The Board of Directors hereby submit the report of the business and operations of theCompany (the Company or Choice International Limited) along withAudited Financial statements for the Financial year ended March 31 2018. TheConsolidated Performance of the Company and its subsidiaries has been referred to whereverrequired.
The Company " Choice International Limited"as on the year ended March 312018 and as on the date of the report is holding the status of a Non - Banking FinancialCompany Registered with the Reserve Bank of India holding a valid certi cate ofRegistration. However on availing the NBFC Registration in the name of M/s. Choice FinservPrivate Limited the wholly owned subsidiary company the Company " ChoiceInternational Limited" pursuant to the Postal Ballot has sought the consent of theMember for resuming its NBFC activities in the name of its wholly owned subsidiary M/s. Choice Finserv Private Limited & surrender the NBFC License held in thename of the Company M/s. Choice International Limited vide postal ballotnotice dated February 12 2018 . On securing the requisite consent from the members theCompany is in the process of surrendering its NBFC Registration held in the name of theCompany. On surrender of its NBFC License the Company shall stand as sheer Listed HoldingCompany.
On Surrender of the NBFC License the Company stands as a Holding Company to its 11Wholly Owned Subsidiaries the details of which are incorporated in the Report. OnConsolidated basis the group Choice is a Conglomerate providing a range of Financialservices under one ridge. Choice group in itself is a complete raft for one'sFinancial need a one stop solution catering to all your Financial need.
|Particulars ||Standalone || |
| ||Year ended 31.03.18 ||Year ended 31.03.17 ||Year ended 31.03.18 ||Year ended 31.03.17 |
|Revenue from Operations ||2264.03 ||1962.60 ||14292.82 ||13039.46 |
|Other Income ||18.44 ||134.13 ||895.17 ||465.92 |
|Total Income ||2282.47 ||2096.73 ||15187.99 ||13505.38 |
|Less Expenses: || || || || |
|a) Purchases ||- ||486.81 ||3083.06 ||1796.32 |
|b) Change in Inventories ||16.66 ||(3.34) ||(833.85) ||(148.69) |
|c)Operating Expenses ||- ||- ||2977.28 ||4529.90 |
|d)Employee benefit Expenses ||300.19 ||310.91 ||4015.99 ||2763.91 |
|e)Finance Cost ||988.59 ||422.25 ||2056.07 ||1907.12 |
|f) Depreciation & Amortisation expense ||78.28 ||92.51 ||277.03 ||222.85 |
|g) Other Expenses ||597.87 ||441.32 ||2036.65 ||1406.27 |
|Total Expenses ||1981.59 ||1750.46 ||13612.23 ||12477.68 |
|Profit before Tax & Exceptional Items ||300.88 ||346.27 ||1575.76 ||1027.70 |
|Net Profit before Tax ||300.88 ||346.27 ||1575.76 ||1027.70 |
|Net Profit After Tax ||230.13 ||258.78 ||1203.38 ||601.97 |
|Share of Profit from Associates ||- ||- ||21.01 ||27.04 |
|Net Profit after taxes and share of profit from associates ||- ||- ||1224.39 ||629.01 |
|Paid Up Equity Share Capital ||2000.48 ||1000.48 ||2000.48 ||1000.48 |
|Reserves excluding Revaluation Reserves ||7539.36 ||4309.23 ||10447.70 ||5977.18 |
|Earing Per Share || || || || |
|Basic ||1.25 ||2.59 ||6.54 ||6.02 |
|Diluted ||1.15 ||1.30 ||6.02 ||3.03 |
COMPANY'S PERFORMANCE REVIEW:
Your Company reported growth in revenue from operations on a consolidated level by12.46% during the nancial year 2017- 18. The Profit after Tax for the Current Year is Rs.1224.39 Lakh against Rs. 629.01 Lakh in the Previous Year.
Your Director's do not recommend any Dividend for the Year ended March 31 2018 inorder to conserve the Resources of your Company.
EQUITY SHARE CAPITAL
The Company had issued one Crore Warrants to be converted in to Equity Shares onPreferential basis to the Promoters of the Company pursuant to the approval of the Membersof the Company by means of conducting an Extra Ordinary General Meeting held on March 152016. On obtaining the approval of the Members of the Company vide passing a Resolutiondated March 15 2016 & on obtaining the In Principal approval from BSELimited the Exchange the Company had issued One Crore warrants on Preferentialbasis to the Promoters of the Company on April 08 2016.
On receipt of the entire consideration amount along with a request to convert thewarrant in to Equity Shares from the warrant holder the Company had approved theConversion of Warrants in to equivalent number of Equity Shares of the Company on May 302017. On Conversion of One Crore warrants in to Equity Shares of the Company the Paid upShare Capital of the increased from Rs. 100048000/- ( Rupees Ten Crores Forty EightThousand Only) to Rs. 200048000/- ( Rupees Twenty Crore Forty Eight Thousand Only) witheffect from May 30 2017. On conversion of the One Crore warrants in to Equity sharesthere are no warrants to be converted in to Equity Shares subsisting in the Company.
