Your Directors have pleasure in presenting their Fifty-Seventh Annual Report on thebusiness and operations of the Company together with the Audited Financial Statements(Standalone as well as Consolidated) for the year ended March 31 2020.
1. KEY FINANCIAL HIGHLIGHTS
The Company has prepared the Financial Statements for the financial year ended March312020 in terms of Sections 129 133 and Schedule II to the Companies Act 2013 (asamended) (the "Act") read with the Companies (Indian Accounting Standards)Rules 2015 as amended:
(Amt. in Rupees)
|Particulars || |
| ||FY 2019-20 ||FY 2018-19 ||FY 2019-20 ||FY 2018-19 |
|Revenue from Operations ||32804932 ||35254158 ||683032916 ||540643647 |
|Other Income ||7741800 ||33857191 ||41972547 ||57701301 |
|Total Income ||40546732 ||69111349 ||725005463 ||598344948 |
|Less :Total Expenses ||24462099 ||15253988 ||594678457 ||491515745 |
|Profit before tax& Extraordinary items ||16084633 ||53857361 ||130327006 ||106829203 |
|Add : Extraordinary Items ||- ||16455406 ||- ||41628500 |
|Less : Tax Expenses ||2958193 ||12763080 ||23186837 ||33491100 |
|Profit after tax ||13126440 ||57549687 ||107140169 ||114966603 |
|Add: Other Comprehensive Income/(loss) ||(16389025) ||(5939417) ||(19408663) ||(5768783) |
|Total Comprehensive Income ||(3262586) ||51610270 ||87731506 ||109197820 |
|Profit available for appropriation || || || || |
|Balance of profit for earlier years ||345625432 ||305662850 ||576661078 ||492475610 |
|Add: Total Comprehensive Income ||(3262586) ||51610270 ||56624036 ||95693348 |
|Less: Profit available for appropriation ||412955 ||137750 ||520678 ||(2057) |
|Less Transfer to Statutory Reserve ||- ||11509937 ||2625288 ||11509937 |
|Balance C/f to Balance Sheet ||341949892 ||345625433 ||630139148 ||576661078 |
2. COMPANY OVERVIEW
RSD Finance Limited is a Company registered under the Companies Act 1956. It isregistered with the Reserve Bank of India (RBI) in the category of "Non-BankingFinancial Institution - Non Systemically Important Non Deposit taking Company(NBfC-ND-NSI) under the RBI Regulations and has a certificate under section 45 IA of theRBI Act 1934.
As part of our business activities we are predominantly focused in the business ofloans and advances acquisition of shares/ stocks/ bonds/ debentures/ securities issued byGovernment or local authority or other marketable securities of a like nature. We alsoprovide Job Work services.
3. BUSINESS PERFORMANCE REVIEW
The Indian Accounting Standards (IND-As) became applicable on the Company with effectfrom 1st April 2019. Pursuant to the same the last year's figures have been regroupedand rearranged.
During the financial year ended March 31 2020 the Company achieved a turnover of Rs.405.47 lakhs as compared to the turnover of Rs. 691.11 lakhs recorded during the previousfinancial year ended March 31 2019. The Net Profit before tax and exceptional items ofyour Company for the financial year ended March 312020 stood at Rs. 160.85 Lakhs asagainst the Net Profit of Rs. 538.57 Lakhs for the financial year ended March 31 2019.Further details are included in notes to Accounts of Standalone Financial Statement.
On a consolidated basis your Company recorded a total income of Rs. 7250.05 Lakhsduring the financial year ended March 312020 as compared to the turnover of Rs. 5983.45lakhs recorded during the previous financial year ended March 31 2019 and achieved aconsolidated Net Profit before tax and exceptional item of Rs. 1303.27 Lakhs for thefinancial year ended March 31 2020 as against the Net Profit of Rs. 1068.29 Lakhs for thefinancial year ended March 31 2019 a growth of 22% over the corresponding Profit for thefinancial year ended March 31 2019. Further details are included in notes to Accounts ofConsolidated Financial Statement.
In accordance with the provisions of Section 136 of the Companies Act 2013 the AnnualReport of the Company containing therein its Consolidated and Standalone FinancialStatements are available on the website of the Company at web linkwww.rsdfinancelimited.com.
Any member who is interested in obtaining a copy of the Annual Report may write to theCompany at the Registered Office of the Company. Further a detailed analysis of Company'sperformance is included in the Management Discussion and Analysis which forms part ofthis Annual report.
4. OUTBREAK OF COVID-19 PANDEMIC
Towards the end of the financial year the World Health Organisation (WHO) declaredCovid-19 a pandemic. With the Covid-19 pandemic impacting people across the globe theCompany also witnessed severe disruption in its operations. The plant and the office weretemporarily shut down during late March 2020 and were partially re-opened in the middleweek of September 2020 after obtaining requisite government approvals.
