Latent Light Finance Limited
(Formerly Known as Galaxy Commercial Limited)
Your directors have pleasure in presenting their 34th Annual Report together with theAudited Statement of Accounts for the year ended on 31st March 2019.
1. FINANCIAL RESULTS
(Amount in Rupees)
|Particulars ||For the financial year ||For the financial year |
| ||2018-19 ||2018-19 |
|Gross Total Income ||15947088 ||12933844 |
|Less: Total Expenditures ||5992274 ||6701903 |
|Net Profit before tax ||9954814 ||6231941 |
|Less: Tax Expenses || || |
|- Income Tax-Current ||2672527 ||1166755 |
|- Income Tax- Earlier Year ||0 ||9944 |
|- Deferred Tax ||243446 ||(20164) |
|- MAT Credit Availed ||147629 ||(54310) |
|Profit after tax ||6891212 ||5129716 |
|Provision for transfer to Special Reserve Fund ||1378242 ||1025943 |
In order to comply with the provisions of Reserve Bank of India Act 1934 the Companyhas transferred Rs. 1378242 (Thirteen Lakh Seventy Eight thousand Two Hundred and FortyTwo only) to Special Reserve Funds and has also made provision of Rs. 25144- ( RupeesTwenty Five thousand oen hundred and forty four Only) for Standard Assets during the yearunder review.
Except as mentioned above no amount was proposed to transfer to any reserve by theCompany during the year under review.
2. OPERATIONS OF THE COMPANY
During the year under review the Company was engaged in carrying on the business asNon Banking Financial Company without accepting public deposit for which the Certificateof Registration has been obtained from the Department of Non-Banking Supervision ReserveBank of India New Delhi. The Company has provided / taken inter-corporate loans inordinary course of business and on arm length basis. Your directors also intend todiversify its operation into another area / business in order to make the Company moreprofitable.
3. PERFORMANCE REVIEW
During the year under review the Company's total turnover is Rs. 15947088/- (RupeesOne Crore Fifity Nine Lakhs Forty seven Thousand and Eighty Eight only) as compared to Rs.12933844/- (Rupees One Crore Twenty Nine Lakhs thirty three Thousand Eight Hundred andForty Four only) in the previous year and the Company earned a profit after tax of Rs.6891212 (Sixrt Eight Lakh Ninety one thousand Two hundred and Twelve Only) as comparedto Rs. 5129716 (Fifty One Lakh Twenty nine thousand seven hundred and sixteen Only) inthe previous year
Your directors do not recommend any dividend for payment to the shareholders/ membersof the Company for the financial year ended on 31st March 2019.
5. DIRECTORS AND KMP OF THE COMPANY
Pursuant to the provisions of section 149 of the Act Mr. Virendra Singh Chowhan andMs. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted adeclaration that each of them meets the criteria of independence as provided in section149(6) of the Act and there has been no change in the circumstances which may affect theirstatus as independent director during the year.
During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than the sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
Mr. Dharmender Singhal Director of the Company retires by rotation and being eligiblehas offered himself for re-appointment. Your Directors recommend his re-appointment asdirector of the Company.
As required under regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the information on the particulars of the Directorsproposed for appointment / reappointment has been given in the Notice of the AnnualGeneral Meeting.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an evaluation of itsown performance the directors individually as well as the evaluation of the working ofits Audit Committee Nomination and Remuneration Committee..
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of directors senior management and to fixtheir remuneration.
6. KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are - Mr. Dharmender Singhal Chief Financial Officer Mr. Kapil SinghalChief Executive Officer and Mr. Yash Gupta Company Secretary of the Company.
7. DECLARATION OF INDEPENDENCE:
Pursuant to the provisions of section 149 of the Act Mr. Virendra Singh Chowhan andMs. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted adeclaration that each of them meets the criteria of independence as provided in section149(6) of the Act and there has been no change in the circumstances which may affect theirstatus as independent director during the year. . Further none of the directors of yourCompany are disqualified under the provisions of Section 164 (2) (a) & (b) of theCompanies Act 2013.
