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Libord Finance Ltd.
|BSE: 511593||Sector: Financials|
|NSE: N.A.||ISIN Code: INE212B01011|
|BSE 00:00 | 20 Feb||Libord Finance Ltd|
|NSE 05:30 | 01 Jan||Libord Finance Ltd|
Libord Finance Ltd. (LIBORDFIN) - Director Report
Company director report
Libord Finance Limited
Your Directors have pleasure in presenting the 25h Annual Report along withthe Audited Accounts of the Company for the year ended 31st March 2019.
1. FINANCIAL PERFORMANCE
A. A summary of the standalone & consolidated financial performance of your Companyfor the financial year ended 31.3.2019 is as under
(Rs. in Lacs)
2. REVIEW OF OPERATIONS
(a) Standalone Results
The income from operation on standalone basis during the year was Rs. 116.47 Lakhs(Previous Year Rs. 149.07 Lakhs). The Company's turnover has decreased by about 21.86% onstandalone basis due to less favourable business conditions this financial year. The grossprofits before taxes have decreased from Rs. 66.18 to Rs. 9.62 lakhs due to decreasedscale of operations.
(b) Consolidated Results
This fiscal your Company has achieved a turnover of Rs.120.34 Lakhs (Previous Year Rs.160.28 Lakhs) which has decreased by 24.91% on consolidation basis. The gross profits havedecreased from Rs. 66.44 lakhs to Rs. 10.82 lakhs on consolidated basis due to decreasedscale of operations and discontinuance of subsidiary company.
3. OUTLOOK & PROSPECTS
The Economic Survey 2019 has given a vision of transforming India into a 5trillion-dollar economy by the year 2024-25 for which India needs to sustain a real GDPgrowth rate of 8%. A series of major reforms have been undertaken over the past few years.The Survey makes the case for investment as that key driver. Key ingredients include afocus on policies that nourish MSMEs to create more jobs and become more productivereduce the cost of capital and rationalize the risk-return trade-off for investments.Today India has become the sixth largest economy in the world. According to World EconomicOutlook 2019 released by the IMF Indian economy grew at 7.5% rate of growth against theglobal growth rate at 3.6% and China at 6.9% keeping the fastest growing economy tag.There are other positive indications such as the inflation consistently remaining withinthe comfort zone current account deficit in manageable limits and foreign exchangereserves rising to all-time highs.
The investment-led growth model implies a rapid expansion in the financial system by afactor of magnitude - both banks and capital markets. Stability in various economicpolicies and reduction in the cost of capital over a period of time could be the gamechangers for the Indian economy. The improvement in the asset quality of banks over thelast financial year is expected to help bring the capex cycle back on track but concernsremain on sluggish credit growth. As per the survey the pace of credit growth hasmoderated in the last few months easing to 11.9 percent in April 2019 from 13.8 percent inNovember 2018. However "There are signs of continuing resolution of stressed assetsin the banking sector as reflected in decline in NPA to gross advances ratio as onDecember 2018 which should push the capex cycle" pointed out the Economic Survey.Data from the survey showed the stressed advances ratio decreased from 12.1 percent inMarch 2018 to 10.5 percent in December 2018. Banks' gross non-performing assets (NPA)ratio also fell from 11.5 percent to 10.1 percent in the same period. The Reserve Bank ofIndia (RBI) slashed its key policy rate by 75 basis points in three consecutive rate cutssince February 2019 to support growth. This coupled with the shift to an accommodativestance in the monetary policy should help in decreasing real lending rates. Bettertransmission of monetary policy would also help the survey added.
After strong growth in 2017 and early 2018 global economic activity slowed notably inthe second half of last year reflecting a confluence of factors affecting majoreconomies. According to World Economic Outlook released by the IMF global growth is nowprojected to slow from 3.6 percent in 2018 to 3.3 percent in 2019 before returning to 3.6percent in 2020. Beyond 2020 global growth is set to plateau at about 3.6 percent overthe medium term sustained by the increase in the relative size of
economies such as those of China and India which are projected to have robust growthby comparison to slower-growing advanced and emerging market economies.
Thus we see a much-improved positive outlook for the Indian economy in the nearfuture. However the stagnancy in the global growth rate rising trade tensions acrossmajor economies of the World and uncertainties of monsoon back home will continue to posechallenges to the Indian economy.
