RSD Finance Limited
Your Directors have pleasure in presenting their Fifty- Fifth 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 2018.
1. KEY FINANCIAL HIGHLIGHTS
The highlights of the financial results of the Company on a standalone and consolidatedbasis are as follows:
| || |
(AMT. IN RUPEES)
| || |
|PARTICULARS ||Year Ended March 31 2018 ||Year Ended March 31 2017 ||Year Ended March 31 2018 ||Year Ended March 31 2017 |
|Revenue from Operations ||28127201 ||66644333 ||381743474 ||391828138 |
|Other Income ||41541434 ||7589107 ||85766023 ||37289489 |
|Total Revenue ||69668635 ||74233440 ||467509497 ||429117627 |
|Total Expenses ||35613908 ||22270854 ||412035980 ||292360419 |
|Profit for the year before tax ||34054727 ||51962586 ||55473517 ||136757208 |
|Add : Extraordinary Items ||- ||- ||11561393 ||- |
|Less: Provision for Taxation || || || || |
|Current Tax ||6588024 ||9230949 ||18050278 ||26179435 |
|Deferred Tax ||(100003) ||61558 ||(1671790) ||4099942 |
|Less: Minority Interest ||- ||- ||3497882 ||6386344 |
|Profit during the year ||27566706 ||42670079 ||47158540 ||100091487 |
|Add: Profit B/F from previous Year ||267360377 ||233412071 ||420441160 ||336097390 |
|Sub Total ||294927083 ||276082150 ||467599700 ||436188877 |
|Less: P/L Appropriation ||834704 ||187756 ||953602 ||383170 |
|Less: Transferred to Statutory Reserve ||5513341 ||8534016 ||5513341 ||8534016 |
|Less: Proposed Dividend including DDT ||- ||- ||6547452 ||6830531 |
|Balance C/f to Balance Sheet ||288579038 ||267360377 ||461132757 ||420441160 |
2. NATURE OF BUSINESS
Your Company is in existence for more than five decades. The Company is a Non-BankingFinancial Company which falls within the category of "Non-Banking FinanceCompany-Non-Systemically Important Non-Deposit taking Company". It is registered withthe RBI as a non-deposit taking NBFC under section 45 IA of the RBI Act 1934.
As part of our business activities we are predominantly focused into Investing Fundsinto capital market as well as in money market. We also provide Job Work services.
There have been no changes in the nature of the business of the Company during the yearunder review.
3. BUSINESS PERFORMANCE REVIEW
The Financial Year 2017-18 has been a challenging one due to volatile marketconditions. Your company continued its journey towards a sustainable and balanced growth.
The revenue from job work services increased to '118.65 lakhs compared to Rs.69.79lakhs in the previous financial year whereas the interest income is Rs.162.63 lakhscompared to Rs.596.65 lakhs in the previous financial year.
Revenue from other sources increased to Rs.415.41 lakhs compared to Rs.75.89 lakhs inthe previous financial year.
However this financial year is characterized by impact of Non-Performing Asset. TheCompany is experiencing difficulties in collection of the interest and principalreceivable from customers.
The profitability of the Company has been impacted by provisioning of substandardassets of Rs.66.18 lakhs. Further our wholly owned subsidiary Precision Automotive Pvt
Ltd sold one of its operational plant during the year. However the key factor drivingthe Company financial performance during the financial year was successful commencement ofHeat Treatment operations by SIGMA HTS LLP a ste^down subsidiary of the Company.
There is a minor decline of 2.57% in the Consolidated Revenue from operations for theFinancial Year 2017-18 as it decreased to Rs.3817.43 lakhs compared with Rs.3918.28 in thePrevious Year.
On a Standalone basis the Profit before Tax for the year stood at Rs.340.55 lakhs ascompared to Rs.519.62 lakhs in the Previous Year. The Profit after Tax is Rs.275.66 Lakhsas compared to the profit of Rs.426.70 lakhs in the previous year.
