Continental Securities Limited ("Company")
We are glad to take this opportunity to present the Twenty Ninth Annual Report on thebusiness and operations of the Continental Securities Limited (hereinafter referred as"we" or "Company) together with the Audited Financial Statements for theFinancial Year ended March 31 2019.
1. FINANCIAL PERFORMANCE:
The financial performance of the company for Financial Year2018-19 is summarized herebelow:
| || ||(Rs. In Lacs.) |
|Particulars ||Year Ended 31st March2019 ||Year Ended 31stMarch2018 |
|Income ||41.26 ||42.88 |
|Total Expenditure ||31.02 ||34.56 |
|Profit before Interest Dep. And tax ||10.24 ||8.32 |
|Interest ||0.00 ||0.02 |
|Depreciation ||1.40 ||1.91 |
|Taxation ||2.39 ||3.95 |
|Net profit ||6.45 ||2.44 |
|Profit (Loss) brought forward ||17.80 ||17.95 |
|Net Profit (Loss) carried forward ||20.42 ||17.80 |
2. REVIEW OF OPERATIONS
Your Company is registered as a Non-Banking Finance company to carry out FinancialActivities in India. In order to build a high-quality loan book company iscontinuouslyworking tremendously.During the year under review the Company has registered agross income of Rs. 41.26 Lacs as compared to the income of Rs. 42.88Lacs in the previousyear. The net profit of the company was Rs. 6.45 lacsas against net profit of Rs. 2.44lacs in the previous year.
3. CHANGE IN NATURE OF BUSINESS
During the year there was no change in the nature of business of the Company.
Directors have considered reinvesting the profits into the business of the Company inorder to build a strong reserve base for the long-term growth aspects of the Company.Accordingly no dividend has been recommended for the financial year ended March 31 2019.
A sum of Rs. 1.99 Lacshas been transferred by company to Reserve out of which Rs. 1.25Lacs has been transferred to Reserve Fund as per guidelines prescribed by Reserve Bank ofIndia. Also a provision of rs. 74260 @ 0.25 % on the standard assets of the Company wasmade during the year.
6. OUTLOOK ON NBFCs
India has been witnessing good growth in consumer leading in recent years and NBFCshave been growing this business much better than banks. NBFCs are here to stay and play animportant role in economic growth and financial inclusion. As India's economy grows therequirement for credit will rise more than proportionately. We need both banks and NBFCsto step up to the challenge and power the economy with free-flowing credit lines.
7. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion& Analysis Report Pursuant to Regulation 34 of SEBI (ListingObligation and Disclosure Requirements)Regulation 2015 is annexed herewith as Annexure IVto this Report.
8. RISK MANAGEMENT
Company has implemented an integrated risk management approach through which it reviewsand assesses significant risk on a regular basis to ensure the there is a robust system ofrisk controls and mitigation.
Senior management periodically review the risk management. The management however ofthe view that no risk element is identified which in opinion of the board may threaten theexistence of the company.
Company considers that risk is an integral part of its business and therefore it takesproper steps to manage all risks in a proactive and efficient manner. The Board has formeda Risk Management Committee to identify the risks impacting the business formulatestrategies/ policies aimed at risk mitigation as part of risk management. Further a coreteam comprising of senior management has also been formed to identify and assess keyrisks risk appetite tolerance levels and formulate strategies for mitigation of risksidentified in consultation with process owners.
The Risk Management Committee of the Company monitors and reviews the risk managementplan of the Company inaccordance with the Risk Management Policy of the Company.
9. RBI GUIDELINES
During the year there were nofrauds have been reported by the Company The Company hascontinued to follow all applicable guidelines issued by the Reserve bank of India forNBFCs regarding Capital Adequacy Asset Classification and provisioning and incomerecognition on non-performing asset as applicable to category of NBFCs not acceptingPublic Deposits.
The Company has not accepted any deposits within the meaning of the Companies(Acceptance of Deposits)Rules 2014 or Chapter v of the Companies Act2013 and guidelinesand directions of Non-Banking Financial Companies (Acceptance of Public Deposits )(Reserve Bank) Directions 2016 as prescribed by RBI in this regard and as such no detailsare required to be furnished..
11. DEPOSITS FROM DIRECTORS
During the financial year 2018-19 Company has not borrowed any amount from itsDirectors.