The one Crore warrants converted in to Equity Shares were Listed on BSELimited the exchange on July 03 2017 & were traded on the exchange with effectfrom July 18 2017.
On allotment of One Crore Equity shares on conversion of warrants the promoters' stakein the Company was increased from 46.84 % to 73.42 % with effect from May 30 2017. Onincrease in the Promoter's stake by more than 5 % in a nancial year the Promoters of theCompany had given an open offer during the year in Compliance with Regulation 3(2) andother applicable provisions of SEBI (SAST) Regulations.
The said open offer given by the Promoter of the Company was without change in control& Management of the Company.
During the year the Company had redeemed 25 Secured Redeemable Unrated UnlistedMarket Linked Non Convertible Debentures. As on March 31 2018 there are 310 SecuredRedeemable Unrated Unlisted Market Linked Non Convertible Debentures.
Your Company being an RBI Registered Non Deposit taking Non -Banking Financial Companyas on March 31 2018 the Company has not accepted any deposit from the public during theyear under review.
PROVISIONS OF FINANCIAL ACCOUNTS
As mandated by Ministry of Corporate Affairs the Financial statements for the yearended on March 31 2018 has been prepared in accordance with Provisions of the Sec 133 ofthe Companies Act 2013 read with the Companies ( Accounts) Rules 2014. The estimates andjudgements relating to the Financial Statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Company's state of affairs profits and cash flow for the year ended March 312018.
CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the Securities and Exchange Board of India ( ListingObligations & Disclosure Requirements ) Regulations 2015 ( herein after referred toas Listing Regulation ) and applicable provisions of the Companies Act 2013read with rules issued thereunder the Consolidated Financial Statements of the Companyfor the Financial Year 2017 18 have been prepared in Compliance with applicable AccountingStandards and on the basis of Audited Financial statements of the Company itssubsidiaries and associate companies as approved by the respective Board of Directors.
The Consolidated Financial statements together with the Auditor's Report form part ofthis Annual Report.
SUBSIDIARIES & ASSOCIATE COMPANIES
A separate statement containing the salient features of the Financial statements of allsubsidiaries of the Company in the prescribed Form AOC -1 forms a part of consolidatednancial statements in compliance with section 129(3) and other applicable provisions ifany of the Companies Act 2013 read with Rule 5 of the Companies( Accounts) Rules 2014.The said Form also highlights the Financial performance of each of the subsidiaries andjoint ventures Companies included in the consolidated nancial statements of the Companypursuant to Rule 8(1) of the Companies ( Accounts) Rules 2014.
In accordance with section 136 of the Companies Act 2013 the nancial statements ofthe subsidiary and associate companies are available for inspection by the members at theRegistered Office of the Company during business hours on all days except Saturdays Sundays and Public Holidays up to the date of the Annual General Meeting AGM.Any member desirous of obtaining a copy of the said nancial statements may write to theCompany Secretary at the Registered Office of the Company. The Financial Statementsincluding the consolidated nancial statements and all other documents required to beattached to this report have been uploaded on the website of the Companywww.choiceindia.com . The Company has formulated a policy determining materialsubsidiaries. The Policy is available on the Website of the Company www.choiceindia.com.During the Year under review:
LIST OF SUBSIDIARIES & ASSOCIATES AS ON MARCH 31 2018
|Sr. No ||Company Name ||Subsidiary/ Associate/ Joint Venture ||Business Activity |
|1 ||Choice Equity Broking Private Limited ||Wholly Owned Subsidiary ||Equity Broking Currency Broking & Depository Services |
|2 ||Choice Merchandise Broking Private Limited ||Wholly Owned Subsidiary ||Commodity Broking |
|3 ||Choice Consultancy Services Private Limited ||Wholly Owned Subsidiary ||Business Advisory & Consultancy |
|4 ||Choice Capital Advisors Private Limited ||Wholly Owned Subsidiary ||Merchant Banking & Advisory Services |
|5 ||Choice Corporate Services Private Limited ||Wholly Owned Subsidiary ||Providing Retail Loan |
|6 ||Choice Wealth Management Private Limited ||Wholly Owned Subsidiary ||Mutual Fund Distribution |
|7 ||Choice Portfolio Management Services Private Limited ||Wholly Owned Subsidiary ||Portfolio Management Services |
|8 ||Choice Finserv Private Limited ||Wholly Owned Subsidiary ||Non-Banking Financial Company involved in Lending activity |
|9 ||Choice Peers International Private Limited ||Wholly Owned Subsidiary ||Cross Border Consultancy |
|10 ||Choice Tech Lab Solutions Private Limited ||Wholly Owned Subsidiary ||IT Solutions |
|11 ||Choice Retail Solutions Private Limited ||Wholly Owned Subsidiary ||Providing Financial Services through Retail Outlets |
|12 ||Aqua Pumps Infra Ventures Limited ||Associate Company ||Infrastructure Consultancy |
|13 ||Thoughts Consultants Jaipur PL in JV with Choice Consultancy Services PL ||JV of Wholly Owned Subsidiary ||- |
The Company M/s. Choice Portfolio Management Services Private Limited hadapplied for Registration as a SEBI Registered Portfolio Managers to conductthe Portfolio Management activities on September 28 2017 the Company had secured thecerti cation as an SEBI registered Portfolio Manager. The group is keen onproviding the best Portfolio Management services for generating wealth for its Clients.
