TO THE MEMBERS OF
THE FIRST CUSTODIAN FUND (INDIA) LIMITED
The Directors take pleasure in presenting the Thirty - First Annual Report togetherwith the audited financial statements for the year ended 31st March 2017.
1. FINANCIAL RESULTS
Key highlights of the financial results for The First Custodian Fund (India) Limitedfor the financial year 2016 - 17is tabulated below:
| || ||(Rs. in Lacs) |
|PARTICULARS ||Year Ended 31/03/2017 ||Year Ended 31/03/2016 |
|Gross Income ||66.90 ||21.00 |
|Total Expenditure ||33.96 ||33.88 |
|Interest Expenses ||0.94 ||1.27 |
|Gross Profit ||32 ||(14.15) |
|Depreciation ||1.47 ||1.35 |
|Profit / (Loss) Before Tax ||30.54 ||(15.50) |
|Less : IncomeTax ||6.60 ||3.00 |
|Less /Add : DeferredTax ||0.12 ||0.34 |
|Less : Income TaxPaid - W/Off ||0.00 ||0.34 |
|Net Profit / (Loss) After Tax ||24.06 ||(18.50) |
|Add : Profit brought forward from previous year ||777.88 ||796.34 |
|APPROPRIATIONS ||0.00 ||0.00 |
|Profit Carried Forward to Balance Sheet ||801.94 ||777.85 |
2. HIGHLIGHTS OFPERFORMANCE
Total income for the financial year 2016 - 17increased by 218.57% to Rs.66.90Lacs as compared to Rs. 21.00 Lacs in the previous financial year 2015- 16.
Total Profit before Tax for the financial year 2016- 17 is Rs.30.54 Lacs ascompared to loss of Rs. 15.50 Lacs in the previous financial year 2015 - 16.
3. BUSINESS OPERATIONS
The Company is a member of National Stock Exchange (NSE) registered as Stock Broker andcarrying on the business in brokerage in shares. The Company is an investor in shares andalso trades in futures & options. There was no change in nature of business of theC'ompany during the year under review.
With a view to deploy the profits into the existing operations of the company Board ofDirectors has not recommended any dividend for the year.
5. TRANSFER TO RESERVES
The Board of Directors has not recommended transfer of any amount to reserves.
6. CAPITAL EXPENDITURE
Capital Expenditure during the financial year amounted to Rs. 57300/- towards Computerinclusive of Office Equipment.
7. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2017 was Rs. 15000OQO/-. Duringthe year under review the Company has not issued shares with differential voting rightsnor granted stock options nor sweat equity. There was no change in the Company's sharecapital during the year under review.
The Company has not accepted deposit from the public and shareholders falling withinthe ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014. Hencethe requirement forfurnishing details of deposits which arenot incompliance with the Chapter V of the Act is not applicable.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186of the Companies Act 2013 are given in the notes to the Financial Statements.
10. SUBSIDIARY COMPANIES
The Company has no Subsidiary Company.
11.1 Retirement by Rotation
Pursuantto Section 152(6) of the Companies Act 2013 and in terms of the Articles ofAssociation of the Company Mr. Manish Banthia Whole-Time Director retires by rotation atthe forthcoming Annual General Meeting and being eligible offers himself forre-appointment.
11.2 Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Act read with Rule 8(5)(iii) of theCompanies (Accounts) Rules 2014framed thereunder:
1. Mr. Manish Banthia Whole - Time Director
2. Mr. Giriraj Dammani Managing Director
None of the Key Managerial Personnel have resigned during the year under review.
11.3 Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year the Company has held 4 (four) Board Meetings which were held on 27!hMay 2016; 12th August 2016; 11th November 2016 and 14th February 2017. The BoardMeetings has been held during the year in such a mannerthat not more than 120 days shallintervene between two consecutive meetings of the board as prescribed under Section 173 ofthe Companies Act 2013. As per section 167(1)(b) all the directors have attended atleastone Board Meeting held during the financial year.
12. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: a) that in the preparation of the annualfinancial statements for the year ended 31st March 2017 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any;
b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the year ended on thatdate;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordancewith the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
13. PLEDGE OFSHARES
None of the equity shares of the Directors of the Company are pledged with any banks orfinancial institutions.
14. RELATED PARTY TRANSACTIONS
During the year the company has not entered into any related party transactionsexceptpayment of remuneration and sitting fees to the directors.
15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
16. DISCLOSURES UNDER SECTION 134 (3) (I) OF THE COMPANIES ACT. 2013
No material changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and date of thisreport.
17. DISCLOSURE UNDER THE SEXUAL HARASSMEN T OF WOME N AT WORKPLACE
(PREVENTION. PROHIBITION AND REDRESSAL) ACT 2013
As per the requirement of the Sexual Harassmentof Women at Workplace (PreventionProhibition
& Redressal) Act 2013 and Rules made thereunder your Company has in-place aPolicy for Prevention of Sexual Harassment of Women at Workplace and constituted anInternal Complaints Committees (ICC). No complaint has been raised during the year ended31st March 2017.
18. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES. JOINT
VENTURES OR ASSOCIATE COMPANIES
There are no companies which have become or ceasedto be its Subsidiaries Joint Ventureor Associate Companies during the financial year 2016 - 17.
19. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The criteria prescribed for the applicability of Corporate Social Responsibility underSection 135 of the Companies Act 2013 is not applicable to the Company.
20. BUSINESS RISK MANAGEMENT
The nature of business is investment arbitrageand trading in shares. The inheritantrisks to the business of the company are as follows:
a. Monetary Policy of the Country
b. Interest Rate Cycle
c. Fluctuation in crude oil and commodity prices
d. Changes in Government policies
e. Status of Indian & World Economy
The nature of risk is dynamic of business and entrepreneurship. The Company hasnotformed Risk Management Committee since it is not applicable under Regulation21 of theSEBI (LODR) Regulations 2015.
21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company hasan Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter.
The Company monitors and evaluatesthe efficacy and adequacyof internal control systeminthe Company its compliance with operating systems accounting procedures and policies atall locations of the Company. Based on the report of internal audit functionprocessowners undertake corrective action in their respective areas and thereby strengthenthe controls.
22. INFORMATION SYSTEM
In a business where information is critical Information Technology plays a vitalrolefacilitating informed decision making to grow the business. Over the years theCompany has invested extensively in infrastructure people and processeswith the objectiveto capture protectand transmit information with speed and accuracy.
23. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The provision of regulations of the SEBI (LODR) Regulations2015 regarding VigilMechanism and Whistle Blower Policy is not applicable to the Company.
24. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT
VENTURES OR ASSOCIATE COMPANIES
There are no companies which have become or ceasedto be its Subsidiaries JointVentureor Associate Companies.
25.1 Statutory Auditors
M/s. Paresh D. Shah & Co. CharteredAccountantsthe outgoing auditors has completedhis term as auditor pursuant to Section 139(2) of the Act at the end of conclusion of the43rd Annual General Meeting.
It is proposed to appoint M/s. Vivek Khandor &Associates CharteredAccountant asStatutory Auditor of the company for the Company's financial year 2017 - 18 to hold officefrom the conclusion of this Annual General Meeting of the Company till the conclusion ofthe next Annual General Meeting in place of M/s. Paresh D. Shah & Co. CharteredAccountants.The Company has received a letter from M/s. Vivek Khandor &AssociatesCharteredAccountant t o the effect that their appointment if made would bemaintain be within the prescribed limit under Section 141 (1 )(g)of the Companies Act2013 and that they are willing to act as statutory auditors of the company.
25.2 Statutory Auditors' Observations
The notes on financial statements referred to in the Auditor's Reportareself-explanatory and do not call for any further comments. The Auditor's Report is anUn-modified report anddoes not contain any qualification reservation adverse remark ordisclaimer.