12. SHARE CAPITAL:
The Company has 3250600 Equity Shares of Rs. 10/- each amounting to Rs. 32506000during the year under review; the Company has not issued any shares or any convertibleinstruments. The Company has only one class of Equity Share having a par value of Rs.10/-. Each holder of share is entitled to one vote per share with same rights. During theYear 2018-19 the Company has not made any issue of equity shares with differential votingrights Sweat Equity Shares and Employee Stock Option.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Pursuant to Section 186(11) of the Companies Act 2013 loans made guarantees given orsecurities provided or acquisition of securities by a Non-Banking Finance company in theordinary course of its business are exempted from disclosure in the Board's Report.
14. SIGNIFICANT AND MATERIAL ORDERS
No significant or material order has been passed by the Regulators/Courts or Tribunalswhich can impact the going concern status and Company's operation in future.
15. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Except Appointment of KMP there were no material changes occurred subsequent to theclose of financial year of the company to which the balance sheet relates and the date ofthe report which can affect the financial position of the Company.
16. Directors/Key Managerial Personnel Appointment / Reappointment / cessation
A.) Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr.MadanLalKhandelwal (DIN: 00414717) Chairman of the Company who retires by rotation andbeing eligible offers himself for re-appointment .
B.) Pursuant to the provisions of section 149 and 152 read with schedule (IV ) of thecompanies Act 2013 Mr. Suresh Kumar Gupta (DIN: 00217474) who was appointed as anIndependent Director and holds office up to the date of 3rd December 2018 and beingeligible for re-appointment to hold office with effect from 04 December 2018 for a term of5 (Five ) consecutive Years.
C.) Pursuant to the provisions of section 149 and 152 read with schedule (IV) of thecompanies Act 2013 Mr. Vishnu Dusad (DIN: 03041606) who was appointed as anIndependent Director and holds office up to the date of 28th March 2019 and beingeligible for re-appointment to hold office with effect from 29th March 2019 for a term of5 (Five ) consecutive Years.
D.) Pursuant to the provisions of section 149 and 152 read with schedule (IV) of thecompanies Act 2013 Mrs. Ruchi Gupta (DIN: 06827155) who was appointed as anIndependent Director and holds office up to the date of 28th March 2019 and beingeligible for re-appointment to hold office with effect from 29th March 2019 for a term of5 (Five ) consecutive Years.
Key Managerial Personnel:
There was no change in the Key Managerial Personnel during the year 2018-19 underreview.
Pursuant to the provisions of section 203 of the Companies Act 2013 read with therules made thereunder the following are the key managerial personnel of the company:
1. Mr. Rajesh Khuteta Managing Director
2. Mr. Hemant Gupta Chief Financial Officer
3. Mr. Jagdish Chandra Kedawat Company Secretary.
Moreover Mr. Jagdish Chandra Kedawathas resigned from the post of Company Secretaryand compliance officer w.e.f15/04/2019 due to personal reasons consequently Ms. PravitaKhandelwal was appointed as the Company Secretary and compliance officer of the Companyw.e.f. 12/07/2019.
17. INDEPENDENT DIRECTORS MEETING
During the year under reference one meeting of Independent directors was held on 09thFebruary 2019 in compliance with the requirement of Schedule IV of the Companies Act2013.At the said meeting performance of non-independent Directors Board as a whole andChairman of the Company was reviewed.
18. FORMAL ANNUAL EVALUATION
The Evaluation/assessment of Directors(Board as a whole)) KMPs and IndependentDirectors Senior Officials Committees of the company is conducted on an Annual basis tosatisfy the requirements of the companies Act 2013 and SEBI (LODR) LISTING OBLIGATION ANDDISCLOSURE REQUIREMENTS Regulation2015
1. Assess & Robust implement policies and structures procedures.
2. Development of suitable strategies and business plans at appropriate time and itseffectiveness.
3. Communication of expectations & concerns clearly with subordinates.
4. Exercise of objective independent judgment in the best interest of the company.
5. Oversight of financial reporting process including internal controls.
6. Discharge of functions and duties as per the terms of reference.
7. Review management's succession plan & effective meetings.
8. Clearly defining roles & monitoring activities of committees.
9. Review of corporations and ethical conduct.
10. Obtain adequate relevant & Timely information from external sources.
19. BOARD MEETINGS
Minimum four pre-scheduled Board meetings are held annually. Additional Board meetingsare convened by giving appropriate notice to address the Company's specific needs. In caseof business exigencies or urgency of matters resolutions are passed by circulation.