The group to expand it its Business as an Non -Banking Financial Company orNBFC had applied for Registration as an NBFC in the name of M/s. ChoiceFinserv Private Limited. On January 12 2018 the company had secured the License asa Non Deposit taking NBFC Company engaged in lending activities in the name of M/s.Choice Finserv Private Limited. However the licensed granted by the Reserve Bank ofIndia was on a condition that the Holding Company M/s. Choice InternationalLimited also being an NBFC Company shall surrender its License as an NBFC Companywithin six Months from the grant of Registration as an NBFC to its wholly owned subsidiaryM/s. Choice Finserv Private Limited. To execute the same M/s. Choice International Limitedthe holding Company had sought approval from the Shareholders of the Company Vide PostalBallot Notice dated February 12 2018. The resolution for Closure of NBFC Business of M/s.Choice International Limited & Surrender of NBFC License & resuming the NBFCBusiness through its wholly owned subsidiary M/s. Choice Finserv Private Limited waspassed with requisite majority with effect from March 30 2018.
The Company is in the process of resuming its NBFC Business through its wholly ownedSubsidiary M/s. Choice Finserv Private Limited.
On surrender of NBFC License the Company Choice International Limitedshall stand only as an Holding Company to all its Subsidiaries.
DIRECTORS & KEY MANAGERIAL PERSONS
Appointment of Independent Director:
During the year under review Mr. Bharat Kumar Shah (DIN No : 07393863) was appointed asthe Additional Director of the Company with effect from April 29 2017 in the capacity ofIndependent Director. However his appointment as an Independent Director of the Companywas approved by the Members at the 24th Annual General Meeting of the Company held onSeptember 18 2017.
Retirement by Rotation & Subsequent Re- appointment
In accordance with the provisions of Section 152 and other applicable provisions of theCompanies Act 2013 read with the Companies ( Appointment and Qualification of Directors)Rules 2014 (including any statutory modi cation(s) or re- enactment(s) thereof for thetime being in force) and the Articles of Association of the Company Mrs. Hemlata Poddar the Non- Executive Director ( DIN No : 02931322)liable to retire by rotation at theensuing Annual General Meeting and being eligible have offered herself for re-appointment.
Appropriate resolution for her re- appointment is being placed for the approval of theMembers of the Company at the ensuing Annual General Meeting. The brief resume of Mrs.Hemlata Poddar and other related information has been detailed in the Notice convening the25th Annual General Meeting of the Company. Your Directors recommend the appointment ofMrs. Hemlata Poddar as the Non -Executive Director of the Company.
In accordance with the provisions of the Companies Act 2013 read with rules issuedthereunder the Listing Regulations and the Articles of Association of the Company theIndependent Director and the Managing Director of the Company are not liable to retire byrotation.
Resignation of Directors between the end of the Financial Year and date of the Report
Mr. Lalit Menghnani (DIN: 06614582) & Mr. Raghuvir Shrivastava ( DIN No: 01199531)the Independent Directors of the Company has resigned from the Directorship of the Companywith effect from May 25 2018 & May 30 2018 respectively.
List of Directors of the Company as on the Date of the Report
|CATEGORY ||NAME OF DIRECTOR |
|Executive Director ( Managing Director) ||Mr. Kamal Poddar |
|Executive Director ||Mr. Ajay Kejriwal |
|Non Executive Director ||Mrs. Hemlata Poddar |
|Non- Executive Independent Director ||Mr. Debkumar Goswami |
|Non- Executive Independent Director ||Mr. Ashok Kumar Thakur |
|Non- Executive Independent Director ||Mr. Kanhaiyalal Berwal |
|Non- Executive Independent Director ||Mr.L.N. Nathuramka |
|Non- Executive Independent Director ||Mr. Bharat Kumar Shah |
Number of Meetings of the Board & its Committees
The details of the number of meetings of the Board of Directors & its Committeesheld during the Financial Year 2017 18 forms part of the Corporate Governance Report. TheCompany has complied with the applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India.
Committees of the Board
The Board of Directors has the following Committees: i) Audit Committee ii) Nomination& Remuneration Committee iii) Stakeholder's Relationship Committee iv) CorporateSocial Responsibility Committee
The details of the above mentioned committees along with their composition number ofmeeting held and attendance at the meetings are provided in the Corporate GovernanceReport.
For the lucid & competent working the Company had constituted various InternalCommittee consisting of the Executive Independent Director of the Companies along withthe involvement of the Senior Level Management in the committees for the smooth operationsof the Company the details of committees constituted by the Company are as follows:
i) Finance Committee ii) Investment Committee iii) Securities Allotment Committee
The meetings of the above mentioned Committees are held at Regular Intervals for thesmooth operations of the Company and decisions undertaken are by the set of collectivepeople on the Consent of the majority of the members of the committee. The pronouncementsof the committees are veri ed by the Board in their subsequent Meetings.