On a Consolidated basis the Profit before Tax and Extraordinary items for theFinancial Year stood at Rs.554.74 lakhs compared with Rs.1367.57 lakhs in Previous Year.The Profit after Tax is Rs.471.59 lakhs as compared to the profit of Rs.1000.91 lakhs inthe previous year.
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the Financial Year and the date of thisreport.
4. FUTURE PROSPECTS
With the Indian economy poised for its next wave of growth under the reforms beingunleashed there lays tremendous opportunity for growth in the market.
The Company intends to continue focusing on capital market activities including tradingin securities and carrying of job work activities and is looking forward for a sustainablegrowth in the coming years which would enhance the shareholders' value.
The Company is hopeful of making full use of the growth opportunities available to it.
Your Director's regret for not recommending any Dividend on Equity Shares and hasdecided to retain the profits for future investments and to strengthen the business of theCompany.
The Company proposes to transfer Rs.55.13 lakhs to the statutory reserves and an amountof Rs.2885.79 lakhs is proposed to be retained in the P/L account during the FinancialYear 2017-18.
7. 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 2018 wasRs.6.47 crores. During the year under review the Company has not issued any shares withdifferential voting rights nor has granted any stock options or sweat equity. As on March31 2018 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
8. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
9. PUBLIC DEPOSIT
During the year under review your Company neither accepted any deposits nor there wereany amounts outstanding at the beginning of the year which were classified as Rs.Deposits'in terms of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 and hence the requirement for furnishing of details of depositswhich are not in compliance with the Chapter V of the Companies Act 2013 is notapplicable.
10. FINANCIAL LIQUIDITY
The Company's cash and cash equivalents as on March 31 2018 is Rs.34.96 lakhs comparedto Rs.112.73 lakhs as on March 31 2017. The Company continues to focus on judiciousmanagement of its working capital. Receivables and other working capital parameters werekept under strict check through continuous monitoring.
11. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred to as "Listing Regulations") andapplicable provisions of the Companies Act 2013 read with the Rules issued thereunderthe Consolidated Financial Statements of the Company for the financial year 2017-18 havebeen prepared in compliance with applicable Accounting Standards and on the basis ofaudited financial statements of the Company and its subsidiary companies as approved bythe respective Board of Directors.
The Consolidated Financial Statements form part of the Annual Report and reflect theoperations of Precision Automotive Private Limited SRP Oil Private Limited and Sigma HTSLLP.
No new subsidiary was added and no Company has ceased to be a RSD Finance Limitedsubsidiary during FY 2017-18.
Further the annual accounts annual reports and the related detailed information onall the Subsidiary Companies shall be made available to the Shareholders of the Companyand the Shareholders of the subsidiaries seeking such information at any point of time. Inaccordance with Section 136 of the Act the audited annual financial statements includingconsolidated financial statements and audited accounts of the Subsidiary Companies aredisplayed on the website of the Company at www.rsdfinancelimited.com and shall be kept atthe Registered Office of the Company at the Corporate Office at Jamshedpur and at theRegistered Office of the Subsidiary Companies for inspection by any Shareholder duringbusiness hours on all days except Saturdays Sundays and Public Holidays.
Further the Company has adopted a Policy for determining Material Subsidiaries interms of Regulation 16 (1) (c) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations'). ThePolicy as approved by the Board is uploaded on the Company's websitewww.rsdfinancelimited.com/InvestorRelation s/Codes/Polices (path)
12. 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 un-listed subsidiary Company of RSD Finance Limited as per SEBI (ListingObligation and Disclosure Requirements) Regulations 2015. It is engaged in the businessof Hotel Industries. It is carrying business in the brand name of "The Alcor HoteP'inJamshedpur Jharkhand.
Net revenue of SRP Oil increased to 1830.98 lakhs in the Financial Year 2017-18compared to 1466.77 lakhs in the previous year-registering a 24.83% increase. The netprofit before tax was Rs.373.31 lakhs during the FY 2017-18 compared to Rs.196.28 lakhs inthe previous year.
ii) PRECISION AUTOMOTIVE PRIVATE LIMITED (PAPL)
Precision Automotive Private Limited continues to be a wholly owned material subsidiaryCompany of RSD Finance Limited. It is engaged in the business of Manufacturing Buying andRe-selling of Auto Components. The Company is also earning financial income by way ofinvestment activity in various financial instruments and engaged in generation andtransmission of solar energy.