The Company is taking all necessary measures in terms of mitigating the challengesbeing faced in the business and is focused on safety of employees implementing costoptimization measures and maintaining liquidity.
5. CHANGES IN THE NATURE OF THE BUSINESS
There have been no changes in the nature of the business of the Company or thesubsidiaries during the year under review.
6. FUTURE PROSPECTS
The state of Company's affair and future outlook is discussed in the ManagementDiscussion & Analysis section of this Annual Report.
Your Director's regret for not recommending any Dividend on Equity Shares of theCompany for the financial year ended 31 March 2020.
8. UNCLAIMED/UNPAID DIVIDEND
In terms of the provisions of Section 124(5) of the Companies Act 2013 the Companydid not have any unclaimed/unpaid dividend which was/is required to be transferred to theInvestors Education and Protection Fund.
The Company does not propose to transfer any amount to the Reserves or to statutoryreserves u/s 45 IC of RBI Act 1934 for the year ended March 31 2020 as your company hasincurred loss for the year ended 31st March 2020.
10. SHARE CAPITAL
The Equity shares of the Company are listed on the Bombay Stock Exchange (BSE) and theCalcutta Stock Exchange (CSE). The paid-up Equity Share Capital as on March 31 2020 wasRs 6.47 crores.
The equity share capital of the Company has been sub-divided from 1 (one) equity shareof face value of Rs. 10 each fully paid up into 2 (two) equity shares of face value ofRs. 5 each fully paid up w.e.f February 12 2020. Consequent to the sub-division of equityshares 6473240 equity shares of face value of Rs. 10/- each has been sub-divided into12946480 equity shares of face value of Rs. 5/- each.
During the year under review the Company has not issued any shares with differentialvoting rights nor has granted any stock options or sweat equity.
As on March 31 2020 none of the Directors of the Company hold instruments convertibleinto equity shares of the Company.
11. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There have been no material changes and commitments for the likely impact affectingfinancial position between end of the financial year and the date of the report except forthe impact arising out of COVID-19.
12. DISCLOSURE UNDER SECTION 61 OF THE COMPANIES ACT 2013
The Company sub-divided its Equity Shares from the face value of Rs. 10/- each to theface value of Rs. 5/- each. In compliance of Regulation 42(2) of SEBI (LODR) Regulations2015 February 12 2020 was fixed as the Record Date for the purpose of sub-division ofequity shares. Necessary approval from the Stock Exchanges for split of shares andNSDL/CDSL for assignment of New ISIN INE616F01022 was obtained.
On the record date post corporate action the shareholders holding shares inelectronic form were credited with the sub-divided shares. As regards the shares held bythe shareholders in physical form the new sub-divided Share Certificates have been sent.Consequent to allotment of sub-divided equity shares the Paid Up Capital of the companyis Rs 64732400 divided into 12946480 equity shares of Rs. 5/- each.
13. PUBLIC DEPOSIT
Being a Non Deposit taking Non-Banking Financial Company your Company has not acceptedany deposits from the public under section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 during the year under review.
14. FINANCIAL LIQUIDITY
The Company's cash and cash equivalents as on March 31 2020 is Rs 20.28 lakhs ascompared to Rs 56.12 lakhs as on March 31 2019. The Company continues to focus onjudicious management of its working capital.
Receivables and other working capital parameters were kept under strict check throughcontinuous monitoring.
15. SUBSIDIARY COMPANIES
The Company has two material subsidiaries Precision Automotive Private Limited and SRPOil Private Limited and one step down subsidiary Sigma HTS LLP.
No entity became or ceased to be the subsidiary joint venture or associate of RSDFinance Limited during Financial Year 201920.
The Annual Reports of these Subsidiaries will be made available for inspection by anyMember of the Company at the Registered Office of your Company at Holding No. - 4 TheAlcor Hotel Ramdas Bhatta Bistupur Jamshedpur - 831001 during business hours on alldays except Saturdays Sundays and Public Holidays between 12.30 pm and 03.00 pm up to thedate of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries for the financialyear ended March 31 2020 shall be provided to any Member of the Company upon receipt ofwritten request. In view of the continuing statutory restrictions on the movement ofpersons at several places in the Country Members may also send an advance request at thee-mail id - email@example.com for an electronic inspection of the aforesaiddocuments.
