And Management Discussion & Analysis
TO THE MEMBERS
The Directors have pleasure in presenting the 73rd Annual Report togetherwith the Audited Financial Statements of the Company for the year ended 31stMarch 2020.
SCHEME OF ARRANGEMENT AND SHARE CAPITAL
The Scheme of Arrangement between Florence Investech Limited BMF Investments LimitedJ.K. Fenner (India) Limited and the Company and their respective Shareholders sanctionedby the Hon'ble Benches of National Company Law Tribunal Kolkata and Chennai has becomeeffective on 24th May 2019 operative from the Appointed date i.e. 1stApril 2017. Pursuant to the aforesaid Scheme 3259586 equity shares of r 10/- eachissued and allotted to the Members of erstwhile Florence Investech Limited and J.K. Fenner(India) Limited were listed and traded on BSE Ltd. w.e.f. 6th September 2019.
Further during the year 6500000 Cumulative Redeemable Preference Shares of r 100/-each were issued and allotted to JK Enviro Tech Limited. Accordingly the paid up sharecapital of the Company has been increased from r 8.68 Crores to r 76.30 Crores.
CORE INVESTMENT COMPANY
The Company is a Core Investment Company-Non Deposit Taking-Systemically Important(CIC-ND-SI) registered with the Reserve Bank of India (RBI) and has been complying withall the conditions prescribed by RBI.
OPERATIONS & OUTLOOK
Indian economy faced considerable challenges commencing from the later part of the lastfiscal which continued through-out the year.
Despite all the challenges the Company recorded Profit after Tax of r 12535.53 lacsfor the year as compared to r 3892.59 lacs in the previous year. The Company being a CoreInvestment Company holds significant investments in the Group Companies which are engagedin diversified industrial segments.
With the ongoing COVID-19 there is a severe contraction of economic activities in thecurrent year. However Capital Market after recording a steep downturn is now showing ahealthy growth which augurs well for the Company.
The Directors have recommended the interim dividend of r 15/- per share (150%) paid bythe Company during the financial year ended 31st March 2020 as final dividendfor the financial year 2019-20.
The amount available for appropriation including surplus from previous year is r27025.75 lacs.
The Directors propose this to be appropriated as under:
|Transfer to Reserves (As per RBI guidelines) ||2507.11 Lacs |
|Transfer to Capital Redemption Reserve ||2500.00 Lacs |
|Surplus carried to Balance Sheet ||22018.64 Lacs |
|Total ||27025.75 Lacs |
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2020 in the prescribedform MGT-9 is attached as Annexure-1 to this Report and forms part of it. The said extractis also available on the website of the Company at www.bengalassam.com.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company being a Core Investment Company registered with the Reserve Bank of IndiaSection 186 of the Companies Act 2013 is not applicable to it. The particulars of loansguarantees and investments are given in
the financial statements.
RELATED PARTY TRANSACTIONS
During the financial year ended 31st March 2020 all the contracts orarrangements or transactions entered into by the Company with the Related Parties were inthe ordinary course of business and on arms' length basis and were in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Further the Company has not entered into any contract or arrangement or transactionwith the related parties which could be considered material in accordance with the policyof the Company on materiality of the Related Party Transactions. In view of the abovedisclosure in Form AOC-2 is not applicable.
The Related Party Transactions Policy as approved by the Board is available on thewebsite of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr. Raghupati Singhania Director retires by rotation and being eligible offershimself for re-appointment at the ensuing AGM.
Smt. Deepa Gopalan Wadhwa was appointed as an Additional Director of the Company in thecategory of Independent Woman Director with effect from 28th March 2020 for aterm of three consecutive years subject to approval of the Members at the ensuing AGM.Smt. Wadhwa has given declaration about her independence pursuant to Section 149 of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Company has also received requisite Notice from a Member of theCompany proposing the name of Smt. Deepa Gopalan Wadhwa for appointment as Director at theensuing AGM. The Board of Directors recommends her appointment as aforesaid.
Shri Bakul Jain Independent Director was re-appointed for the second term of 5consecutive years w.e.f. 15th May 2020 subject to approval of the Members atthe ensuing AGM. Requisite Resolution regarding his re-appointment is included in theNotice of ensuing Annual General Meeting for approval by the Members.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the Company in accordancewith the applicable Accounting Standards. The Audited Consolidated Financial Statementstogether with Auditors' Report form part of the Annual Report.
A report on the performance and financial position of each of the subsidiaries andassociates included in the Consolidated Financial Statements is presented in a separatesection in this Annual Report. Please refer AOC-1 annexed to the Financial Statements inthe Annual Report.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company Consolidated Financial Statements alongwith relevant documentsand separate audited accounts in respect of subsidiaries are available on the website ofthe Company.
During the financial year under review Global Strategic Technologies Ltd. J.K. RiskManagers & Insurance Brokers Ltd. CliniRx Research Pvt. Ltd. CliniRx Asia PacificLtd. CliniRx UK Ltd. CliniRx USA Inc. and Deepti Electronics & Electro-Optics Pvt.Ltd. ceased to be subsidiaries of the Company and J.K. Risk Managers & InsuranceBrokers Ltd. Deepti Electronics & Electro-Optics Pvt. Ltd. Global StrategicTechnologies Ltd. and CliniRx Research Pvt. Ltd. have become Associates of the Company.The Company does not have any Joint Venture.