The Company has recently closed down its operations in one of its factories situated atPlot No. C-12 Phase-II Adityapur Industrial Area Jamshedpur-832109 and has relinquishedits leasehold rights along with transferring all shed civil structures electricalinstallations and other immovable assets.
The revenue from operations of PAPL was Rs.816.22 lakhs in the Financial Year comparedto Rs.2105.07 lakhs in the previous year. The net profit before tax during the period wasRs.336.44 lakhs as compared to a profit of Rs.651.55 lakhs in the previous year.
iii) SIGMA HTS LLP
SIGMA HTS is a Limited Liability Partnership of which 65% stake is held by PrecisionAutomotive Pvt. Ltd. the wholly owned subsidiary of your Company. Sigma HTS LLP dealswith heat treatment solutions and is comparatively a new entity which has been set up.
It has started its operations during the financial year giving total revenue ofRs.1353.27 lakhs. However the LLP has incurred a loss of Rs.314.48 lakhs due todepreciation amounting to Rs.437.19 lakhs. Whereas overall the LLP has earned a cashprofit of Rs.122.71 lakhs.
Further during the year Sigma HTS has been awarded as the Emerging Supplier of theYear Award and also the Kaizan Award from
Timken India Limited.
The Company does not have any associate or joint venture Companies. Pursuant to theprovisions of Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing the salient features of the financialposition of the above mentioned subsidiary Companies in Form AOC-1 is attached as"Annexure-1" and forms a part of this Report.
Further pursuant to Section 136 of the Act the financial statements of the Companyincluding consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Companywww.rsdfinancelimited.com.
There have been no material changes in the nature of the business of the subsidiariesduring the financial year 2017-18.
The Equity Shares of the Company continue to be listed on the Bombay Stock Exchange(BSE) and the Calcutta Stock Exchange Limited (CSE). The Shares of the Company was firsttraded on the Bombay Stock Exchange on September 13 2017. The scrip code number of theEquity Shares of the Company on BSE is 539875 and on CSE is 28123 respectively.
The Annual Listing Fee for the Financial Year 2018-19 has been duly paid within thestipulated time to both the Stock Exchanges.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany
Ms. Upneet Dugal (DIN 07680726) Director of the Company retires by rotation at theforthcoming Annual General Meeting and being eligible offers herself for re-appointment.The Board of Directors on the recommendation of the Nomination and Remuneration Committeeand based on report of performance evaluation recommends her re-appointment for theconsideration of the Members of the Company at the ensuing Annual General Meeting.
Ms. Anureet Kaur (DIN-07136456) resigned from her office as a Director on June 142017. The Board places on record its sincere appreciation for the services rendered by Ms.Anureet Kaur during her tenure as Director of the Company.
The Board of Directors has appointed Mr. Jayesh Taunk (DIN: 07936303) as an AdditionalNon-Executive Independent Director of the Company on September 12
2017. In terms of Section 161 of the Companies Act 2013 Mr. Jayesh Taunk holds officeup to the date of ensuing Annual General Meeting. The Board recommends the appointment ofMr. Jayesh Taunk as a Non-Executive Independent Director of the Company.
The first term of office of Mr. Sushil Kumar Khowala (DIN-00224587) as IndependentDirectors will complete on 29th September 2018. The Board of Directors on therecommendation of the Nomination and Remuneration Committee and based on report ofperformance evaluation has recommended re-appointment of Mr. Sushil Kumar Khowala as anIndependent Director for a second term of 5 (five) consecutive years on the Board of theCompany.
Profile and other information of the aforesaid Directors as required under Regulation36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andSecretarial Standard-2 forms part of the notice convening the ensuing Annual GeneralMeeting.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing Regulations.