Declaration of Independence
The Company has received declarations from all the Independent Directors con rming thatthey meet the criteria of independence as prescribed under the provisions of the CompaniesAct 2013 read with the schedules and rules issued thereunder as well as Regulations 16 ofthe Listing Regulations (including any statutory modi cation(s) or re- enactment(s)thereof for time being in force.
Key Managerial Personnel
The following are the Key Managerial Personnel of the Company :
1) Mr. Kamal Poddar: Managing Director 2) Mr. Ajay Kejriwal : Executive Director 3) Mr.Manoj Singhania: Chief Financial Officeer 4) Ms. Karishma Shah: Company Secretary
MATERIAL CANGES AND COMMITMENTS AFFECTING THE FINACIAL POSITION OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND TO THE DATE OF THIS REPORT
1) Your Company had incorporated a Wholly owned Subsidiary in the name of M/s. ChoiceFinserv Private Limited to expands its NBFC Activities. On 12th of January 2018 theCompany M/s. Choice Finserv Private Limited had secured an NBFC License asgranted by the Reserve Bank of India as a Non Deposit taking NBFC engaged primarily inlending activities. Your Company had sought approval from the Shareholders of the CompanyVide Postal Ballot Notice dated February 12 2018 seeking approval of the Members forClosure of NBFC Business of M/s. Choice International Limited the holding Company &surrender of NBFC License & resuming the NBFC activity through its wholly ownedsubsidiary M/s. Choice Finserv Private Limited.
On the approval of requisite majority of the Members of the Company your Company is inthe process of surrendering the NBFC License held in the name of M/s. Choice InternationalLimited.
Post the surrender of NBFC License your Company stands as an Listed holding Company toall its Subsidiaries.
2) M/s. Choice Equity Broking Private Limited our wholly owned Subsidiary engagedprimarily in the business of Equity Broking has entered in to the Agreement with M/sInditrade Capital Limited for acquisition of their Broking business subject to necessarystatutory clearances.
M/s. Inditrade Capital Limited an Indian Public Listed Company incorporated in theyear 1994 is a leading player in agri - Commodity financing business and a well-knownnancial service provider focusing on Micro Finance having its registered office inKerala. The acquisition of Broking Business of M/s. Inditrade Capital Limited brings overits 1.2 lakh client base into M/s.Choice Equity Broking Private Limited & additionallybrings in its robust network of 27 branches and 440 Franchises & Business Associatesalong with 313 employees.
The transaction of acquisition of Broking Business not being a related partytransaction has been executed by entering in to a Business Transfer agreement with M/s.Inditrade Capital Limited on May 18 2018 for a consideration of INR 320 Million.
3) In reference to the SEBI Circular No. SEBI / HO / MIRSD / MIRSD1 / CIR/P / 2017 /104 and to contract the benefit of operational synergies your Company is in the process ofMerging to of its wholly owned Subsidiaries namely M/s. Choice Merchandise Broking PrivateLimited to be referred to as the Transferor Company with M/s. ChoiceEquity Broking Private Limited to be referred to as the Transferee Company engagedprimarily in Commodity & Equity Broking respectively. Both the applicant companies hasled the Petition of Merger / Amalgamation with the National Company Law Tribunal on June04 2018 and is in awaiting the order for the same.
REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The Remuneration Paid to Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Listing Regulations (including any Statutory Modi cation(s) orre- enactments thereof for time being in force).
The information required under section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modi cation(s) or re- enactments thereof for time being in force forms apart of this Annual Report. However this information is not set along with this report asper the provisions of section 136 of the Act. Members interested in obtaining theseparticulars may request to the Company Secretary at the Registered Office of the Company.
Policy on Performance Evaluation and Remuneration of the Directors
All the Members of the Board of Directors.
To provide Directors an opportunity to reflect on and assess their areas of Strength& Development.
To monitor and evaluate the accomplishment of the Board of Directors.
Key Evaluation Criteria
Attendance and contribution at Board and Committee meetings
His/her stature appropriate mix of expertise skills bahaviour experienceleadership qualities
Sense of sobriety and understanding of business strategic direction to align company'svalue and standards.
His/her knowledge of nance accounts legal investment marketing foreign exchange/hedging internal controls risk management assessment and mitigation businessoperations processes and Corporate Governance.
His/her ability to create a performance culture that drives value creation and a highquality of debate with robust and probing discussions.
Effective decisions making ability to respond positively and constructively toimplement the same to encourage more transparency.
Open channels of communication with executive management and other colleague on Boardto maintain high standards of integrity and probity.
Recognize the role which he/she is expected to play internal Board Relationships tomake decisions objectively and collectively in the best interest of the Company to achieveorganizational successes and harmonizing the Board.
His/her global presence rational physical and metal tness broader thinking visionon corporate social responsibility etc.
Quality of decision making & understanding nancial statements and businessperformance raising of nance best source of nance working capital requirement forexdealings geopolitics human resources etc.