During the year under review the Independent Directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
As required under regulation 36(3) of SEBI (LODR) Regulations 2015 the information onthe particulars of the Directors proposed for appointment / re- appointment has been givenin the Notice of the Annual General Meeting.
8. RETIREMENT BY ROTATION OF THE DIRECTORS
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Dharmender Singhal Non-Executive Director of the Companyis liable to retire by rotation at the ensuing Annual General Meeting and has tendered hisunwillingness to be re-appointed as the director of the Company and therefore shall retireat the ensuing Annual General Meeting. The matter has been placed for noting by members atthe ensuing Annual General Meeting details of which are given in the Notice of AnnualGeneral Meeting.
During the year under review Seven (7) Board Meetings were convened and held. Theintervening gap between the Board meetings was within the period prescribed under theCompanies Act 2013.
10. COMMITTEES OF THE BOARD
Currently the Company has Two Committees as indicated below:
i) Audit Committee; ii) Nomination and Remuneration Committee;
11. DEMATERIALISATION OF SHARES
The Company has connectivity with NSDL & CDSL for dematerialization of its equityshares. The ISIN No. INE515K01018 has been allotted for the Company. Therefore theinvestors may keep their shareholding in the electronic mode with their DepositoryParticipates.
As on 31st March 2019 only 78% (Approx) of the Company's paid up EquityShare Capital is in dematerialized form and balance 22 % (Approx) is in physical form. TheCompany's Registrars & Transfer Agent is M/s Indus Portfolio Private Limited havingtheir communication office at G-65 Bali Nagar New Delhi-110015.
12. NOMINATION AND REMUNERATION POLICY
The Company has devised a policy on Nomination Remuneration and Board Diversityincluding criteria for determining qualifications positive attributes independence of adirector and other matters specified under the provisions of Section 178 of the CompaniesAct 2013. The Policy also includes the criteria for nomination appointment and removalof Directors Key Managerial Personnels (KMPs) and Senior Management and to fix theirremuneration. No change in the policy since the last financial year.
13. AUDIT COMMITTEE
During the year all the recommendations of the Audit Committee were accepted by theBoard. The composition of the Audit Committee is given in the General Information aboutthe company which forms part of the Annual Report.
14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under regulation 34 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report is enclosedas a part of this report.
15. DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the Financial Statement for the financial year ended on 31stMarch 2019 and state:
i) That in the preparation of Annual Accounts for the financial year ended as at 31stMarch 2019 the applicable Accounting Standards have been followed along with properexplanation relating to the material departures.
ii) That the Directors have selected such Accounting Policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the financial yearended as at 31st March 2019 and of the profit and loss of the Company for thefinancial year ended on 31st March 2019.
iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe Assets of the Company and for preventing and detecting fraud or other irregularities.
iv) That the Directors have prepared the Annual Accounts on a Going Concern basis.
v) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
vi) There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring financial year 2018-19.
16. PUBLIC DEPOSITS
The Company has not invited or accepted any public deposits within the meaning ofSection 73 of the Companies Act 2013 and the rules made thereunder and section 45-I(bb)of the Reserve Bank of India Act 1934 during the year under review. The Company does nothold any public deposit as on date and will not accept the same in future without theprior approval of Reserve Bank of India in writing.