The Company is a registered Non-Banking Finance Company and does not accept publicdeposits and as required by the Reserve Bank of India (RBI) the Board of Directors havealso passed necessary resolution not to accept public deposits during the financial year2020-21 without prior approval of RBI.
(a) Statutory Auditors and their Report
M/s. Singhi & Co. Chartered Accountants were appointed as the Statutory Auditorsof the Company for a period of 3 years commencing from the conclusion of 72ndAnnual General Meeting till the conclusion of 75th Annual General Meeting. Theobservations of the Auditors in their report on Accounts and the Financial Statementsread with the relevant notes are self explanatory.
(b) Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors appointed Shri Namo Narain Agarwal Company Secretary in Practice as SecretarialAuditor to carry out Secretarial Audit of the
Company for the financial year 2019-20. The Report given by him for the said financialyear in the prescribed format is annexed to this Report as Annexure 2. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review there were no significant and material orderspassed by the Regulators or Courts or Tribunals which would impact the going concernstatus of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company.
CHANGE IN THE NATURE OF BUSINESS
During the financial year under review there was no change in the nature of business.
PARTICULARS OF REMUNERATION
Disclosure of the ratio of the remuneration of each Director to the median employee'sremuneration and other requisite details pursuant to Section 197(12) of the Companies Act2013 ("Act") read with Rule 5 (1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended is annexed to this Report as Annexure-3.
Further particulars of Employees pursuant to Rule 5(2) & (3) of the above Rulesforms part of this Report. However as per the provisions of Section 136 of the said Actthe Report and Accounts are being sent to all the
Members of the Company and others entitled thereto excluding the aforesaidinformation. Any Member interested in obtaining such particulars may write to the CompanySecretary at the Registered Office of the Company. The said information is available forinspection at the Registered Office of the Company during working hours.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements and no material reportable weakness was observed in the system.Further the Company has in place adequate internal financial controls commensurate withthe size and nature of its operations. The Company also has robust Budgetary ControlSystem and Management Information System (MIS) which is the backbone of the Company forensuring that your Company's assets and interests are safeguarded.
Maintenance of cost records as specified by the Central Government under sub-section(1) of Section 148 of the Companies Act 2013 is not applicable to the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act 2013 your Directors statethat:-
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
(b) the accounting policies have been selected and applied consistently and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the said Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the Company have been laid downand that such internal financial controls are adequate and were operating effectively; and
(f) the proper systems to ensure compliance with the provisions of all applicable lawshave been devised and that such systems were adequate and operating effectively.
SUSTAINABILITY & BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Company's First Sustainability & BusinessResponsibility Report for the Financial Year ended 31st March 2020 is givenin a separate section of the Annual Report and forms part of it.
CORPORATE GOVERNANCE - including details pertaining to Board Meetings Nomination andRemuneration Policy Performance Evaluation Risk Management Audit Committee and VigilMechanism
The Company re-affirms its commitment to the highest standards of corporate governancepractices. Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a Management Discussion and Analysis Corporate Governance Report and Auditors'Certificate regarding compliance of conditions of Corporate Governance are made a part ofthis Report.
The Corporate Governance Report which forms part of this Report also covers thefollowing:
(a) Particulars of the five Board Meetings held during the financial year under review.
(b) Policy on Nomination and Remuneration of Directors Key Managerial Personnel andSenior Management including inter alia the criteria for performance evaluation ofDirectors.
(c) The manner in which formal annual evaluation has been made by the Board of its ownperformance and that of its Committees and individual Directors.
(d) The details with respect to composition of Audit Committee and establishment ofVigil Mechanism.
(e) Details regarding Risk Management.
RISK AND CONCERNS
The Company is mainly exposed to capital market risks in the form of change in value ofits investments. The Company is also exposed to the fluctuations of economy and industrycycles.
The statement in this Management Discussion and Analysis Report describing theCompany's outlook projections estimates expectations may be "Forward-lookingStatements" within the meaning of applicable securities laws or regulations. Actualresults could differ materially from those expressed or implied.
CORPORATE SOCIAL RESPONSIBILITY
The requirement of Corporate Social Responsibility (CSR) in terms of Section 135 of theCompanies Act 2013 and the rules made thereunder is not applicable to the Company sincethe Company's main source of income is dividend from CSR compliant companies.
During the financial year under review the Company has complied with the applicableSecretarial Standards for Board and General Meetings issued by the Institute of CompanySecretaries of India.
CONSERVATION OF ENERGY ETC.
As required under Section 134(3)(m) read with the Companies (Accounts) Rules 2014 therequirement of furnishing particulars of energy conservation technology absorption etc.is not applicable to the Company. Further particulars of Foreign Exchange Earning andOutgo are as under:-
|i) Foreign Exchange earned ||NIL |
|ii) Foreign Exchange Outgo ||121.99 Lacs |
The Directors wish to place on record and acknowledge their appreciation for thecontinued support and co-operation received from the various Government AuthoritiesLending Institutions and the esteemed shareholders of the Company. The Directors alsorecord their appreciation for the total dedication of the employees.
| ||On behalf of the Board |
| ||Bharat Hari Singhania |
|New Delhi ||Chairman |
|Date: 24th June 2020 ||DIN:00041156 |