25.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. R R Shah & Co. Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report is annexedherewith as "Annexure A".
25.4 Qualifications in SecretarialAudit Report
A. Appointment of Company Secretary& Chief Financial Officer:
As per Section 203 (1) (ii) & (iii) the Company is required to appoint CompanySecretary & Chief Financial Officer. The Company has not appointed CompanySecretary 8 Chief Financial Officer consequently the Annual Audited Financial Statementsare not signed by Company Secretary & Chief Financial Officer . In this regard themanagement of the Company has provided the following reply:
i) The Company has appointed Mr. ChandrakantPandeyas Compliance Officer of the Companywho looks after the compliance of the Companies Act 2013 and the SEBI Act and rules madethere under;
ii) The Company has availed the services of Practicing Company Secretary for advisingon compliance of Companies Act 2013 and SEBI Act and rules made there under; iii) TheVolume and Scope of work for the Company Secretaryand Chief Financial Officerare less andit is not a full time work and the job of Company Secretaryand Chief FinancialOfficer arenot attractive commensurate with the scope of work and salary.
B. Constitution of Audit Committee & Nomination and Remuneration Committee:
As per Section 1 77 and 1 78 of the Act the Company is required to constitute AuditCommittee & Nomination and Remuneration Committee. TheCompanyhas not constitutedAudit Committee 8 Nomination and Remuneration Committee. In this regard the managementof the Company has provided the following reply:
i) The Volume and Nature of business is very small. The Company does not have thefunction of Audit Committee & Nomination and Remuneration Committee.
C. Appointment of Internal Auditor:
As per Section 138of the Act the Company is required to appoint Internal Auditor.The Company has not appointed Internal Auditor. In this regardthe management of theCompany has provided the following reply:
)i The size of operation of the Company is very small accordingly it is not viable toappoint Internal Auditor but the Company has established the internal control system.
D. Website Posting:
As per the various sections of the Companies Act 2013 regulations of the SEBI (LODR)Regulations 2015 and Secretarial Standard - 2 the Company is required to post variousinformation / policies on the website of the Company. The Company has not posted anyinformation /policies on the website of the Company. In this regard the management ofthe Company has provided the following reply:
i) The Company isfiling regularly all the information with BSEand all the informationis available on the website of BSE.
E. Dematerialization of Promoters Shareholding:
As per Regulation 31 (2) of the SEBI(LODR) Regulations 2015 the listed entity shallensurethat 100% of shareholding of promoters and promoter group is maintained indematerializeform and the same is maintained on a continuous basis. One of thepromoters ho/ding 4500 equity shares (0.30% of total equity share capital) listed onBSELimited is not held in dematerialized form.
F. Composition of Board of Directors:
The present constitution of Board of Directors is represented by 2 Executive Directorand 1 Non-Executive Promoter Director. As per Section 149of the Companies Act 2013 theCompany is required to appoint Independent Director and Woman Director. The Company hasnot appointed Independent Director and Woman Director. In this regard the managementof the Company has provided the following reply:
i) The Volume and Nature of business is very small. Therefore it is not viable toappoint Independent Director and Woman Director.
As per Regulation 15(2) of the SEBI (LODR) Regulations 2015 the provisions ofCorporate Governance are non-mandatory to the following class of Companies:
a. Companies having paid up equity share capital not exceeding Rs. 10 crore and Networth not exceeding Rs. 25 crore as on the last day of the previous financial year;
Provided that where the provisions of Regulation 27 becomes applicable to a company ata later date such company shall comply with the requirements of Regulation 27within sixmonths from the date on which the provisions became applicable to the company.
b. Companies whose equity sharecapital is listed exclusively on the SME andSME-ITPPlatforms.
The paid up share capital of the Company is Rs. 1.5croresason31s' March 2017. Thereserve and surplus is Rs. 8.38 crores. Accordingly the paid up capital and net worth isbelow the prescribed limit for mandatory applicability of Corporate Governance clause asper Regulation 15(2)(a) of the SEBI (LODR) Regulations 2015. The Company has decided notto opt for compliance of Regulation 27 for the time being. The letter for the same hasbeen filed withBSE on 6th February 2017.