All the directors of the Company have confirmed that they are not disqualified frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013.
Further all the Directors Key Managerial Personnel and senior management of theCompany have affirmed compliance with the code of conduct applicable to the Directors andemployees of the Company and a declaration in this regard made by the Managing Director isattached which forms a part of this report of Directors. The Code of Conduct is availableon the Company's website www.rsdfinancelimited.com
15. KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel (KMP) of the Company pursuant to theprovisions of the Company Act 2013 as on the date of this report:
1. Mr. Rajeev Singh Dugal-Managing Director
2. Mr. Rechan Chhabra-Chief Financial Officer
3. Ms. Puja Choudhary-Company Secretary and Compliance Officer
16. DECLARATION BY 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(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
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.
17. SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year under review the Independent Directors had in accordance with theprovisions of Schedule IV (Code for Independent Directors) of the Companies Act 2013 andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 met separately and discussed and reviewed inter alia the performance of NonIndependent Directors and the Board as a whole after taking into consideration the viewsof Executive and Non- Executive Directors.
18. 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 dates of meetings held by the Board and its Committeesattendance of Directors etc. is given separately in the Report of Corporate Governancewhich forms part of the report.
COMMITTEES OF THE BOARD
The Board has formulated the following Committees:
The Audit Committee comprises of the following Directors:
1. Mr. Jayesh Taunk
2. Mr. Sushil Kumar Khowala
3. Mr. Rajeev Singh Dugal
During the financial year under review all the recommendations made by the AuditCommittee were accepted by the Board.
The Nomination and Remuneration Committee comprises of following Independent Directors:
1. Mr. Malkeet Singh Saini
2. Mr. Sushil Kumar Khowala
3. Mr. Jayesh Taunk
The Stakeholders Relationship Committee comprises of following Directors:
1. Mr. Sushil Kumar Khowala
2. Mr. Rajeev Singh Dugal
3. Mr. Malkeet Singh Saini
The CSR Committee comprises of following Directors:
1. Mr. Rajeev Singh Dugal
2. Ms. Upneet Dugal
3. Mr. Sushil Kumar Khowala
The Risk Management Committee comprises of following Directors:
1. Mr. Malkeet Singh Saini
2. Mr. Sushil Kumar Khowala
3. Ms. Upneet Dugal
The details of the Committees along with the number of meetings and attendance at themeetings are provided in the Corporate Governance Report which forms a part of thisreport.
19. 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 31 2018 the Board ofDirectors hereby confirms that:
(a) in the preparation of Annual Accounts for the financial year ended March 31 2018the applicable Accounting Standard have been followed and there are no material departuresfrom the same;
(b) such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2018 and of theprofits of the Company for the year ended on that date;
(c) proper and sufficient care have been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguardingassets of the Company and for preventing and detecting frauds and other irregularities;
(d) the Annual Accounts have been prepared on a going concern basis;
(e) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and were operating effectively.
20. BOARD EVALUATION
The Board of Directors of the Company carried out annual evaluation of its ownperformance of the Committees of the Board and individual Directors pursuant to theprovisions of the Companies Act 2013 and the corporate governance requirements asprescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The evaluation was conducted on the basis of a structured questionnaire which wasprepared taking into consideration various aspects such as board structure andcomposition degree of fulfillment of key responsibilities establishment and delineationof responsibilities to various Committees effectiveness of Board processes attendanceand contribution at Board/ Committee Meetings and guidance/ support to the managementoutside Board/ Committee Meetings.
The Managing Director was evaluated on key aspects of his role including setting thestrategic agenda of the Board Meeting encouraging active engagement by all Board membersand motivating and providing guidance to the Management. Areas on which the Committees ofthe Board were assessed included degree of fulfillment of key responsibilities adequacyof Committee composition and effectiveness of meetings.