The Annual Reports along with the Audited Financial Statements of each of theSubsidiaries of your Company are also available on the website of the Company atwww.rsdfinancelimited.com
As required under Regulations 16(1) (c) & 46 of Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 "SEBI ListingRegulations" the Board of Directors had approved the Policy for determining MaterialSubsidiaries ("Policy"). The details of the Policy are available on the websiteof the Company www.rsdfinancelimited.com/InvestorRelations/ Codes/Polices
16. PERFORMANCE OF SUBSIDIARIES
i) S R P OIL PRIVATE LIMITED
The Company continues to holds 52.55% shares in SRP Oil Private Limited. SRP is amaterial unlisted subsidiary Company of RSD Finance Limited as per SEBI (ListingObligation and Disclosure Requirements) Regulations 2015. It is engaged in the businessof the hospitality industry. It is carrying business in the brand name of "The AlcorHotel" in Jamshedpur Jharkhand.
Net revenue of SRP Oil increased to Rs 2304.51 lakhs in the Financial Year 2019-2020compared to Rs 2038.43 lakhs in the previous year - registering a 13.05% increase. Thenet profit before tax increased to Rs 714.67 lakhs during the FY 2019-2020 compared to Rs514.81 lakhs earned in the previous year.
ii) PRECISION AUTOMOTIVE PRIVATE LIMITED (PAPL)
Precision Automotive Private Limited continues to be a wholly owned material subsidiaryCompany of RSD Finance Limited. During the financial year 2019-20 the Company earnedincome from investment activities and generation and transmission of solar energy.
The revenue from operations of PAPL was Rs 441.32 lakhs in the Financial Year 2019-20compared to Rs 356.74 lakhs earned in the previous year. The net profit before tax duringthe period was Rs 296.46 lakhs as compared to a profit of Rs 227.75 lakhs earned in theprevious year.
iii) SIGMA HTS LLP
SIGMA HTS is a Limited Liability Partnership whose majority stake is held by PrecisionAutomotive Private Limited the wholly owned subsidiary of your Company. Sigma HTS LLPdeals in providing heat treatment solutions.
It has started its operations in full swing during the financial year giving totalrevenue of Rs 4105.99 lakhs as compared to Rs 2899.24 lakhs earned in the previous year.The LLP has passed over the break-even phase and has started generating profits. Duringthe financial year it has earned a profit of Rs 185.69 lakhs.
The Company does not have any associate or a joint venture.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of the Companies (Accounts) Rules 2014 a statement containing the salient features ofthe financial Statements of the aforesaid subsidiaries has been provided in Form AOC- 1attached as "Annexure - A" and forms a part of this Report.
17. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the requirements in terms of Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to asListing Regulations') the Company has prepared Consolidated Financial Statements inaccordance with Ind AS 110 - "Consolidated Financial Statements" and Ind AS 27 -"Separate Financial Statements." The Consolidated Financial Statements formspart of this Report.
The Equity Shares of the Company continue to be listed on the Bombay Stock Exchange(BSE) and the Calcutta Stock Exchange Limited (CSE). The scrip code number of the EquityShares of the Company on BSE is 539875 and on CSE is 28123 respectively.
The Annual Listing Fee for the Financial Year 2019-20 and 2020-21 has been duly paid toboth the Stock Exchanges.
As on March 31 2020 the Board of Directors of your company consists of 5 Directors.Their details are as follows:
|Name of the Director ||Category |
|Mr. Rajeev Singh Dugal ||Managing Director |
|Mr. Sushil Kumar Khowala ||Independent Director |
|Mr. Malkeet Singh Saini ||Independent Director |
|Mr. Jayesh Taunk ||Independent Director |
|Ms. Upneet Dugal ||Executive Director |
The profile of all the Directors can be accessed on the Company's website atwww.rsdfinancelimited.com/companyprofile.
None of the Directors of the Company have incurred any disqualification under Section164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification ofDirectors) Rules 2014. All the Directors have confirmed that they are not debarred fromaccessing the capital market as well as from holding the office of Director pursuant toany order of Securities and Exchange Board of India or Ministry of Corporate Affairs orany other such authority.
The Board was duly constituted in compliance with the requirements of the CompaniesAct 2013 the Listing Regulations and provisions of the Articles of Association of theCompany. In the view of the Board all the directors possess the requisite skillsexpertise integrity competence as well as experience considered to be vital forbusiness growth. The detailed analysis of various skills qualifications and attributes asrequired and available with the Board has been presented in the Corporate GovernanceReport.
The changes in the Board during the financial year upto the date of this report is asfollows:
Retirement by rotation
Ms. Upneet Dugal
In accordance with the provisions of Section 152 of the Companies Act 2013 Regulation36 of the Listing Regulations and the Company's Articles of Association Ms. Upneet Dugal(DIN - 07680726) retires by rotation at the ensuing Annual General Meeting and beingeligible offers herself for reappointment.
The brief resume/details relating to Director who is to be reappointed is furnished inthe Notice of the ensuing AGM.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee and based on report of performance evaluation recommends her reappointment forthe consideration of the Members of the Company at the ensuing Annual General Meeting.