During thefinancial year2018-19 07 (Seven) meetings of the Board of Directors wereheld. The Board met Seven times during the year 2018-19 viz.
Meeting no. 01/2018-19 held on April 09 2018;
Meeting no. 02/2018-19held on April 28 2018;
Meeting no. 03/2018-19held on May 28 2018;
Meeting no. 04/2018-19held on August 08 2018;
Meeting no. 05/2018-19held on August 302018;
Meeting no. 06/2018-19held on November 14 2018;
Meeting no. 07/2018-19held on February 09 2019;
(All Directors were present in all Board meetings.)
The intervening gap between the meetings was within the period prescribed under theCompanies Act 2013 and Secretarial standards on meetings of board of directors issued byICSI.
20. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL)ACT2013
The company has zero tolerance for sexual harassment at work places and has in place apolicy on prevention prohibition and redressal of sexual harassment at work place in theline of provisions of Sexual Harassment of women at work place (Prevention prohibitionandredressal )Act2013and the rules framed there under .
The following is a summary of sexual harassment complaints received and disposed offduring the year 2018-19
Number of complaints received - NIL
Number of complaints disposed OFF - NIL
21. CORPORATE SOCIAL RESPONSIBILITY
Provisions of companies Act 2013 (section 135)relating to Corporate socialresponsibility does not apply to the company.
22. RELATED PARTY TRANSACTIONS:
All the related party transactions are placed before the Audit Committee for approval.All the related party transactions that were entered during the financial year are done onarm's length basis.
Particulars of contracts or arrangements with therelated parties as referred to insub-section (1) of section 188 of the Companies Act 2013 are disclosed in Form No.AOC -2and the same forms part of this report as Annexure III. All theRelated Party Transactionsas required underAS-18 are reported in the Notes to the financialstatement.
23. EXTRACTS OF ANNUAL RETURN:
Pursuant to section 134(3) and section92(3) of the Companies Act2013(hereinafterreferred as "Act") read with Rule 12 of the Companies (Management andAdministration ) Rules 2014 as amended an extract of Annual Return as on 31st March2019 in form MGT-9 has been prepared and enclosed as Annexure -Iwhich form part of thisreport.
24. AUDITORS & AUDIT REPORT:-
M/S Gopal Sharma &Company were Appointed Statutory Auditors of the company at28th Annual General Meeting for a period of five years i.e. till the conclusion of the33th Annual General Meeting of the company.
The Remuneration of the said Auditors is proposed to be fixed by The Board on therecommendation of Audit Committee. The said Auditor will be paid out of pocket expenses inconnection with the audit.(As per the provisions of section 40 of the companies(Amendment ) Act 2017 notified with effect from 7th May 2018 there is no requirementfor ratification of appointment of statutory Auditors at every Annual General Meeting ofthe company and therefore the board has not proposed the ratification of appointment ofthe said auditor at the ensuing AGM. )
The notes on Financial Statement referred to the Auditors Report as wellexplanatory and do not call for further comments. The Auditors Report does not contain anyqualification reservation adverse remark or Disclaimer.
Pursuant to section 138 of company Act 2013 read with companies (Audit and Auditors )Rules 2014 every listed company is required to appoint an internal Auditor or a firm ofinternal Auditors to carry out internal Audit of the company .
M/S Ajay Khandelwal& Associates were appointed internal Auditors of the Company forthe year ended 31st March 2019 under the provisions of Companies Act2013 .The Companyproposes to continue their services for the year 2019-20.
The Board has re-appointed M/S Ajay Khandelwal&Associates Chartered Accountants Jaipur (Firm Reg. No. 012738C)as the internal Auditor of the company for the financialyear 2019-20.
The internal Audit Report is received yearly by the company and the same is reviewedand taken on record by the Audit Committee and Board of Directors .The Yearly InternalAudit Report as received for the financial year 2018-19 is free from any Qualification .
Pursuant to provisions of Section 204 of the companies Act2013 read with Companies(Appointment and remuneration of managerial personnel) Rules 2014 Every listed companyis required to appointment a Secretarial Auditor to carry out Secretarial Audit of thecompany.