4. SHARE CAPITAL
During the year there was an increase in the paid-up equity capital of the Company onaccount of the allotment of 1650000 Equity Shares to promoter group and non-promoters inpursuance to conversion of 1650000 warrants issued on preferential basis. As a resultthe paid-up capital of the Company increased from Rs. 1200 Lakhs comprising of 120 lakhshares of Rs. 10 each as on March 312018 to Rs. 1365 Lakhs comprising of 136.5 lakhshares of Rs. 10 each as on March 312019. The Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity.
In order to conserve the resources of the Company your directors do not recommend anydividend for the current year. A sum of Rs. 9.10 lakhs have been transferred to the Profit& Loss account under Reserves & Surplus.
6. FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
7. MAINTENANCE OF COST RECORDS
The Maintenance of Cost Records pursuant to Section 148(1) of the Companies Act 2013is not required by the Company and accordingly such accounts and records are not made andmaintained by the Company.
8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size and nature ofits operations. During the year controls were tested and no material weakness in designand operation were observed. These have been designed to provide reasonable assurance withregard to recording and providing reliable financial and operational informationcomplying with applicable statutes safeguarding assets from unauthorised use executingtransactions with proper authorisation and ensuring compliance of corporate policies.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 Mr. Nawal Agrawal (DIN -01753155) Director of the Company will be retiring by rotation at the ensuing AnnualGeneral Meeting and is eligible for re-appointment. During the year Mr. Romil Choksey iscompleting his term as an Independent Director on 25.09.2019 and is not seekingreappointment. Mr. Raghvendra Raj Mehta (DIN:1947378) was appointed as an AdditionalDirector (Independent Director) of the Company on 26lh February 2019. TheBoard of Directors have recommended the appointment of Mr. Raghvendra Raj Mehta by themembers of the Company in the ensuing AGM of the Company as Independent Director for theterm of 5 Years.
During the year under review Ms. Namrata B. Shinde (ACS 57072) was appointed as theCompany Secretary and Compliance Officer w.e.f 30h March 2019. She resigneddue to personal reasons and was relieved w.e.f. 11h April 2019. Mr. LakhanDargad (ACS 52571) has been appointed as the Company Secretary and Compliance Officer on14.08.2019 joining w.e.f. 19.08.2019.
10. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year seven (7) meetings of the Board of Directors were held. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013 and applicable Secretarial Standards. Details about the Board meetings andcommittee meetings are given in report on Corporate Governance which forms part of thisReport.
11. DECLARATION GIVEN BY INDEPENDENT DIRECTORS
As per the requirement of Section 149 (7) of the Companies Act 2013 the IndependentDirectors have given their respective declarations that they meet the criteria ofindependence as specified under Section 149 (6) of the Act.
12. REMUNERATION POLICY
Based on the recommendation of the Nomination & Remuneration Committee the Boardof Directors have approved and adopted a Remuneration policy for Directors Key ManagerialPersonnel and other employees of the Company under Section 178 (3) of the Companies Act2013. The remuneration policy has been disclosed on the website of the Company www.libord.com at the link http://libord.com/Finance/InvestorRelations.aspx7Inv_ReLfc91
13. CODE OF CONDUCT
The Code of Conduct for the Board of Directors and the senior management has beenadopted by the Company. The Code of Conduct has been disclosed on the website of theCompany at http://libord.com/Finance/InvestorRelations.aspx7Inv_Rel_fc28
14. REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
Report on Corporate Governance for the financial year ended March 312019 along withthe certificate from the Auditors of the Company confirming the compliance withregulations of corporate governance under the Listing Regulations forms part of thisReport.
15. MANAGING DIRECTOR (MD) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATE
In terms of the Listing Regulations the certificate as prescribed in Part B ofSchedule II of the said Regulations has been obtained from Dr. (Mrs.) Vandna DangiManaging Director and Mr. Nawal Agrawal Chief Financial Officer for the financial year2018-19 with regard to the financial statements and other matters. The said certificateforms part of the report on Corporate Governance.