Mr. Rajeev Singh Dugal
Mr. Rajeev Singh Dugal (DIN: 00052037) was appointed as Managing Director of theCompany with effect from 04th July 2015 for a period of five years. Pursuant to therecommendation of Nomination & Remuneration Committee the Board of Directors at theirmeeting held on 22nd July 2020 has re-evaluated the tenure of Mr. Rajeev SinghDugal and approved his appointment as Managing Director of the Company not liable toretire by rotation for a further period of five years with effect from 22nd July 2020subject to approval of the shareholders of the Company.
Mrs. Kawaljeet Kaur Dugal
On the recommendation of the Nomination & Remuneration Committee Meeting Mrs.Kawaljeet Kaur Dugal (00052100) has been appointed as an Additional Director in thecapacity of Non-Independent Non- Executive Director w.e.f August 13 2020 subject to theapproval of the members at the ensuing Annual General Meeting (AGM).
Mr. Harsh Pandey
On the recommendation of the Nomination and Remuneration Committee Mr. Harsh Pandey(DIN: 08877286) was appointed as an Additional Director in the capacity of NonExecutiveIndependent Director for a period of 5 years with effect from 15th September 2020 subjectto the approval of the Members at the ensuing Annual General Meeting (AGM).
Information regarding the directors seeking appointment/reappointment as required byRegulation 36 of the Listing Regulations and Secretarial Standard-2 has been given in thenotice convening the ensuing Annual General Meeting.
Mr. Sukant Bari
On the recommendation of the Nomination and Remuneration Committee Mr. Suaknt Bari(DIN: 08967991) was appointed as an Additional Director in the capacity of NonExecutiveIndependent Director for a period of
5 years with effect from 21st November 2020 subject to the approval of the Members atthe ensuing Annual General Meeting (AGM).
Information regarding the directors seeking appointment/reappointment as required byRegulation 36 of the Listing Regulations and Secretarial Standard-2 has been given in thenotice convening the ensuing Annual General Meeting.
Mr. Malkeet Singh Saini
Mr. Malkeet Singh Saini (DIN: 02592649) who was first appointed as Non-ExecutiveIndependent Director on the Board of the Company on May 29 2014 and was reappointed as aNon - Executive Independent Director for a second term of one year with effect from 30September 2019 pursuant to the provisions of the Companies Act 2013 has completed thetenure of his directorship on 30 September 2020 and relinquished his office as theIndependent Director of the Company. The Board has placed on record its deep sense ofappreciation of the valuable contribution made by Mr. Saini during his long associationwith the Company.
Mr. Jayesh Taunk
Mr. Jayesh Taunk (DIN:07936303) who was appointed as a Non-Executive IndependentDirector of the Company on 12 September 2017 resigned as a Director from the close ofbusiness hours of 29 September 2020 due to his personal reasons. The Board of Directorsrecognizes and places on record his valued contribution and unstinted support to theCompany in the capacity of director.
Code of Conduct for Directors and Employees
The Company has adopted a Code of Conduct for its Directors and employees including acode of conduct for Independent Directors which suitably incorporates the duties ofIndependent Directors as laid down in the Companies Act 2013. The said Codes can beaccessed on the Company's website at www.rsdfinancelimited.com.
In terms of the Listing Regulations all Directors and Senior Management Personnel haveaffirmed compliance with their respective codes. The Managing Director has also confirmedand certified the same which is provided at the end of the Report on CorporateGovernance.
20. KEY MANAGERIAL PERSONNEL
In terms of Section 203 of the Companies Act 2013 the following are the KeyManagerial Personnel (KMP) of the Company as on 31 March 2020:
1. Mr. Rajeev Singh Dugal - Managing Director
2. Mr. Rechan Chhabra - Chief Financial Officer
3. Ms. Puja Choudhary - Company Secretary and Compliance Officer
There has been no change in the Key Managerial Personnel during the financial year.
21. INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors pursuant tothe provisions of sub-section (7) of Section 149 of the Companies Act 2013 confirmingthat they fulfill the criteria of Independence as specified in Section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) and 25(8) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The Independent Directors have also submitted a declaration that they have registeredtheir names in the databank of Independent Directors as being maintained by the IndianInstitute of Corporate Affairs (IICA) in terms of Rule 6(3) of the Companies (Appointmentand Qualification of Directors) Rules 2014 as amended from time to time.
None of the independent directors are aware of any circumstance or situation whichexist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence. The board of directors have taken on record the declaration and confirmationsubmitted by the Independent Directors after undertaking due assessment of the same and intheir opinion the Independent Directors fulfill the conditions specified in the Act andListing Regulations and are independent of the management.