In consonance with the requirements of aforementioned M/S MKGP & ASSOCIATESCompany Secretaries in Practices Jaipur (Registration No.P2016RJ058200) were appointed asSecretarial auditors of the company for the Financial year 2019-20.
Secretarial Audit Report as issued by M/S MKGP & ASSOCIATES Companies secretariesin practices in respect of the secretarial audit of the company in form MR-3 for thefinancial year ended on 31st March 2019 is given in Annexure II to this Report.
The Board has re-appointed M/S MKGP & ASSOCIATES Companies secretariesJaipur(Firm Reg. No. P2016RJ058200)as the Secretarial Auditor of the company for the financialyear 2019-20.
The Secretarial Audit report submitted by them is annexed. The report does not containany qualification.
25. VIGIL MECHANISM
In Accordance of Section 177 of the Companies act 2013 the Company has constituted aWhistle Blower policy/ Vigil Mechanism to establish a vigil mechanism for the Directorsand employees to report genuine concerns in such manner as may be prescribed and to reportto the management instances of unethical behavior actual or suspected fraud or violationof company's code of conduct.
26. SUBSIDARIES/ ASSOCIATED COMPANIES
There is no subsidiary/associate of the company.
27. FAILURE TO IMPLEMENT ANY CORPORATE ACTION
28. NOTICES RECEIVED/PENALTY IMPOSED
29. HUMAN RESOURCES:-
Company values its Human Resources the most. To keep their morale high Company extendsseveral welfarebenefits to the employees and their families by way of comprehensivemedical care education housing and social security.
30. BOARDS COMMITTEES:-
The Boards of Directors of the Company has constituted various Committees inCompliances with the Provision of the Companies and SEBI listing Regulations such asAudit Committee Nomination Remuneration and Compensation Committee Shareholder GrievanceCommittee.
All Decision pertaining to the constitution of the Committees appointment of membersand fixing of the terms of reference /role of the committees are taken by the Board ofDirectors.
The Audit Committee comprises Independent Director namely Shri Suresh Kumar Gupta(Chairman) Shri Vishnu Dusad and MrsRuchi Gupta During the year all the recommendationmade by the Audit Committee were accepted by the Board.
During the financial year 2018-19 04 (Four) Committee meeting were held .
Meeting no. 01/2018-19 held on May 28 2018;
Meeting no. 02/2018-19 held on August 08 2018;
Meeting no. 03/2018-19 held on November 14 2018;
Meeting no. 04/2018-19held on February 09 2019.
(All members were present in all Audit committee meetings)
NOMINATION AND REMUNERATION COMMITTEE
The Board on the recommendation of the Nomination remuneration and compensationCommittee has adopted a policy for Selection appointment and remuneration of Directorskey Managerial personnel and Senior Management. Committee Meeting heldduring the year onAugust 08 2018.
SHARE TRANSFER COMMITTEE
The Share transfer Committee meeting comprises Independent Director namely Shri SureshKumar Gupta (Chairman) Shri Vishnu Dusad and MrsRuchi Gupta.During the year all therecommendation made by the Audit Committee were accepted by the Board.
During the financial year2018-19 07 (Seven) Committee meeting were held .
Meeting no. 01/2018-19 held on July 13 2018;
Meeting no. 02/2018-19 held on July 20 2018;
Meeting no. 03/2018-19 held on September 17 2018;
Meeting no. 04/2018-19held on September 27 2018;
Meeting no. 05/2018-19held on October 132018;
Meeting no. 06/2018-19held on December 01 2018;
Meeting no. 07/2018-19held on March 12 2019.
31. Disclosure on Secretarial Standards by Directors;
The company complies with all applicable Standards . The Directors have devised propersystems to ensure compliance with the provisions of all applicable Secretarial Standardsand that such systems are adequate and operating effectively.
32. PREVENTION OF INSIDER TRADING
The Company has adopted a code of conduct for fair disclosure and prevention of insidertrading in order to regulate and control trading in securities by Directors and designatedemployees of the Company. The code requires pre-clearance for dealing in the Companyshares and prohibits the purchase and sales of Company shares by Directors and designatedemployees while in possession or unpublished price sensitive information in relation toCompany and during the period of closure of trading window.
