TO THE MEMBERS OF
THE FIRST CUSTODIAN FUND (INDIA) LIMITED
The Directors take pleasure in presenting the Thirty Third Annual Report together withthe Audited Financial Statements for the year ended 31st March 2019.
1. FINANCIAL RESULTS
Key highlights of the financial results for The First Custodian Fund (India) Limitedfor the financial year 2018 19 is tabulated below:
| || ||(Rs. in Lacs) |
|PARTICULARS ||Year Ended ||Year Ended |
| ||31/03/2019 ||31/03/2018 |
|Gross Income ||81.73 ||105.05 |
|Total Expenditure ||36.69 ||33.22 |
|Interest Expenses ||3.99 ||2.44 |
|Gross Profit ||41.05 ||69.39 |
|Depreciation ||8.69 ||5.41 |
|Profit / (Loss) Before Tax ||32.36 ||63.98 |
|Less : Income Tax ||7.50 ||8.50 |
|Less /Add : Deferred Tax ||1.91 ||1.58 |
|Less : Income Tax Paid W/ Off ||0.04 ||0.04 |
|Net Profit / (Loss) After Tax ||22.91 ||53.94 |
|Add : Profit brought forward from previous year ||855.85 ||801.91 |
|APPROPRIATIONS ||0.00 ||0.00 |
|Profit Carried Forward to Balance Sheet ||878.76 ||855.85 |
2. HIGHLIGHTS OF PERFORMANCE
Total income for the financial year 2018 19 decreased by 22.20% to Rs. 81.73Lacs as compared to Rs. 105.05 Lacs in the previous financial year 2017 18.
Total Profit before Tax for the financial year 2018 19 is Rs. 32.36 Lacs ascompared to profit of Rs. 63.98 Lacs in the previous financial year 2017 18.
3. TRANSFER TO RESERVES
The Board of Directors has not recommended transfer of any amount to reserves.
With a view to deploy the profits into the existing operations of your Company Boardof Directors has not recommended any dividend for the year.
5. BUSINESS OPERATIONS
Your Company is a member of National Stock Exchange (NSE) registered as Stock Brokerand carrying on the business in brokerage in shares. Your Company is an investor in sharesand also trades in futures & options. There was no change in nature of business ofyour Company during the year under review.
6. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT 2013
No material changes and commitments which could affect your Company's financialposition have occurred between the end of the financial year of your Company and date ofthis report.
7. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2019 was Rs.15000000/-. During the year under review your Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity. There was no changein your Company's share capital during the year under review. The Promoter and PromoterGroup are holding 788571 shares equivalent to 52.57% of the total Issued and Paid-upShare Capital.
8.1 Retirement by Rotation
Pursuant to Section 152(6) of the Companies Act 2013 and in terms of the Articles ofAssociation of your Company Mr. Surendra Banthia Director retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.
8.2 Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of your Companypursuant to Section 2(51) and Section 203 of the Act read with Rule 8(5)(iii) of theCompanies (Accounts) Rules 2014 framed 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.
8.3 Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year your Company has held 4 (four) Board Meetings which were held on 30thMay 2018; 14th August 2018; 13th November 2018 and 13thFebruary 2019. The Board Meetings has been held during the year in such a manner that notmore than 120 days shall intervene between two consecutive meetings of the board asprescribed under Section 173 of the Companies Act 2013. As per Section 167(1)(b) all thedirectors have attended atleast one Board Meeting held during the financial year.
9. 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 Managerial Personnel) Rules2014.
10. 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 Annual Financial Statements for the year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Note 1 to the Financial Statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof your Company as at 31st March 2019 and of the profit of your Company forthe year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of your 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.
11. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Company maintains an adequate and effective Internal Control System commensuratewith its size and complexity. We believe that these internal control systems provideamong other things a reasonable assurance that transactions are executed with Managementauthorization and that they are recorded in all material respects to permit preparation offinancial statements in conformity with established accounting principles and that theassets of your Company are adequately safe-guarded against significant misuse or loss.