His/her ability to monitor the performance of management and satisfy himself withintegrity of the nancial controls and systems in place by ensuring right level of contactwith external stakeholders.
His/her contribution to enhance overall brand image of the Company.
Evaluation Process of Independent Directors
Choice International Limited believes in value for its stakeholders through ethicalprocesses and integrity. The Board plays a very important role in ensuring the Company'sperformance to monitor and provide timely inputs to enhance the Company's performance andset the right direction for growth. Hence it is important that every individual BoardMember effectively contributes in the Board deliberations.
At Choice we follow annual evaluation for our Key Managerial Persons andother eligible employees including the senior management team. A process sculpted on thismethod has been designed for evaluation of Directors under this process the Companymanagement team will:
Formulate the process for evaluating and rating Directors
Design the evaluation templates / questionnaire and implementation process
Peer Review of each Director
Analyse feedback received from each Director
Weighing the evaluation summary of each Director
Criteria for determining Remuneration of Directors
In pursuance of the Company's Policy to consider Human Resources as its invaluableassets to pay equitable remuneration to all Directors to harmonize the aspirations ofhuman resources consistent with the goals of the company and in terms of the provisions ofthe Companies Act 2013 and the Listing Regulations with the Stock Exchange(as amendedfrom time to time) the policy on nomination and remuneration of Directors Key Managerial(KMP) and Senior Management has been formulated by the Nomination and RemunerationCommittee and approved by the Board of Directors of the Company.
The Non Executive Independent Director(s) will receive remuneration by way of sittingfees for attending meetings of the Board and / or committee thereof as decided by theBoard from time to time subject to the limits specified under the Companies Act 2013 (herein referred to as The Act) including any amendments thereto.
The remuneration of Non executive Director will be governed by the role assumed number of meetings of the Board and the Committee thereof attended by the Directors theposition held by them as the Chairman and the contribution to the Business. Thedetermination of remuneration shall also be depended on the external competitiveenvironment track record individual performance of the directors and performance of theCompany as well as the industry standards.
The Compensation structure for Executive Director(s) consists of two parts Fixed andVariable.
The xed component comprises of salary allowances perquisites and variable componentcomprises of performance bonus and may include commission subject to the approval of themembers. The remuneration to the executive Director's are reviewed annually.
The Compensation structure of the Executive Director(s) is also reviewed by theNomination and Remuneration Committee and also approved by the Shareholders of theCompany.
The xed and variable compensation of Executive Director(s) is determined on the basisof Individual Performance and Performance of the Company.
RELATED PARTY TRANSACTION
All contracts / arrangements / transactions entered by the Company with related partieswere in ordinary course of business and at arm's length basis.
During the year under review the Company has not entered in to any contracts/arrangements/ transactions with related parties which qualify as material in accordancewith the policy of the Company on materiality of related party transactions.
All transactions with related parties were reviewed and approved by the Audit Committeeand are in accordance with the policy on Related Party Transactions formulated by theCompany.
There are no materially significant related party transactions that may have potentialconflict with interest of the Company at large.
The details of the related party transactions are set out in notes to FinancialStatements. Form AOC - 2 pursuant to section 134(3)(h) of the Companies Act 2013 readwith Rule 8 (2) of the Companies ( Account ) Rules 2014 is set out in the Annexure tothis report & also forms the part of the nancial
PARTICULARS OF LOANS GAURANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments under the provisions of
Section 186 of the Companies Act 2013 read with Companies ( Meetings of Board and itsPowers) Rules 2014 as on March 31 2018 are set out in the Financial Statements of theCompany.
NUMBER OF MEETINGS OF THE BOARD
Five Meetings of the Board of Directors were held during the Financial Year. Thedetails of the meetings of the Board of Directors of the Company convened during theFinancial Year 2017 18 are given in the Corporate Governance Report which forms part ofthis Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis report on the operations of the Company asrequired under the SEBI ( Listing Obligations and Disclosure Requirements) Regulations2015 is provided in a separate section and forms an Integral part of this report.
As per Regulation 34(3) read with schedule V of the SEBI ( Listing Obligations andDisclosure Requirements) Regulations 2015 a separate report on Corporate Governancepractises followed by the Company together with a certi cate from the Company's Auditorcon rming compliance forms an integral part of this report.
EXTRACTS OF ANNUAL RETURN
The details forming Part of the extracts of the Annual Return in form MGT 9 asrequired under Section 92 of the Companies Act 2013 is annexed as Annexure A and forms anintegral part of this Report.
POLICIES OF THE COMPANY
In light of Good Corporate Governance practises and to adhere to persistent efforts tocreate a value for our stake holders & to set a benchmark of thorough professionalismyour company has adopted key policies for the lucid operations of the Company the detailsof policies adopted by the Company are as follows:
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an effective internal control and risk mitigation system which isconstantly assessed and strengthen with standard operating procedures. Internal Financialcontrol systems of the Company have been designed to provide reasonable assurances withregards recording and providing reliable nancial and operating information complying withapplicable Accounting Standards.