16. BOARD COMMITTEES
The Company is not required to constitute the Risk Management Committee pursuant to theprovisions of Regulation 21 of Listing Regulations. Details of all the followingCommittees constituted by the Board along with their composition terms of reference andmeetings held during the year are provided in the Report on Corporate Governance whichforms part of this Report: 1. Audit Committee 2. Stakeholders' Relationship Committee 3.Nomination and Remuneration Committee.
17. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES
During the year 2018-19 M/s Libord Commodities Brokers Private Limited (LCBPL) ceasedto be a subsidiary of the Company with effect from 13.02.2019. As at 31.03.2019 it isneither an associate nor a subsidiary of your Company. Your Company has 19.68% of equityholding in LCBPL. The net profit after tax of LCBPL as at 13.02.2019 was Rs. 88410/- whichhas been adjusted against the Discontinued subsidiary account. As LCBPL is no longer asubsidiary company as at 31.03.2019 its assets and liabilities are not consolidatedaccordingly.
Libord Brokerage Private Limited (Formerly Libord Stock Brokers Private Limited) is anassociate company of your company. Your Company has 39.96% of the equity holding in theAssociate Company LBPL. LBPL is registered as a stock broker under the SEBI Act and is anapproved member of the BSE NSE MCX and NCDEX and a member of CDSL duly approved by SEBI.The Company is also a member of AMFI Comris and CCRL-RP. The net profit after tax of LBPLis Rs 121332/- for the year ended March 312019. A minority interest of Rs. 48486/- hasbeen considered in consolidation. (Refer Annexure III for Form AOC 1)
M/s Libord Advisors Private Ltd (LAPL) is an Associate Company of your Company. YourCompany has 46.29% of the equity holding in the Associate Company LAPL. LAPL is a SEBIregistered Category 1 Merchant Banker w.e.f. 18.10.2013. The net profit after tax of LAPLis Rs. 513329/- for the year ended as at 31.3.2019. A minority interest of Rs. 237631/-has been considered in consolidation. (Refer Annexure III for Form AOC 1)
18. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to report to the Management instancesof unethical behaviour actual or suspected fraud or violation of the Company's code ofconduct or ethics policy. Under this policy the employees can approach the Company'sCompliance Officer and/or Chairman of the Audit Committee. Whistle Blower Policy ensuresthat strict confidentiality is maintained whilst dealing with concerns and also that nodiscrimination be meted out to any person for a genuinely raised concern. The WhistleBlower Policy of the Company is also posted on the website of the Company. Details ofVigil Mechanism/Whistle Blower are also included in the report on Corporate Governance.During the financial year 2018-19 no cases under this mechanism were reported to theCompany and/or to any of its subsidiaries/associate.
19. 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 of Fair Disclosure Internal Procedures and Conduct forRegulating Monitoring and Reporting of Trading by Insiders" has been adopted and hasbeen disclosed on the website of the Company at www.libord.com.
The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed.
20. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The provisions of Section 135 of the Companies Act 2013 are not presently applicableto the Company.
21. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3c) & (5) of the Companies Act2013 with respect to Directors' Responsibility Statement it is hereby confirmed:
(i) That in the preparation of the accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the year under review.
(iii) That the Directors have taken proper and sufficient care of the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) That the Directors have prepared the accounts for the financial year ended 31stMarch 2019 on a going concern basis.
(v) That the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively
22. BUSINESS RISK MANAGEMENT
Pursuant to Section 134 (3) (n) of the Companies Act 2013 the Company has undertakensuitable measures for the development and implementation of a risk management policy forthe Company including identification of elements of risk if any which in the opinion ofthe board may threaten the existence of the Company. At present the Company has notidentified any element of risk which may threaten the existence of the Company.
23. PARTICULARS OF MATERIAL ORDERS
During the year under review neither any Regulator nor any Court or Tribunal haspassed any significant and material order impacting the going concern status and theCompany's operations in the future.
24. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were 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.
25. BOARD EVALUATION
The performance of Board of Directors and the Committees constituted by the Board andthe individual Directors has been evaluated during the Financial Year ended 31.3.2019.
26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There are no contracts or arrangements with related parties as which are not at arms'length during the year. Hence Form AOC-2 pursuant to the provisions of Section 134(3)(h)of the Companies Act 2013 and rule 8(2) of the Companies (Accounts) Rules 2014 is notapplicable and does not form part of this report accordingly.