The feedback received from the Directors was discussed and reviewed by the IndependentDirectors at their annual separate Meeting held on 14th March 2018 and also shared withthe Board. At the separate annual Meeting of Independent Directors performance ofNon-independent Directors and the Board as a whole and various Committees was discussed.The performance of the individual Directors including Independent Directors performanceand role of the Board/Committees was also discussed at the Board Meeting held on 20thMarch 2018.
The Board of Directors has expressed its satisfaction on functioning and performance ofBoard and Committees and the performance of individual directors. They expressed theirsatisfaction with the evaluation process.
21. 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 main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides benchmarking controls with bestpractices in the industry. It also imparts guidance and constructive suggestions forimprovement of the audit function in the Company.
22. 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.
23. COMPLIANCE WITH NBFC REGULATIONS
The Company has complied with all the regulatory provisions of the Reserve Bank ofIndia applicable to Non-Banking Financial Company-Non-Systemically Important Non-Deposittaking Company.
24. CONSERVATION OF ENERGY TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNING &
The Company being a non-banking finance Company and not involved in any industrial ormanufacturing activities the Company's activities involve very low energy consumption andhas no particulars to report regarding conservation of energy and technology absorption.However efforts are made to further reduce energy consumption.
The Company did not have any foreign exchange earnings.
25. RELATED PARTY TRANSACTION
All Related Party Transactions entered into by your Company during the financial yearwere course of business and in compliance with the provisions of the Companies Act 2013and the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
All Related Party Transactions are placed before the Audit Committee and also beforethe Board for approval. Omnibus approval was obtained for transactions which were ofrepetitive nature. A statement giving details of all Related Party Transactions enteredinto pursuant to omnibus approval are placed before the Audit Committee for review andapproval on a quarterly basis.
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)
No materially significant related party transactions were made by the Company with itsPromoters Directors Key Managerial Personnel or other designated persons which may havepotential conflict with interest of the Company at large. Accordingly particulars ofcontracts or arrangements with related parties referred to in Section 188(1) of the Actalong with the justification for entering into such contract or arrangement in Form AOC-2forms part of the report as "Annexure-2".
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. For details of the transactions with RelatedParty refer to the note 21 to the financial statements.
26. RISK MANAGEMENT POLICY
The Board of Directors has adopted a risk management policy for the Company whichprovides for identification assessment and control of risks that in the opinion of theBoard may threaten the existence of the Company. The above policy is beingreviewed/re-visited once a year or at such other intervals as deemed necessary formodifications and revisions if any.
27. 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 www.rsdfinancelimited.com
The report on the CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached Annexure-3 of the report.
28. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal or unethical behavior. The employees are free toreport violations of applicable laws and regulations and the Code of Conduct.
The policy provides for a formal mechanism for all the directors and the employees toreport to the Management their genuine concerns or grievances about unethical behavioractual or suspected fraud and any violation of the Company Conduct and Ethics policy.
The Company has selected a Nodal officer to whom disclosures are to be made. The Policyis available on the Company www.rsdfinancelimited.com
29. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on recommendation of the Nomination and Remuneration Committeeformulated a policy for selection and appointment of Directors senior management andtheir remuneration. There have been no changes in the said policy during the financialyear. The policy is available on the Company
www.rsdfinancelimited.com/investor relations/codes/policies (path) and is also annexedand forms part of the report as "Annexure-4"
30. AUDITORS AND THEIR REPORTS
The matters related to Auditors and their Reports are as under:
Observations of statutory auditors on financial statements for the year ended March312018:
The Report given by M/s. Prasad Kumar & Co. Chartered Accountants on the financialstatements of the Company for the year 201718 is part of the Annual Report. In terms ofSection 134(2) and 134(3)(ca) of the Act your Directors are pleased to inform that thereare no qualification reservation or adverse remark or disclaimer made by the StatutoryAuditors of the Company in their audit report for the Financial Year 2017-18.
Secretarial Audit report for the year ended March 312018:
The Secretarial Audit was carried out by Mr. Sital Prasad Swain Practicing CompanySecretary (Membership No. F6338 & CP No-6814) for the financial year 2017-18. Thereport in Form "Annexure -5" forms part to this report. In terms of Section134(3)(f) of the Act your Directors are pleased to inform that there are noqualification reservation or adverse remark or disclaimer made by the SecretarialAuditors of the Company in their audit report for the Financial Year 2017-18.