The Company's Internal Control system is appropriate with its size scale &complexities of its operations. The main plunge of internal audit is to test and reviewcontrols appraisal of risks and business processes besides benchmarking controls withbest practises in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. There are adequate polices authorization matrices governing nancial transactionsand approvals.
The Company periodically conducts physical veri cations of inventory xed assets andCash on hand and matches them with the books of account. Explanations are sought for anyvariances noticed from the respective functional heads. For each major element in thenancial statements the inherent reporting risks have been identified by the Company.Controls have been put to mitigate these risks. These risks and the mitigation controlsare revisited periodically.
The Audit Committee of the Board of Directors statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actiontaken. Audit plays a key role in providing assurance to the Board of Directors. Signi cantaudit observations and corrective actions taken by the management are presented to theAudit Committee of the Board.
The Company has well defined process in place to ensure appropriate identi cation andtreatment of risks. The identi cation of risks is done at strategic business operational and process levels. While the mitigation plan and actions for risks belongingto strategic business and key critical operational risks are driven by senior leadership for the rest of the risk operating managers drive the conception and subsequentauctioning of mitigation plans.
The Key strategic business and operational risks which are significant in terms oftheir impacts to the overall objectives of the Company along with status of the mitigationplans are periodically presented and discussed. All significant risks are well integratedwith functional and business plans and are reviewed on a regular basis by the seniorLeadership.
The Company through its risk Management process aims to contain risks within its riskappetite. There are no risk which in the opinion of the Board threaten the existence ofthe Company. However some of the risks which are set out in the Management Discussion andAnalysis which forms part of this Annual Report.
VIGIL MECHANISM/ WHISTEL BLOWER POLICY
The Company has established a Vigil Mechanism to provide suitable boulevards to theEmployees to bring to the Management their sincere concerns about the unethical behaviourobserved in the organisation. The Whistle Blower Policy approved and adopted by theCompany is in Compliance with the provisions of Section 177(10) of the Companies Act 2013and Regulation 22 of the Listing Regulations. The whistle blower policy adopted by theCompany has been posted on the Website of the Company viz www.choiceindia.com .
During the year under review there are no complaints/ reporting's received to yourcompany in the said mechanism for the Company and for its Subsidiaries.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORK PLCAE
The Company's policy on Prevention of Sexual Harassment at work place is in line withthe requirement of Sexual Harassment of women at work place ( Prevention Prohibition andRedressal ) Act 2013 ( Prevention of Sexual Harassment of Women at Work Place Act) andRules framed thereunder. Internal Complaints Committees have also been set up to redresscomplaints received regarding sexual harassment.
During the nancial year 2017- 18 no cases in the nature of sexual harassment werereported at any workplace of the company or any of its subsidiaries.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the Financial Year 2017- 18 there were no significant and material orderspassed by the Regulators or courts or tribunals impacting the going concern status and theCompany's operations in future.
CORPORATE SOCIAL RESPNSIBILITY
The practice of CSR or Corporate Social Responsibility as a paradigm for rms andbusinesses to follow has evolved from its early days as a slogan that was consideredtrendy by some rms following it to the present day realities of the 21st century where itis no longer just fashionable but a business requirement to be socially responsible.
Corporate social responsibility (CSR) also known as corporate citizenship corporatephilanthropy has become increasingly important because today's heightened interest in theproper role of business in society has been promoted by increased sensitivity to andawareness of environmental and ethical issues. CSR is a culture and unwritten contractwith the community. This invisible culture can shape brighter future for nations.
Your Company voluntarily has adopted CSR Policy to shoulder its responsibility towardsthe society and also constituted a CSR Committee to ascertain the activities taken by thecompany in the best interest of the society although the Company does not fall in the mineof the applicability of Section 135 of the Companies Act 2013.
In accordance with the Company Acts 2013 the Company focus would be for working invarious elds to take step towards ecological development of the Society and environmentand thus being desirous to make the world a better place to survive and sustain. Amongstothers the Company will mainly focus on:
BUSINESS RESPONSIBILITY REPORT (BRR)
Regulation 34(2) of the SEBI Listing Regulations 2015 inter alia provides that theAnnual Report of top 500 listed entities based on market capitalisation ( calculated onMarch 31 of every nancial year shall include a Business Responsibility Report( BRR).
Your Company does not fall within the purview of the above mentioned regulationhowever in order to follow the best Corporate Governance practises and in the interest ofall the stakeholders your company has adopted its Business Responsibility report ( BRR)which is enclosed as Annexure to the Directors Report .
Your Company believes that Human Resource is important to the organizations in myriadareas ranging from strategic planning to company image. The purpose of Human Resourcedevelopment is to provide the 'coaching' needed to strengthen and grow the knowledgeskills and abilities that an employee already has. The goal of development and trainingis to make employees even better at what they do.