27. PURCHASE OF SHARES OF THE COMPANY
The Company does not give any loan guarantee or security or any financial assistanceto the employees of the Company for the purpose of purchase or subscription for any sharesof the Company pursuant to Section 67 (2) of the Companies Act 2013.
28. EXTRACT OF ANNUAL RETURN
Pursuant to provisions of Section 92(3) of the Companies Act 2013 and Rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of the Annual Returnin Form MGT-9 is annexed to this Report and forms part of this Report. (Please referAnnexure - I: Extract of Annual Return)
29. AUDIT COMMITTEE
a) Terms of Reference
To oversee interalia the Company's financial reporting process and disclosure of itsfinancial information to recommend the appointment of Statutory Auditors and fixation ofthe audit fees to review and discuss with the Auditors about internal control systemsscope of audit including observations of the auditors on adequacy of internal controlsystems major accounting policies & practices adopting accounting standards andcomplying various requirements concerning financial statements if any to review theCompany's quarterly half yearly and annual financial statements before submission to theBoard of Directors.
b) Composition of Audit Committee
The Audit Committee comprises of three directors with Independent Directors forming themajority. Mr. Romil Choksey is the Chairman of the Audit Committee. Mr. Radhey Syam Soniand Mr. Lalit Kumar Dangi are the other two members of the Audit Committee. The memberspossess adequate knowledge of accounts audit and finance among others. The compositionof the Audit Committee meets the requirement as per Section 177 of the Companies Act2013. There are no recommendations of the Audit Committee which have not been accepted bythe Board. During the year four Audit Committee meetings were held on 29.05.201807.08.2018 29.10.2018 and 13.02.2019.
30. SECRETARIAL AUDIT REPORT
M/s Kamlesh Jain & Associates Company Secretaries were appointed as SecretarialAuditors to conduct the Secretarial Audit of the Company for the financial year 2018-19.Pursuant to Section 204 (1) of the Companies Act 2013 the Secretarial Audit Reportsubmitted by the Secretarial Auditors for the year ended 31s1 March 2019 isannexed to the Annual Report and forms part of the Annual Report (Annexure-II). Theobservations made in the Auditors' Report read together with relevant notes thereon areself-explanatory and hence do not call for any further comments under Section 134 (3) ofthe Companies Act 2013.
At the 22nd Annual General Meeting Members had re-appointed M/s. Amar Bafna& Associates Chartered Accountants Mumbai (FRN: 114854W) as Statutory Auditors for aconsecutive term of three years. Their term expires on the conclusion of this 25hAGM. Therefore the members are required to make an appointment of Statutory Auditors inthis AGM for the next term. M/s Mehta Singhvi & Associates Chartered AccountantsMumbai (FRN: 122217W) have furnished a certificate confirming that if appointed theirappointment will be in accordance with Section 139 read with Section 141 of the CompaniesAct 2013. The Members are requested to consider their appointment as Statutory Auditorsof the Company for a term of five years i.e. from the conclusion of this 25lhAGM till the conclusion of the 30lh AGM of the company to be held in thecalendar year 2024 on the same terms and conditions on which the previous auditors wereappointed. The Auditors' Report to the shareholders for the year under review does notcontain any qualification.
32. CERTIFICATION AND RECOGNITION
Libord Brokerage Private Limited (Formerly Libord Stock Brokers Private Limited) anAssociate Company of Libord Finance Limited) has been a member in the BSE NSE MCX andNCDEX across all Market Segments and a member of AMFI Comris and CCRL-RP. During the yearthe company started its operations as a Depository Participant of CDSL duly approved bySEBI.
33. PARTICULARS OF LOANS GUARANTEES AND INVESTMENT
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by Company isgiven in the notes to the financial statements.
34. STATEMENT PURSUANT TO LISTING AGREEMENT
The Company's Equity Shares are listed at BSE Ltd. Mumbai. The Listing Fee for theYear under review has been paid to the BSE Ltd timely.
The information required to be disclosed in the Directors' Report pursuant to Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rule 2014 is set out as an Annexure to the ReportRefer Annexure-III.
36. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) CONSERVATION OF ENERGY
(B) TECHNOLOGY ABSORPTION
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Directors place on record their appreciation for the valuable contribution made bythe staff members of the Company and their appreciation for the active support given byBanks Investors Shareholders Employees and Customers.