STATUTORY AUDITORS APPOINTMENT
As per Section 139 of Companies Act 2013 read with the Companies (Audit and Auditors)Rules 2014 as amended from time to time the Members of the Company in its 54thAnnual General Meeting held on 08th September 2017 approved the appointment ofM/s. Prasad Kumar & Co. Chartered Accountants (ICAI Reg. No. 008816C) as theStatutory Auditor of the Company for five consecutive financial years from 2017-18 to2021-22 subject to ratification of their appointment at every subsequent AGM if requiredunder the Act. The Ministry of Corporate Affairs has through the Companies (Amendment)Act 2017 notified certain amendments to the Companies Act 2013. Accordingly theprovisions relating to the requirement of seeking approval of the Members for ratificationof appointment of Statutory Auditors at every AGM has been omitted with effect from 7thMay 2018 and is no more a legal requirement. Accordingly the Notice convening theensuing AGM does not include any Resolution for ratification of appointment of theStatutory Auditors of the Company.
Further please note that the Statutory Auditors M/s. Prasad Kumar & Co. have giventheir consent to continue as the Statutory Auditors and a declaration that they are notdisqualified from continuing as Auditors of the Company.
In terms of Section 204 of the Companies Act 2013 and the rules framed thereunder theAudit Committee recommended and the Board of Directors appointed Mr. Sital Prasad SwainPracticing Company Secretary (Membership No. F6338 & CP No-6814) as the SecretarialAuditor of the Company in relation to the Financial Year 2018-19.
The Company has received a written consent from Mr. Sital Prasad Swain that theappointment is in accordance with the applicable provisions of the Act and rules framedthereunder.
Being a Non-Banking Financial Company the provisions of Section 148(1) of the Act withregard to the maintenance of cost records are not applicable to the Company.
31. PARTICULARS OF EMPLOYEES
Disclosure required in respect of employees of the Company in terms of provisions ofSec 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) and forms part of this report.
The Managing Director of the Company receives consultancy fees for services rendered inprofessional capacity from the Company
Pursuant to Section 197(12) of the Companies Act 2013 read with the Rule 5 of theCompanies (Appointment of Managerial Personnel) Rules 2014 no employee employedthroughout the financial year has drawn a remuneration of more than ?1.02 crores perannum and no employee employed for part of the financial year has drawn a remunerationof more than ?8.5 lakh per month.
32. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company being a non-banking finance Company registered with the Reserve Bank ofIndia is exempt from complying with the provisions of section 186 of the Companies Act2013
33. 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 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.
34. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2018 made under the provisions ofSection 92(3) of the Act is attached as "Annexure-and which forms part of thisReport.
35. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company asrequired 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.
36. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by Securities and Exchange Boardof India ("SEBI").
The detailed Corporate Governance Report of the Company in pursuance of the ListingRegulations forms part of the Annual Report of the Company. The requisite Certificate froma Practicing Company Secretary confirming compliance with the conditions of CorporateGovernance as stipulated under the Listing Regulations is attached to the CorporateGovernance Report.
37. SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings respectivelyhave been duly followed by the Company.
38. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
Your Directors confirm that there are no significant and material orders passed by theregulators or courts or tribunals that would impact the going concern status of theCompany and its future operations.
39. INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS
The Auditors of the Company have not reported any fraud as specified under the secondproviso of Section 143(12) of the Act
40. 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 and business goals.
41. 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 of sexual harassment during the financialyear 2017-18.
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 of Directors |
| ||sd/- |
| ||Rajeev Singh Dugal |
| ||Managing Director |
| ||DIN-00052037 |
| ||Sd/- |
| ||Sushil Kumar Khowala |
| ||Director |
| ||DIN-00224539 |
|Place: Jamshedpur || |
|Date: August 14 2018 || |