27. MANAGEMENT DISCUSSION AND ANALYSIS
The Company has opted for exemption under Regulation 15(2) of SEBI (LODR) Regulation2015 in respect of report on Management Discussion and Analysis.
28. ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is as under:
A. Conservation of Energy Technology absorption adaptation and innovation
The Company is not engaged in any manufacturing activity. The Company is inserviceindustry.
Hence the Company has not taken any energy conservation measures.There are noadditional investments and proposals for reduction of consumption of energy. The Companyhas not deployed any Research and Development facility or absorbed any technology. Henceno disclosures are required to be given.
B. Foreign Exchange Earning & Outgo
|Foreign Exchange Earnings/Outgo ||(Rs. I n ||Millions) |
|Foreign Exchange Earned || ||Nil |
|Foreign Exchange Outgo || ||Nil |
29. LISTING WITH STOCK EXCHANGES
Your Company is listed with BSELimited and the Company has duly paid the listing feesto the Exchange.
30. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure B".
31. PARTICULARS OF EMPLOYEES
During the year there was no employee in receipt of remuneration as prescribed in theRule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel)Rules2014.
However in accordance with the provisions contained in the proviso to Section 136(1)of the Companies Act 2013 the Annual Report and accounts excluding the aforesaidinformation are being sent to the shareholders of the Company. Any member interested inobtaining such particulars may write to the Compliance Officer at the Registered Office ofthe Company for the same.
32. HUMAN RESOURCES
The relations of the employees of the Company have been cordial during the year.Employees are considered to be team members being one of the most critical resourcesinthe business which maximize the effectiveness of the Organization. Human resources buildthe Enterprise and the sense of belonging would inculcate the spirit of dedication andloyalty amongst them towards strengthening the Company's Polices and Systems. The Companymaintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.
33. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensuresafety of all concerned compliances of environmental regulations and preservationof natural resources.
34. ENHANCING SHAREHOLDERSVALUE our Company believes that its Members are among itsmost important stakeholders. Accordingly your Company's operations are committed to thepursuit of achieving high levels of operating performance and cost competitivenessconsolidating and building for growth enhancingthe productive asset and resource base andnurturing overall corporate reputation. Your Company is also committed to creating valuefor its other stakeholders by ensuring that its corporate actions positively impact thesocio-economic and environmental dimensions and contribute to sustainable growth anddevelopment.
35. GREEN INITIATIVES
Electronic copies of the Annual Report 2016- 17and Notice of the 31st Annual GeneralMeeting are sent to all members whose email addresses are registered with the Company/Depository participant(s). For members who have not registered their email addressesphysical copies of the Annual Report 2016- 17 and Notice of the 31st Annual GeneralMeeting under Section101 of the Companies Act 2013 are sent in the permitted mode.Members requiring physical copies can send a request to the Company.
Your Company provides e-voting facility to all its members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice. This is pursuant to theSection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministration) Amendment Rules 2015.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partnersfor the excellent supportreceivedfrom them during the year.The Directors place on record their sincereappreciationto all employees of the Company for their unstinted commitment and continued contributionto the Company.
37. CAUTIONARY STATEMENT
Statements in the Board's Report describing the Company's objectives expectationsorforecasts may beforward-looking within the meaning of applicable securities laws andregulations.Actual results may differ materially from those expressedin the statement.Important factorsthat could influence the Company's operations include global and domesticdemand and supply conditions affecting selling prices of finished goods inputavailability and prices changes in government regulations tax laws economicdevelopments within the country and oiher factors such as litigation and industrialrelations.
For and on behalf of the Board of Directors
|Place: Mumbai ||Manish Banthia ||Girira j Dammani |
|Date: 30th May 2017 ||Whole - Time Director ||Managing Director |