The Independent Directors have complied with the Code for Independent Directorsprescribed in Schedule IV to the Act along with the Code of Conduct for Directors andSenior Management Personnel formulated by the Company as per Listing Regulations.
The Board confirms that the said Independent Directors meet the criteria as laid downunder the Companies Act 2013 as well as the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and have the requisite integrity experience and relevantexperience in their respective fields including the proficiency required to effectivelydischarge their roles and responsibilities in directing and guiding the affairs of theCompany.
22. SEPARATE MEETING OF INDEPENDENT DIRECTORS
Separate meeting of Independent Directors of the Company without the presence of theExecutive Directors and the Management representatives was held on September 22 2020 asrequired under Schedule IV to the Act (Code for Independent Directors) and Regulation 25(3) of the SEBI LODR. At the said meeting the Independent Directors inter alia reviewedand discussed:
- performance of Non-Independent Directors and the Board of Directors as a whole.
- performance of the Chairman of the Company.
- assessed the quality quantity and timeliness of flow of information between theCompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
All the Independent Directors of the Company attended the Meetings of IndependentDirectors. The Independent Directors expressed their satisfaction to the desired level onthe governance of the Board.
23. BOARD AND ITS COMMITTEES
The Board met six times during the financial year. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013 and the SEBIRegulation 2015. The details of the meetings of the Board attendance of Directors etc.is given separately in the Report of Corporate Governance which forms part of the report.
The following are the Board Committees during the Financial Year 2019-20:
1. Audit Committee;
2. Nominations & Remuneration Committee;
3. Stakeholders' Relationship Committee;
4. Corporate Social Responsibility Committee;
5. Risk Management Committee and
The composition of each of the above Committees their respective roles attendance andresponsibilities are provided in detail in the Corporate Governance Report
24. DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended March 312020 the Board ofDirectors hereby confirms that:
(a) in the preparation of Annual Accounts for the financial year ended March 31 2020the applicable Ind AS have been followed and there are no material departures from thesame;
(b) the directors had selected such accounting policies and applied them consistentlyand made 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 31st March 2020 and of the profit andloss of the Company for the year ended on that day;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Annual Accounts for the year ended 31st March 2020 have been prepared on a"going concern" basis;
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Further there are no qualifications reservations or adverse remarks made by theStatutory Auditors/ Secretarial Auditors in their respective reports.
25. BOARD EVALUATION
Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation17(10) read with Part D of Schedule II of the SEBI (Listing Obligations and DisclosuresRequirement) Regulations 2015 the Nomination and Remuneration Committee and the Board ofDirectors have formulated a policy for performance evaluation of its own performance ofvarious mandatory Committees of the Board and of the individual Directors.
In terms of the provisions of Regulation 19(4) read with Part D of Schedule II of theSEBI Listing Regulations 2015 and Section 178 of the Companies Act 2013 the performanceevaluation process of all the Independent and Non-Independent Directors of the Company wascarried out by the Nomination and Remuneration Committee in its meeting held on March 202020.
Further in terms of Regulations 17(10) of the SEBI Listing Regulations 2015 andSchedule
IV of the Companies Act 2013 the Board of Directors in their meeting held on July 222020 carried out the performance evaluation of the Independent Directors (excluding theDirector being evaluated) its own performance and that of its Committees.
The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance through structured questionnaire.
The entire performance evaluation process was completed to the satisfaction of Board.
Further SEBI vide its circular (Ref. no. SEBI/HO/CFD/CMD/CIR/P/2017/004) dated January5 2017 issued a guidance note on Board Evaluation for listed companies. In view of thesame the Independent Directors in their separate meeting held on September 22 2020 underRegulation 25(4) of the SEBI Listing Regulations 2015 and Schedule IV of the CompaniesAct 2013 had:
(i) reviewed the performance of Non Independent Directors and the Board as a whole;
(ii) reviewed the performance of the Chairperson of the Company taking into accountthe views of executive and nonexecutive Directors; and
(iii) assessed the quality quantity and timelines of flow of information between theCompany management and the
Board that was necessary for the Board to effectively and reasonably perform theirduties.
The Board of Directors has expressed its satisfaction on the functioning andperformance of Board and Committees and the performance of individual directors. Itemerged that the Board had a good mix of competency experience qualifications anddiversity. Each Board member contributed to the collective wisdom of the Board keeping inmind his/her own background and experience. There was active participation and adequatetime was given for discussing strategy. Overall the Board was functioning very well in acohesive and interactive manner. The Directors even expressed their satisfaction with theevaluation process.
26. FAMILARISATION PROGRAMME:
In order to encourage active participation from the Independent Directors and also toenable them to understand the business environment of the Company in depth and to assistthem in performing their role as Independent Directors of the Company a FamiliarizationProgramme for the Independent Directors has been adopted and implemented.