17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company being a non-banking finance company registered with the Reserve Bank ofIndia and engaged in the business of giving loans or finance & investment activitiesis exempt from complying with the provisions of section 186 of the Companies Act 2013.Accordingly the disclosures of the loans given as required under the aforesaid sectionhave not been given in this Report.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of internal control geared towards achievingefficiency in its operations safeguarding assets optimum utilization of resources andcompliance with statutory regulations. The Company has an Internal Control Systemcommensurate with the size scale and complexity of its operations. Testing of suchInternal Control measures and systems forms a part of Internal Audit function. TheInternal Auditors of the Company conduct audits of various departments based on an annualaudit plan covering key areas of operations. Internal Audit reviews and evaluates theadequacy and effectiveness of internal controls ensuring adherence to operatingguidelines and systems and recommending improvements for strengthening them. To maintainits objectivity and independence the Internal Audit function reports to the Chairman ofthe Audit Committee of the Board. The Audit Committee of the Board of Directors reviewsthe adequacy of internal controls. This has improved the management of the affairs of theCompany and strengthened transparency and accountability. The Management ensures adherenceto all internal control policies and procedures as well as compliance with regulatoryguidelines. No significant audit observations and recommendations have been received fromthe Internal Auditors of the Company.
19. SECRETARIAL AUDIT REPORT
The Company has at its meeting held on 14th August 2018. appointed M/sNaveen Garg & Associates a firm of Company Secretaries in practice to undertakethe Secretarial Audit of the Company for the financial year 2018-19 in terms of provisionsof section 204 of the Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. Report of the Secretarial Auditor forthe Financial ended 31st March 2019 is attached as an annexure as Annexure"A" which forms part of this report.
Further the statutory auditors' report and secretarial auditors' report does notcontain any qualifications reservations or adverse remarks.
a) STATUTORY AUDITORS:
Therefore pursuant to Section 139 142 and other applicable provisions of theCompanies Act 2013 and the Rules made thereunder M/s Divyank Khullar &Associates Chartered Accountants New Delhi (Firm Regn. No.:- 025755N) was beappointed as Statutory Auditors of the Company in the 32nd AGM held in year2017 From the date of conclusion of the 32nd AGM of the Company till the dateof conclusion of 37th Annual General Meeting to be held for the financial yearending on 31st March 2022.
As amendment notified under Section 40 of Companies Amendment Act 2017 correspondenceto Section 139 of Companies Act 2013 now the requirement related to annual ratificationof appointment of auditors by members is omitted so ratification of auditor in AnnualGeneral Meeting not required. Your Company has not received any unwillingness to Continueas auditor so M/s Divyank Khullar & Associates will continue as auditor.
b) SECRETARIAL AUDITORS:
Pursuant to the provisions of section 204 of the Companies Act 2013 read with rule theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas at its meeting held on 14th August 2019 appointed M/s Naveen Garg& Associates a firm of Company Secretaries in practice to undertake theSecretarial Audit of the Company for the financial year 2019-20.
c) INTERNAL AUDITOR:
The Board of Directors has at its meeting held on 14th August 2019appointed M/s. Mr. Anand Singh & Co. Internal Auditor Chartered Accountants as theInternal Auditor to undertake Internal Audit of the Company for Financial Year 2019-20 interms of provisions of section 138 of the Companies Act 2013
21. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure B".
22. RELATED PARTY TRANSACTIONS
During the year under review the main business of the company is financing &investment in shares and granting inter-corporate loans. All related party transactionsentered into with related parties were placed before the Audit Committee for theirapproval at commencement of the financial year. The audit committee decided that suchtransactions are in the ordinary course of business and are on arm's length basis. None ofthe transactions with related parties fall under the scope of section 188(1) of theCompanies Act 2013. Even though the provisions of Companies Act 2013 read with rulesmade thereunder regarding related party transactions are not attracted to suchtransactions as these are in ordinary course of business and on an arm's length basis butsome transactions were material related party transaction by virtue of SEBI (LODR)Regulations 2015. All related party transactions so entered are disclosed in FinancialStatement of the Company as attached herewith. Given that the company does not haveanything to report pursuant to Section 134 (3)(h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 in Form AOC-2 therefore the same is notprovided.
The details of the transactions with related parties during the financial year 2018-19are provided in the accompanying financial statements.
23. CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to themembers of the Board and all employees in the course of day to day business operations ofthe Company.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. All the Board Members and the Senior Management personnelhave confirmed compliance with the Code.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 readwith the rules made thereunder and pursuant to the provision of SEBI (Listing Obligationsand Disclosure Requirements) 2015 the Company has established a Vigil Mechanism to beknown as the Whistle Blower Policy' for its Directors and Employees to reportinstances of unethical behaviour actual or suspected fraud or violation of the Company'sCode of Conduct. The aim of the policy is to provide adequate safeguards againstvictimization of Whistle Blower who avails of the mechanism and also provide direct accessto the Chairman of the Audit Committee in appropriate or exceptional cases.
Accordingly Vigil Mechanism / Whistle Blower Policy have been formulated with a viewto provide a mechanism for the Directors and employees of the Company to approach theEthics Officer or the Chairman of the Audit Committee of the Company.
The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company.
During the financial year 2018-19 no such complaint of unethical or improper activityhas been received by the Company
25. RISK MANAGEMENT
The company operates in the Financial Services Sector which is affected by varietyfactors linked to economic development in India and globally which in turn also affectedglobal fund flows. Any economic event across the globe can have direct or indirect impacton your company. To mitigate this Company has diversified its revenue stream acrossmultiple verticals. Your Company's risk management system is a comprehensive andintegrated framework comprising structured reporting and stringent controls. Through itsapproach it strives to identify opportunities that enhance organizational values whilemanaging or mitigating risks that can adversely impact the company's future performance.Within the organization every decision taken is after weighing the pros and cons of sucha decision making taking note of the risk attributable.
The Board of Directors of the Company has framed and implemented a Risk Managementframework depicting the process for loan proposal approval loan management postdisbursement and day to day monitoring to manage credit risk. It sets out the standardshelpful in achieving a high-quality loan portfolio with optimal returns.
26. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the
Directors and the designated employees while in possession of unpublished pricesensitive information in relation to the Company and during the period when the tradingwindow is closed. The Board is responsible for implementation of the Code. All Board ofDirectors and the designated employees have confirmed compliance with the Code.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUTGO
During the year under review the provisions of Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are as follows:
Conservation of Energy
Your Company carries out its business in an environmental friendly manner and is on thelook-out for different ways and means to reduce the consumption of energy in its businessactivity.
Technology Absorption Adaption and Innovation
The Company continues to use the latest technologies for improving quality of itsservices. The Company's business does not require significant import of technology.
Foreign Exchange Earnings and Outgo
There was no foreign exchange earnings and outgo in the Company during the financialyear.
28. MATERIAL CHANGES AND COMMITMENTS IF ANY
There was no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report;
29. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of theCompanies Act 2013 to the Board of Directors during the year under review
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review provision of section 135 and Schedule VII of theCompanies Act 2013 pertaining to Corporate Social Responsibility are not applicable toour Company. Hence details of expenditures on CSR activities are not required to befurnished.
31. CREDIT RATING
There was no credit rating obtained from any agency during the period under review.
32. LISTING OF SECURITIES
Presently the Securities of the Company are listed on BSE Limited Mumbai. The listingfee for the financial year 2019-20 has been paid.
33. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION
AND REDRESSAL) ACT 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed-offduring the year 2018-19.
|No of complaints received ||0 |
|No of complaints disposed off ||N.A. |
Your directors would like to place their grateful appreciation for the assistance andco-operation received from the Company's bankers during the year under review. Thedirectors also acknowledge with appreciation the support and co-operation rendered byvarious Government Agencies and Departments. Your Directors would also wish to place onrecord their deep sense of appreciation for the continued support of all the investors ofthe Company.
| ||By order and on behalf of the Board |
| ||M/s Latent Light Finance Limited |
| ||Sd/- ||Sd/- |
|Place: New Delhi ||(Deepak Nagar) (Dharmender Singhal) |
|Date: 14th August 2019 ||Director ||Director |
| ||(DIN: 00043654) ||(DIN: 03257550) |