33. Disclosures on Remuneration of Directors and Key Managerial Personnel
|S.No ||Name of Director/KMP and its designation ||Remuneration (or Sitting Fees)to the Director/KMP for the Financial Year 2018-19 ||Percentage Increase/Decrea se in remuneration in the Financial Year 2018-19 ||Ratio of Remuneration of each director to the Median Remuneration of Employees |
|1. ||Mr. M.L. Khandelwal (Chairman) ||8250.00 ||0.00 ||0.09 |
|2. ||Mr. Rajesh Khuteta ||900000 ||9.61 ||10.60 |
|3. ||Mr. Vishnu Dusad (Independent Director) ||8250.00 ||0.00 || |
|4. ||Mr. Suresh Kumar Gupta (Independent Director) ||8250.00 ||0.00 ||0.09 |
|5. ||Mrs. Ruchi Gupta (Independent Director) ||8250.00 ||0.00 || |
|6. ||Mr. J.C. Kedawat (Company Secretary) (Resigned:- 15.04.2019) ||240000.00 ||0.00 ||2.82 |
|7. ||Mr. Hemant Gupta (C.F.O) ||234000.00 ||2.63 ||2.75 |
Moreover Mr. Jagdish Chandra Kedawat has resigned the post of company secretary on15.04.2019 due to personal reasons Consequently Ms. PravitaKhandelwal was appointed asthe company secretary of the company w.e.f 12.07.2019 on the remuneration of 252000/-per annuam.
REMUNERATION OF NON-EXECUTIVE/EXECUTIVE DIRECTORS
Details pertaining to remuneration as required under Section 197(12) of the companiesact 2013read with Rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) 2014 :
*Only sitting fee is paid to Independent and non executive Directors.
i. The number of employees on the roll of the company are two.
ii. The median remuneration of employees( MRE ) of the Company is Rs.84900.00 .The MREfor the year is decreased by 12.58 %compared to previous year.
iv. There is no variable component in remuneration of Directors of the Company.
v. The ratio of the remuneration of the highest paid director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid directorduring the year -None .
vi. It is hereby affirmed that the remuneration paid is as per the remuneration policyof the company.
34. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (5) of the Companies Act 2013your Directorsstate that :
1. That in preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationand there are no material departures from the same;
2. That they have selected such accounting policies and applied them consistently andmade 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 31stmarch 2019 and of the profit or loss of the Company for that period ;
3. That they have taken proper and sufficient care for the maintenance of properaccounting records in accordance with the provisions of the companies Act 2013 and rulesmade there under for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
4. That they have prepared the annual accounts for the financial year ended 31st March2019 on a going concern basis.The Directors had laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively.
5. The directors had devised proper and systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
35. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO:
(A) CONSERVATION OF ENERGY-
(i) the steps taken or impact on conservation of energy;
The operations of Company are not energy intensive.
(ii) the steps taken by the company for utilizing alternate sources of energy;
The Company is exploring alternative source of energy as and when the necessityarises.
(iii) the capital investment on energy conservation equipment;
(B) TECHNOLOGY ABSORPTION-
(i) The efforts made towards technology absorption;
The minimum technologyrequired for the business has been absorbed.
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution;
(iii) In case of imported technology;
(iv) The expenditure incurred on Research and Development
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO -
The Foreign Exchange earned in terms of actual inflows during the year and theForeign Exchange outgo during the year in terms of actual outflows.;
36. CORPORATE GOVERNANCE
As per to SEBI (Listing Obligation & Disclosure Requirements ) Regulations2015Company is not in previewof Corporate governance regulation .Hence Corporate GovernanceReport is not enclosed with Directors Report
The Board would like to place on record its sincere appreciation to all the employeesfor their continued efforts towards the growth of the company. The Board also wishes toplace on record the support extended by its Bankers and the trust reposed in it by itsshareholders.
|Regd. Office: || |
|301Metro Plaza || |
|Gopalbari Jaipur 302001 ||For and on behalf of the Board of Directors |
|DATE: 13.08.2019 ||CONTINENTAL SECURITIES LIMITED |
|Sd/-Sd/- || |
|Rajesh KhutetaMadanLalKhandelwal || |
|Managing Director ||Chairman |
|DIN NO. 00167672 ||DIN:- 00414717 |