Member |
18. SIGNIFICANT MATERIAL CHANGES:
There were no material changes and commitments which adversely affects 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.
19. RISK MANAGEMENT:
The Company is periodically reviewing its risk perception taking into accounts overallbusiness environment affecting / threatening the existence of the Company. Presentlymanagement is of the opinion that such existence of risk is minimal.
20. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has in place adequate internal financial controls. During the year suchcontrols were tested and no reportable material weakness in the design or operation wasobserved and that such internal financial controls are adequate and operating effectively.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 of Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and it continues to be a Non-deposit taking Non Banking FinancialCompany.
22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:
The Company being a Company whose principal business is acquisition of shares andsecurities provisions of section 186 of the Companies Act 2013 are not applicable.
23. MANAGEMENT DISCUSSION AND ANALYSIS:
I. INDUSTRY STRUCTURE AND DEVELOPMENTS:
NBFC's have flexible structure than banks. Their flexible structure helps in broadeningthe market by providing the saver and investor a bundle of services on competitive basis.
We witness that NBFC sector in India are facing stiff competition from different banksand financial institutions. On the consumer side of the business the ability to competein various product offerings often is dictated by operational efficiencies and economiesof scale. However as the market is volatile in nature the long term growth of capitalmarket calls for a matter of concern
II. OPPORTUNITIES AND THREATS:
Your Company is exposed to external and internal risks associated with the business. Itis exposed to strong competitive pressures and financial risks from changes in interestrate economic cycles etc.
The independent finance industry issues debt and lends the proceeds to individuals andCorporations on both Secured and Unsecured basis. Consequently the ability to access theshort medium and long-term markets at competitive rates is critical to their ongoingviability. Your company faces tough competition from Nationalized Foreign and PrivateSector Banks due to their ability to grant loan at a considerably low rate of interest.
III. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:
The Company is a Non Banking Finance Company (NBFC). It is engaged in the business ofinvestment and lending which is the only segment in the Company. Hence the results forthe year under review pertain to only financing activity.
IV. RISK AND CONCERNS:
The Company has a strong Risk Management System for identification monitoringmitigation and reporting of the risks associated with its operations. The Company has anestablished practice of compliance reporting covering all operations and supportfunctions; compliance reporting is periodically reviewed to ensure comprehensive coverage.
Company would definitely try to establish itself and remain as a strong player in thefinance industry. With the Capital market expected to be in a better mode than theprevious few years and with our efforts we can look forward to a prosperous year for thecompany.
Our portfolio at Ashirwad "Ashirwad-200" remains strong focused and variedyet balanced and is well on its way to deliver a dynamic performance for the next fiveyears. We are excited to see how the macro model of the Indian economy benefits the microi.e. the results of the large cap Companies of India.
VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY.
The Process of internal control system plays a critical role in the health of theCompany. The Company has well defined documented policy guidelines and has an adequateinternal control system commensurate with its size and nature of business and suitableinternal control procedures that ensures efficiency of operations and safe guard of itsassets.
These procedures are designed to ensure :
That all assets and resources are used efficiently and are adequately protected;
That all internal policies and statutory guidelines are complied within letter& spirit;
The accuracy and timing of financial reports and management information.
VII. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT INCLUDINGNUMBER OF PEOPLE EMPLOYED:
Your Company has cordial relations with its employees. The Company commends thecommitment dedication and competence shown by its employees in all aspects of business.With the growing requirements of the Company Company has taken necessary initiatives toensure not only the retention of the employees but also their growth and development.
24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONAND REDRESSAL) ACT 2013:
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceunder the Act. The following is a summary of sexual harassment complaint received ordispose of during the year 2018-19.
| No. of Complaint received: ||NIL |
| No. of Complaint disposed off: ||NIL |
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
In view of the nature of activities of the Company conservation of energy andtechnology absorption respectively are not applicable to the Company.
There were no foreign exchange earnings or outgo during the year under review.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
No significant or material orders were passed by the regulators or courts or Tribunalswhich impact the going concern status and Company's' operations in future.
27. LISTING AGREEMENT WITH THE STOCK EXCHANGE:
The Company has entered into the Uniform Listing Agreement as per SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 and confirms that it has paidthe Annual Listing Fees for the year 2017-2018 to BSE Ltd. where the Company's Shares arelisted.
We record our gratitude to the Banks and others for their assistance and cooperationduring the year. We also wish to place on record our appreciation for the dedicatedservices of the employees of the Company. We are equally thankful to our esteemedinvestors for their co-operation extended to and confidence reposed in the management.
|Registered Office: ||By Order of the Board |
|303 Tantia Jogani Industrial Estate J. R . Boricha Marg Lower Parel Mumbai 400 011. ||For Ashirwad Capital Limited |
|Date: May 28 2019 ||Dinesh Poddar |
|Place: Mumbai ||Chairman and Managing Director |