At Choice we believe that employees are the most treasured possessions and CrucialPlayers for the growth and Success of the Business. The Company as a structured inductionprocess at all locations and management development programs to upgrade skills ofmanagers. The Company has continued to conduct various employee bene t recreational andteam building programs to enhance employee skills motivation and in all to foster teamspirit. The Company is committed to fostering augmenting and holding its top talent ofthe Company.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to section 134 of the Companies Act 2013(including any statutory modications) or re-enactment(s) thereof for the time being in force) the Directors of theCompany con rm that:
a) That in preparation of the Annual Accounts for the year ended March 31 2018 theapplicable Accounting Standard had been followed along with proper explanation relating tomaterial departures if any. b) That the Director's had selected accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true & fair view of the state of affairs of the Company at theend of the Financial Year ended March 31st Match 2018 and of the Profit of the Companyfor the year. c) That proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.d) That the Annual accounts/ nancial statements have been prepared on a going concernbasis. e) That proper internal nancial control were in place and that the nancial controlwere adequate and were operating effectively; f) That the Director's have devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystem were adequate and operating effectively.
ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
A) CONSERVATION OF ENERGY
I) The steps taken or impact on conservation of Energy:
The operations of the Company are not energy-intensive. However adequate measures havebeen initiated for conservation of energy.
II) The steps taken by the Company for utilising alternate source of energy:
Though the operations of the Company are not energy intensive the Company promotesgreen energy and energy saving initiatives among its employees. The Company has installeda roof top solar power plants at its corporate of ce.
III) The Capital Investment on energy conservation equipment: by the company is aroundRs. 1400000/-
B) TECHNOLOGY ABSORPTION
i) The efforts towards technology absorption:
The minimum technology required for the business has been absorbed the company hasalso adopted an online enterprise wide Human Resource system which eliminates manualworking encourages paperless working & easy availability of data on the system.
ii) The benefits derived like product improvement cost reduction product developmentor import substitution Encourages paperless working & reduces manual working.
iii) In case of imported technology (imported during last three years reckoned from thebeginning of the nancial year): N.A.
iv)The expenditure incurred on Research and Development: Nil
C) FOREIGN EXCHANGE EARNINGS AND OUTGO:
There are no Foreign Exchange earnings and outgo during the year under review.
CEO & CFO CERTIFICATIONS
In terms of Regulations 17(8) of the Listing Regulations a certi cate as prescribed inPart B of the said Regulations from Mr. Kamal Poddar Managing Director of the Companyand Mr. Manoj Singhania Chief Financial Officeer of the Company for the Financial Year2017- 18 with regards to nancial statements and other matters are required under theListing Regulations forms part of the Report on Corporate Governance.
APPRECIATION & ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the contribution madeby the employees at all levels because of who's hard work and support your Company'sachievements would not have been possible.
The Directors also place on record their earnest gratitude for the continued supportextended by the bankers nancial institutions lenders and stakeholders and the faithrested by them for Choice.
Further the Directors express their sincere appreciation to the Reserve Bank of IndiaSecurities and Exchange Board of India BSE Limited Ministry of Corporate AffairsRegistrar of Companies Depositories other Government & Regulatory Authorities fortheir on- going support extended by the them towards your Company.
|On behalf of the Board of Directors || |
|Sd/- ||Sd/- |
|Kamal Poddar ||Ajay Kejriwal |
|(Managing Director) ||(Director) |
|DIN No : 015187000 ||DIN No: 03051841 |
|Mumbai : August 09 2018 || |
ANNEXURE TO DIRECTOR'S REPORT AOC-1
Statement containing the silent features of the nancial statement of subsidiaries/associate companies/ joint venture
PART "A" SUBSIDIARIES
[Pursuant to first proviso to Sub-section (3) of section 129 of the Companies Act2013 read with Rule 5 of the Companies (Account) Rules 2014]
|SR No ||Nme of Subsidiary ||Nreporting Periodame of Subsidiary ||Exchange Rate ||Share Capital ||Reserve & Surplus ||Total Assets ||Total Liabilities ||investments ||Turnover ||Profit Before Taxation ||Provision for Taxation ||Profit After Taxation ||Proposed Dividend ||% of Shareholding |
|1 ||Choice Equity Broking Private Limited ||March 31 2018 ||INR ||66500000 ||448611621 ||1865250116 ||1350138495 ||197350 ||743706524 ||61642021 ||24838613 ||36803408 ||- ||100 |