Once appointed the Independent Directors undergo the Familiarization Programme of theCompany wherein the necessary information and relevant documents in respect to theindustry the regulatory environment in which the Company operates and the Annual Reportsof past financial years are provided to them. The Managing Director of the Company alsohas a one to one discussion with the newly appointed Director to familiarize him with theCompany's culture.
Pursuant to Regulation 46 of the Listing Regulations the details of theFamiliarization program of the Independent Directors are available on the website of theCompany at www.rsdfinancelimited.com/investorrelations/c odes&policies (Path)
27. INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements of the Companyas designed and implemented by the Company are adequate. During the year under review nomaterial or serious observation has been received from the Statutory Auditors and theInternal Auditors of the Company on the inefficiency or inadequacy of such controls.
The internal audit is entrusted to M/s. Heerwal & Associates a reputed firm ofChartered Accountants. The Internal Auditor monitor and evaluate the efficacy and adequacyof internal control systems in the Company its compliance with the operating systemsaccounting procedures and policies at the Company and its subsidiaries. It also impartsguidance and constructive suggestions for improvement of the audit function in theCompany.
The Audit Committee of the Board of Directors comprising of independent directorsregularly reviews the audit plans significant audit findings adequacy of internalcontrols compliance with accounting standards as well as reasons for changes inaccounting policies and practices if any.
Necessary certification by the Statutory Auditors in relation to Internal FinancialControl u/s 143(3)(i) of the Act forms part of the Audit Report.
28. INTERNAL CONTROL SYSTEMS
Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofgoals compliance with policies procedure applicable laws and regulations and that allassets and resources are acquired economically used efficiently and adequately protected.
Your Directors confirm that during the year under review there were no reportablematerial weaknesses in the present systems or operations of internal controls.
29. CONSERVATION OF ENERGY TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNING &OUTGO
The Company is a non-banking financial Company and is also involved in job workactivities. The Company's activity involves very low energy consumption and has noparticulars to report regarding conservation of energy and technology absorption.
However efforts are made to further reduce energy consumption. The Company did nothave any foreign exchange earnings and expenditures during the year.
30. RELATED PARTY TRANSACTION
All Related Party Transactions entered into by your Company during the financial yearwere on arm's length basis and were in the ordinary course of business and in compliancewith the provisions of the Companies Act 2013 the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 and Indian Accounting Standards on"Related Party Disclosure (Ind AS-24)."
All Related Party Transactions are placed before the Audit Committee. None of suchrelated party transactions required the approval of the Shareholders as per the Act orListing Regulations. Further there were no materially significant related partytransactions that may have potential conflict of interests with the Company at large.
The Board has approved and adopted the Policy on Related Party Transactions and thesame is uploaded on the Company's website - www.rsdfinancelimited.com/InvestorRelations/Codes/Policies (path)
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Act along with the justification for entering into such contract orarrangement in Form AOC-2 forms part of the report as "Annexure - B".
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany save and except the payment of sitting fees to Independent Directors and theremuneration given to executive directors.
31. RISK MANAGEMENT
Pursuant to Section 134 of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasadopted a risk management policy. The policy provides for identification assessment andcontrol of risks that in the opinion of the Board may threaten the existence of theCompany. The above policy is being reviewed/re-visited at such other intervals as deemednecessary for modifications and revisions if any.
32. DISCLOSURES OF TRANSACTIONS OF THE LISTED ENTITY WITH ANY PERSON OR ENTITYBELONGING TO THE PROMOTER/PROMOTER GROUP WHICH HOLD(S) 10% OR MORE SHAREHOLDING IN THELISTED ENTITY IN THE FORMAT PRESCRIBED IN THE RELEVANT ACCOUNTING STANDARDS FOR ANNUALRESULTS.
Rajeev Singh Dugal and KU Benefit Trust hold 10% or more shares in the Company. Thedetails of transactions with promoter/ promoter group holding 10% or more shares have beendisclosed in the financial statement which is part of the Annual Report.
33. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of Section 135 of the Companies Act 2013 a Corporate SocialResponsibility (CSR) Committee has been constituted by the Board of Directors.
The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board.
The CSR Policy may be accessed on the Company's website at the www.rsdfinancelimited.com
The report on the CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached as "Annexure - C" and forms anintegral part of the report.
34. VIGIL MECHANISM/WHISTLE BLOWER POLICY
Mechanism/Whistle Blower Policy which is approved and adopted by the Board of Directorsof the Company.
The Policy provides a framework to promote responsible and secured reporting ofunethical behavior actual or suspected fraud violation of applicable laws andregulations financial irregularities abuse of authority etc. by Directors employeesand the management. The Vigil Mechanism/ Whistle Blower Policy is available on the websiteof the Company at www.rsdfinancelimited.com.