An independent Internal Audit function is an important element of your Company'sinternal control system. The internal control system is supplemented through an extensiveinternal audit programme and periodic review by Management.
Your Company has in place adequate Internal Financial Controls with reference toFinancial Statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
12. SUBSIDIARY COMPANIES
Your Company has no Subsidiary Company.
13. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES ORASSOCIATE COMPANIES
There are no companies which have become or ceased to be its Subsidiaries JointVenture or Associate Companies during the financial year 2018 19.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
15. RELATED PARTY TRANSACTIONS
During the year your company has not entered into any related party transactions exceptpayment of remuneration and sitting fees to the directors.
16. 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 your Company.
17. 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
Your Company is not engaged in any manufacturing activity. Your Company is in serviceindustry. Hence your Company has not taken any energy conservation measures. There are noadditional investments and proposals for reduction of consumption of energy. Your 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. In Millions) |
|Foreign Exchange Earned ||Nil |
|Foreign Exchange Outgo ||Nil |
18. BUSINESS RISK MANAGEMENT
The nature of business is investment arbitrage and trading in shares. The inheritantrisks to the business of your 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. Your Company has notformed Risk Management Committee since it is not applicable under Regulation 21 of theSEBI (LODR) Regulations 2015.
19. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The provision of regulations of the SEBI (LODR) Regulations 2015 regarding VigilMechanism and Whistle Blower Policy is not applicable to your Company.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of your Company and its future operations.
21.1 Statutory Auditors
Your Company's Auditors M/s. Vivek Khandor & Associates Chartered Accountants whoretire at the forthcoming Annual General Meeting of your Company are eligible forre-appointment. They have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules framed thereunder for re-appointment as Auditors of your Company.As required under Regulation 33 of SEBI (LODR) Regulations 2015 the Auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
21.2 Statutory Auditors' Observations
The Report given by the Auditors on the financial statements of your Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
21.3 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 your Company hasappointed M/s. P. P. Shah & Co. Practicing Company Secretaries to undertake theSecretarial Audit of your Company. The Report of the Secretarial Audit Report is annexedherewith as Annexure A.
21.4 Qualifications in Secretarial Audit 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 Company Secretary& Chief Financial Officer consequently the Annual Audited Financial Statements forthe financial year ended 31st March 2018 were not signed by Company Secretary& Chief Financial Officer. In this regard the management of the Company has providedthe following reply:
(i) The Company has appointed Mr. Chandrakant Pandey as Compliance Officer of theCompany who looks after the compliance of the Companies Act 2013 and the SEBI Act andrules made there 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) The Volume and Scope of work for the Company Secretary and Chief FinancialOfficer are less and it is not a full time work and the job of Company Secretary and ChiefFinancial Officer are not attractive commensurate with the scope of work and salary.
B. Constitution of Audit Committee & Nomination and Remuneration Committee:
As per Section 177 and 178 of the Act the Company is required to constitute AuditCommittee & Nomination and Remuneration Committee. The Company has not constitutedAudit Committee & 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 138 of the Act the Company is required to appoint Internal Auditor. TheCompany has not appointed Internal Auditor. In this regard the management of the Companyhas provided the following reply:
(i) The size of operation of the Company is very small accordingly it is not viableto appoint 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 some ofthe information / policies on the website of the Company. In this regard the management ofthe Company has provided the following reply:
(i) The Company is filing regularly all the information with BSE and all theinformation is available on the website of BSE.
E. 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 149 of 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 management ofthe 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.
22. COMPLIANCE OF SECRETARIAL STANDARDS
During the year under review your Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
23. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure B.
24. HUMAN RESOURCES
The relations of the employees of your Company have been cordial during the year.Employees are considered to be team members being one of the most critical resources inthe 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 your Company's Polices and Systems. YourCompany maintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.
25. ENVIRONMENT AND SAFETY
Your Company is conscious of the importance of environmentally clean and safeoperations. Your Company's policy requires conduct of operations in such a manner so asto ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.
26. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
27. GREEN INITIATIVES
Electronic copies of the Annual Report 2018 19 and Notice of the 33rd AnnualGeneral Meeting are sent to all members whose email addresses are registered with yourCompany / Depository participant(s). For members who have not registered their emailaddresses physical copies of the Annual Report 2018 19 and Notice of the 33rdAnnual General Meeting under Section 101 of the Companies Act 2013 are sent in thepermitted mode. Members requiring physical copies can send a request to your 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.
28. MANAGEMENT DISCUSSION AND ANALYSIS
Your Company is an investor in shares and also trades in futures & options. Thesize of operation of your Company is very small. Accordingly it is not viable to providereport on Management Discussion and Analysis. Hence your Company has decided not toprovide Management Discussion and Analysis Report for the financial year ended 31stMarch 2019.
29. CORPORATE GOVERNANCE
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 at alater date such company shall comply with the requirements of Regulation 27 within sixmonths from the date on which the provisions became applicable to the company.
b. Companies whose equity share capital is listed exclusively on the SME and SME-ITPPlatforms.
The Paid-up Share Capital of your Company is Rs. 1.5 Crores as on 31stMarch 2019. The Reserve and Surplus is Rs. 9.15 Crores. Accordingly the Paid-up Capitaland Net Worth is below the prescribed limit for mandatory applicability of CorporateGovernance clause as per Regulation 15(2)(a) of the SEBI (LODR) Regulations 2015. YourCompany has decided not to opt for compliance of Regulation 27 for the time being. Theletter for the same has been filed with BSE on 03rd June 2019.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Company firmly believes in providing a safe supportive and friendly workplaceenvironment a workplace where our values come to life through the supporting behaviours.Positive workplace environment and a great employee experience are integral part of ourculture. Your Company believes in providing and ensuring a workplace free fromdiscrimination and harassment based on gender.
Your Company educates its employees as to what may constitute sexual harassment and inthe event of any occurrence of an incident constituting sexual harassment your Companyprovides the mechanism to seek recourse and redressal to the concerned individualsubjected to sexual harassment.
Your Company has a Sexual Harassment Prevention and Grievance Handling Policy in placeto provide clarity around the process to raise such a grievance and how the grievance willbe investigated and resolved. An Internal Complaints Committee has been constituted inline with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
No complaint has been raised during the year ended 31st March 2019.
31. INDIAN ACCOUNTING STANDARDS (IND-AS)
Your Company has followed the relevant Accounting Standards notified by the Companies(Indian Accounting Standards) Rules 2015 while preparing financial statements.
32. CAPITAL EXPENDITURE
There was no Capital Expenditure during the financial year.
Your 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. Hence the requirement for furnishing details of deposits which arenot in compliance with the Chapter V of the Act is not applicable.
34. PLEDGE OF SHARES
None of the equity shares of the Directors of your Company are pledged with any banksor financial institutions.
35. INFORMATION SYSTEM
In a business where information is critical Information Technology plays a vital rolefacilitating informed decision making to grow the business. Over the years your Companyhas invested extensively in infrastructure people and processes with the objective tocapture protect and transmit information with speed and accuracy.
36. LISTING WITH STOCK EXCHANGES
Your Company is listed with BSE Limited and your Company has duly paid the listing feesto the Exchange.
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 your Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of your Company for their unstinted commitment and continuedcontribution to your Company.
38. CAUTIONARY STATEMENT
Statements in the Board's Report describing your Company's objectives expectations orforecasts may be forward-looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.Important factors that could influence your Company's operations include global anddomestic demand and supply conditions affecting selling prices of finished goods inputavailability and prices changes in government regulations tax laws economicdevelopments within the country and other factors such as litigation and industrialrelations.
| ||By order of the Board || |
| ||For and on behalf of the Board of Directors || |
| ||Manish Banthia ||Giriraj Dammani |
| ||Whole Time Director ||Managing Director |
|Place: Mumbai || || |
|Date: 30th May 2018 || || |