|2 ||Choice Merchandise Private Limited ||March 31 2018 ||INR ||14000000 ||110172902 ||287452559 ||163279657 ||4178419 ||116875873 ||72041453 ||2527321 ||69514132 ||- ||100 |
|3 ||Choice Capital Advisory Private Limited ||March 31 2018 ||INR ||50500000 ||24938157 ||110779213 ||35341056 ||50096906 ||64594912 ||11972499 ||548947 ||11423552 ||- ||100 |
|4 ||Choice Finserv Private Limited ||March 31 2018 ||INR ||20600000 ||428535 ||21626333 ||597798 ||- ||1424262 ||914949 ||149594 ||765355 ||- ||100 |
|5 ||Choice Consultancy Services Private Limited ||March 31 2018 ||INR ||50000000 ||51315272 ||213182286 ||111867014 ||- ||361290380 ||14656244 ||4357108 ||10299136 ||- ||100 |
|6 ||Choice Corporate ||March 31 2018 ||INR ||100000 ||(3134015) ||5987336 ||9021351 ||- ||22075213 ||760645 ||(31787) ||792432 ||- ||100 |
| ||Services Private Limited || || || || || || || || || || || || || |
|7 ||Choice Wealth Management Private Limited ||March 31 2018 ||INR ||100000 ||(20476497) ||5582464 ||25958962 ||- ||4218642 ||(20067650) ||153621 ||(20221271) ||- ||100 |
|8 ||Choice peers International Private Limited ||March 31 2018 ||INR ||1000000 ||(10840189) ||5492950 ||15333139 ||- ||241448 ||(8723942) ||(3899859) ||(4824083) ||- ||100 |
|9 ||Choice Retail Solutions Private Limited ||March 31 2018 ||INR ||100000 ||(1283975) ||600484 ||1784459 ||- ||167874 ||(240611) ||- ||(240611) ||- ||100 |
|10 ||Choice Portfolio Management Services Private Limited ||March 31 2018 ||INR ||21100000 ||(443356) ||22992952 ||2336307 ||- ||1493212 ||420591 ||108300 ||312291 ||- ||100 |
|11 ||Choice Tech Lab Solutions Private Limited ||March 31 2018 ||INR ||100000 ||3844549 ||30814388 ||26869839 ||- ||98561236 ||9343101 ||1205551 ||8137550 ||- ||100 |
1. During the year the name of M/s. Choice Insurance Brokers Private Limited has beenchanged to M/s. Choice Stock Trade Private Limited and further changed to M/s. ChoicePortfolio Management Services Private Limited with effect from July 24 2017.
2. Choice Consultancy Services Private Limited includes share of Jointly ControlledOperations. 3. Choice E-Commerce Private Limited ceased to be a subsidiary from March 262018
4. The Company has acquired 100 % stake in M/s. Choice Retail Solutions Private Limitedwith effect from December 06 2018.
Part B ASSOCIATES/ JOINT VENTURES
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
|SR No ||Name of Associates / Joint Ventures ||Aqua Pumps Infra Ventures Limited (Associate) ||Thought Consultants Jaipur P L in JV with Choice Consultancy Service P L |
|1. ||Latest audited Balance Sheet Date ||31.03.2018 ||31.03.2018 |
|2. ||Shares of associates/ Joint Ventures held by the company on the year end || || |
| ||I. Numbers ||5952850 ||- |
| ||ii. Amount of Investment in Associates/ Joint Ventures ||148792305 ||- |
| ||iii. Extent of Holding % ||39.35% ||50.00% |
|3. ||Description of how there is significant in uence ||By shareholding ||Joint Controlled Operation of CCSPL |
|4. ||Reason why the associates/ joint venture is not consolidated ||Consolidated ||Consolidated |
|5. ||Networth attributable to shareholding as per latest audited Balance Sheet ||135421912 ||726733 |
|6. ||Profit/ Loss for the year || || |
| ||i. Considered in Consolidation ||2100552 ||385692 |
| ||ii. Not considered in Consolidation ||- ||- |
PARTICULARS OF CONTRACTS/ARRANGMENTS MADE WITH RELATED PARTIES
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Account) Rules 2014
Form for disclosure of particulars of contract/ arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm length transaction under third proviso thereto
1. Details of contracts or arrangements or transaction not at arm's length basis: Therewere no contracts or arrangements or transaction entered in to during the year ended March31 2018 which were not at arm's length basis.
2. Details of material contracts or arrangements or transaction at arm's length basis:
|Names of the Related Party ||Nature of Relationship ||Nature of contracts ||Duration of Contracts ||Silent Terms of Contracts ||Dates of Approval by the Board ||Amount Received in Rs. |
|Choice Equity Broking Private Limited ||Subsidiary Company ||Officee Rent + Support Service Charge ||10 Years ||Lease Rent for of ce Premises+ Service Charge ||April 29 2017 ||36713610 |
|Choice Merchandise Broking Private Limited ||Subsidiary Company ||Officee Rent + Support Service Charge ||10 Years ||Lease Rent for of ce Premises+ Service Charge ||April 29 2017 ||11437527 |
|Choice Wealth Management Private Limited ||Subsidiary Company ||Officee Rent + Support Service Charge ||10 Years ||Lease Rent for of ce Premises+ Service Charge ||April 29 2017 ||1581463 |
|Choice Capital Advisors Private Limited ||Subsidiary Company ||Officee Rent + Support Service Charge ||10 Years ||Lease Rent for of ce Premises+ Service Charge ||April 29 2017 ||8949800 |
|Choice Consultancy Services Private Limited ||Subsidiary Company ||Officee Rent + Support Service Charge ||10 Years ||Lease Rent for of ce Premises+ Service Charge ||April 29 2017 ||34861489 |
|S K Patodia & Associates ||Associates rm ||Support Service Charge ||10 Years ||Service Charge ||April 29 2017 ||17009412 |