The Company endeavors to provide complete protection to the Whistle Blowers against anyunfair practices. It is affirmed that no personnel of the Company has been denied accessto the Audit Committee and no case was reported under this policy during the year.
35. COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS KEY MANAGERIALPERSONNEL AND SENIOR MANAGEMENT PERSONNEL
The Board has on recommendation of the Nomination and Remuneration Committeeformulated a policy for selection and appointment of Directors senior management andtheir remuneration in accordance with the Act and the Listing Regulations.
The Nomination & Remuneration Policy of the Company aims to attract retain andmotivate qualified personnel of the Company and seeks to employ people who not onlyfulfill the eligibility criteria but also have the attributes needed to fit into thecorporate culture of the Company.
The Company pays remuneration to Independent Directors by way of sitting fees andExecutive Non-Independent Directors of your Company do not accept any sitting fees.Remuneration to Directors is paid within the limits as prescribed under the Companies Act2013 and the limits as approved by the Members of the Company from time to time. Therehave been no changes in the said policy during the financial year. The policy is availableon the Company's website at www.rsdfinancelimited.com/investor relations/codes/policies(path) and is also annexed and forms part of the report as "Annexure - D"
36. AUDITORS AND THEIR REPORTS
The matters related to Auditors and their Reports are as under:
Statutory Auditors & their Reports
M/s. Prasad Kumar & Co. Chartered Accountants Jamshedpur bearing RegistrationNo. 008816C have been appointed as the Statutory Auditors of the Company for a period of 5years from the conclusion of the 54th AGM (for FY 2017-18) till the conclusion of the 59thAGM (for FY 2021-22)
M/s. Prasad Kumar & Co. fulfills the eligibility and qualification norms asprescribed under the Act the Chartered Accountants Act 1949 and rules and regulationsissued thereunder. The Statutory Auditors have given a confirmation to the effect thatthey are eligible to continue with their appointment and that they have not beendisqualified in any manner from continuing as Statutory Auditors.
The standalone and the consolidated financial statements of the Company have beenprepared in accordance with Indian Accounting Standards (Ind AS) notified under Section133 of the Companies Act 2013. The notes on financial statements referred to in theAuditors' Report are self-explanatory and do not call for any further comments. TheAuditors Report does not contain any qualification reservation adverse remark ordisclaimer.
Secretarial Auditor & their Reports
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed Mr. Sital Prasad Swain Company Secretary in practice(Membership No. F6338 & CP No. 6814) to conduct the Secretarial Audit for the FY2019-20.
The Secretarial Audit Report confirms that the Company has complied with the provisionsof the Companies Act 2013 Rules Listing Regulations and Guidelines and that there wereno deviations or non-compliances. The Secretarial Audit Report certified by theSecretarial Auditors in the specified form MR-3 is annexed herewith and forms part ofthis report as "Annexure - E". The Report does not contain any qualificationreservation or adverse remark.
Furthermore the Secretarial Auditor Mr. Sital Prasad Swain Practicing CompanySecretaries has also certified the compliance as per Regulation 24A of the SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 and same has beenintimated to the stock exchanges within the stipulated time and there stood noqualification reported by the Secretarial Auditor.
Mr. Sital Prasad Swain has through his certificate dated December 02 2020 hascertified that none of the directors on the Board of the Company have been debarred ordisqualified from being appointed or continuing as director of companies by theBoard/Ministry of Corporate Affairs or any such statutory authority. The said certificateis appended to the Board's Report and should also form a part of the Corporate GovernanceReport of the Board as required under the SEBI Listing Regulations.
Further the Board of Directors of the Company has re-appointed Mr. Sital Prasad Swainto undertake the Secretarial Audit of the Company for the financial year 2020-21. TheCompany has received a written consent from him that the appointment is in accordance withthe applicable provisions of the Act and rules framed thereunder.
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable in respect ofthe business activities carried out by the Company.
37. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed to this Board's Report and are marked as"Annexure - F'.
The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Act read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.No employee employed throughout the financial year has drawn a remuneration of more thanRs 1.02 crores per annum and no employee employed for a part of the financial year hasdrawn a remuneration of more than Rs 8.50 lakhs per month.
The Managing Director of the Company receives consultancy fees for services rendered inprofessional capacity from the Company's subsidiary SRP Oil Pvt. Ltd.
38. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The loan made guarantee given or security provided in the ordinary course of businessby a Non-Banking Financial Company registered with Reserve Bank of India are exempt fromthe applicability of provisions of Section 186 of the Act. As such the particulars ofloans and guarantee have not been disclosed in this Report.
During the year under review the Company has invested surplus funds in varioussecurities in the ordinary course of business.
39. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading for itsDesignated Persons in compliance with the SEBI (Prohibition of Insider Trading)Regulations 2015. The Code lays down Guidelines which advise the insiders on proceduresto be followed and disclosures to be made while dealing with the shares of the Companyand cautioning them of the consequences of violations. The Code requires pre- clearancefor dealing in the Company's shares and prohibits the purchase or sale of Company sharesby 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 Company has also adopted Code of Practice and Procedures for Fair Disclosureof Unpublished Price Sensitive Information' in accordance with the SEBI (Prohibition ofInsider Trading) Regulations 2015. This Code aims to set forth a framework and policy forfair disclosure of events and occurrences that could resolutely impact price of theCompany's securities. The Company endeavors to preserve the confidentiality ofun-published price sensitive information and to prevent misuse of such information.
The code of conduct for Prevention of Insider Trading is posted on the website of theCompany and can be accessed at: www.rsdfinancelimited.com
All the Board of Directors and designated employees have confirmed compliance with theCode.
40. EXTRACT OF ANNUAL RETURN (MGT - 9)
The extract of the annual return in Form MGT - 9 as required under the provisions ofSection 92(3) and 134(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 is set out in the Annexure - G' to thisreport.
The extract of the annual return of the company is also available on the company'swebsite at www.rsdfinancelimited.com and is available at the link
41. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company asstipulated under Chapter IV of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in a separate section and forms an integral part of thisReport.
42. CORPORATE GOVERNANCE
The Company believes that establishing good corporate governance practices in each andevery function of the organization leads to increased operational efficiencies andsustained long term value creation for all stakeholders. In terms of Regulation 34(3) readwith Schedule V of the Listing Regulations the following forms part of this Report:
(i) Report on the Corporate Governance;
(ii) Declaration regarding compliance to Code of Conduct by Board Members and SeniorManagement Personnel;
(iii) A certificate from a Practicing Company Secretary that none of the directors onthe Board of the Company have been debarred or disqualified from being appointed orcontinuing as directors of companies by the Board/Ministry of Corporate Affairs or anysuch statutory authority;
(iv) the Certificate duly signed by the Managing Director and Chief Financial Officeron the Financial Statements of the Company for the year ended March 31 2020 as submittedto the Board of Directors at their meeting held on July 31 2020; and
(v) Auditors' Certificate regarding compliance of conditions of Corporate Governance
43. SECRETARIAL STANDARDS
During the Financial Year 2019-20 the Company has complied with all the relevantprovisions of Secretarial Standards issued by the Institute of Company Secretaries ofIndia on Board Meetings and General Meetings (SS1 and SS2).
44. RBI GUIDELINES
The Company continues to comply with all the applicable regulations prescribed by theReserve Bank of India ("RBI") from time to time.
45. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant and material orders passed by the regulators or courts ortribunals that would impact the going concern status of the Company and its futureoperations.
46. INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the Audit Committee under Section 143 (12) of Companies Act 2013any instances of fraud committed against the Company by its officers or employees thedetails of which needs to be mentioned in the Board's Report.
47. HUMAN RESOURCES
Your Company continues to put due emphasis on appropriate human resource developmentfor its business. The employees of the Company and the group fully identify with theCompany's and the groups vision and business goals.
48. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
The Company has zero tolerance for sexual harassment at workplace. We have adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace andconstituted the Internal Complaints Committee in line with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules there under. The Policy aims to provide protection to employees at the workplace andprevent and redress complaints of sexual harassment and for matters connected orincidental thereto with the objective of providing a safe working environment whereemployees feel secure.
The Company has not received any complaint under the said policy. Web link for thepolicy in the website is www.rsdfinancelimited.com/codes-policies.
Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares and ESOP) to the employees of theCompany under any scheme.
3. The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.
4. Business Responsibility Report is not applicable on the Company.
5. Formation of Dividend Distribution Policy is not applicable on the Company.
Your Directors would like to acknowledge the role of all its stakeholders' viz.shareholders bankers lenders borrowers and all others for their continued support toyour Company and the confidence and faith that they have always reposed in your Company.
Your Directors acknowledge and appreciate the guidance and support extended by all theRegulatory authorities including Securities Exchange Board of India (SEBI) Reserve Bankof India (RBI) Ministry of Corporate Affairs (MCA) Registrar of Companies Kolkata(ROC) the Stock Exchanges and the NSDL and CDSL.
We value the professionalism of all the employees who have proved themselves in achallenging environment and whose efforts have stood the Company in good stead and takenit to present level.
|For and on behalf of the Board |
|Sd/- ||Sd/- |
|Upneet Dugal ||Rajeev Singh Dugal |
|Director ||Managing Director |
|DIN: 07680726 ||DIN: 00052037 |
Date: December 04 2020