SOM DATT FINANCE CORPORATION LIMITED
Your Directors have pleasure in presenting their report on the business and operationof your Company together with the Audited Financial Statements for the year ended March31 2020.
Pursuant to the notification dated February 16 2015 issued by the Ministry ofCorporate Affairs the Company has adopted the Indian Accounting Standards (Ind AS')notified under the Companies (Indian Accounting Standards) Rules 2015 from April 01 2019and the effective date of such transition is April 01 2018. The performance of theCompany for the FY 2019-2020 is summarised below :
| || ||(Rs. in Lacs) |
|FINANCIAL RESULTS ||Year ended 31.03.2020 ||Year ended 31.03.2019 |
|Gross Total Income ||48.69 ||60.46 |
|Profit / Loss before Depreciation & Taxation ||2.74 ||23.59 |
|Less: Depreciation ||0.24 ||0.24 |
|Profit Before tax ||2.50 ||23.35 |
|Less: Provision for Income Tax ||0.54 ||2.90 |
|Add: Adjustment of tax relating to earlier periods ||11.92 ||(0.38) |
|Less: Provision for Deferred Tax ||8.51 ||3.21 |
|Add: MAT Credit Entitlement ||0.54 ||0 |
|Net Profit /(Loss) after Tax ||5.91 ||16.86 |
|Retained Earnings as at the beginning of the Year ||231.84 ||218.51 |
|Profit After Tax ||5.91 ||16.86 |
|Retained earnings before appropriations ||237.75 ||235.37 |
|Less: Special Reserve (As per RBI Guidelines) ||1.18 ||3.52 |
|Retained Earnings as at the end of the Year ||236.57 ||231.85 |
DIVIDEND AND RESERVES
During the year under review your Directors do not recommend any dividend for thefinancial year ended March 31 2020. Similarly no amount was recommended to transfer toReserves.
OPERATIONS AND STATE OF COMPANY AFFAIRS
During the year under review your Company's total Income has decreased from Rs.60.46Lacs to Rs. 48.69 Lacs and its profit after tax decreased from Rs.16.86 Lacs to Rs. 5.91Lacs.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis as required under Regulation 34(3) of SEBI (LODR)Regulations 2015 read with Schedule V of said Regulations forms part of this BoardReport.
CHANGE IN MANAGEMENT CONTROL AND SHAREHOLDING
The Acquirers i.e. Mr. Kuldip Singh Rathee and Mrs. Vijay Rathee entered into a SharePurchase Agreement dated May 11 2019 (SPA') with all the members of the promoterand promoter group of the Company namely Mrs. Usha Datt Mrs. Latika Datt Abbott Mrs.Anuradha Datt Munjal Mrs. Charu Datt Bhatia Mrs. Sadhana Singh Mrs. Anjali Anand SomDatt Enterprises Private Limited Som Datt Power Limited and Som Datt Investments andFinance Company Private Limited (Sellers') pursuant to which the Sellers hadagreed to sell and the Acquirers had agreed to purchase 6924255 equity shares of theCompany having a face value of Rs. 10 each representing 69.19% of the total issuedoutstanding and fully paid-up equity share capital carrying voting rights of the Companyfor an aggregate consideration of Rs. 101786548.50 (Rupees Ten Crores Seventeen LakhsEighty Six Thousand Five Hundred and Forty Eight and Paise fifty only) computed at Rs.14.70 (Rupees Fourteen and paise seventy only) per Equity Share.
The Company received the approval of the Reserve Bank of India for the aforesaidtransaction vide its letter dated 30/09/2019.
Pursuant to the SPA an Open Offer was made by the Acquirers i.e. Mr. Kuldip SinghRathee and Mrs. Vijay Rathee in pursuance of Regulations 3(1) and 4 of the SEBI(Substantial Acquisition of Shares and Takeover) Regulation 2011 for substantialacquisition of shares and voting rights accompanied with change in control and managementof the Company to all the public shareholders of the Company to acquire upto 2602073fully paid-up equity shares of face value of Rs. 10 each carrying voting rightsrepresenting 26.00% of the total voting equity share capital of the Company on a fullydiluted basis.
Out of Total 2602073 shares offered to be acquired by Open Offer 15395 shares weretendered by the public shareholders of the Company and acquired by the Acquirer i.e. Mr.Kuldip Singh Rathee.
After the Open Offer the Sellers sold their entire shareholding of 6924255 equityshares of the Company having a face value of Rs. 10 each representing 69.19% of the totalissued outstanding and fully paid-up equity share capital carrying voting rights of theCompany on the aforesaid consideration to the Acquirer and SPA was fully consummated on27/01/2020.
Subsequent to the above the Sellers requested their reclassification from promotercategory to public category under Regulation 31A of the SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015. An appropriate resolution seeking shareholders'approval on the matter forms part of the Notice.
DIRECTORS KEY MANAGERIAL PERSONNEL AND COMMITTEES
During the year under review the following are the changes in the Board of Directorsand Key Managerial Personnel of the Company in chronological order :
Mr. Amit Kumar Verma Company Secretary of the Company resigned w.e.f. April 30 2019.
Mr. Sandip Kumar Chaubey was appointed as Company Secretary & Compliance Officer ofthe Company w.e.f. December 12 2019. Mrs. Latika Datt Abbott Managing Director resignedw.e.f. the close of working hours of December 27 2019. Mrs. Usha Datt Director (Non-Executive) resigned w.e.f. the close of working hours of December 27 2019.
Mrs. Charu Datt Bhatia Director (Non- Executive) resigned w.e.f. the close of workinghours of December 27 2019. Mr. Satish Kumar Independent Director resigned w.e.f. theclose of working hours of December 27 2019.
Mrs. Vijay Rathee was appointed as an Additional Director and Managing Director of theCompany w.e.f. December 27 2019. Mr. Kuldip Singh Rathee was appointed as an AdditionalDirector (Non-Executive) w.e.f. December 27 2019. Mr. Rajvir Singh Chhillar was appointedas an Additional Director (Independent) w.e.f. December 27 2019. Mr. Hardeep KumarMahotra was appointed as an Additional Director (Independent) w.e.f. January 29 2020. Mr.Lalit Mohan Segat Independent Director resigned w.e.f. February 03 2020. Mr. Ankit Yadavwas appointed as Chief Financial Officer of the Company w.e.f. June 27 2020 in place ofMr. Rajeev Gautam.
An appropriate resolutions seeking shareholders' approval for appointment of Mrs. VijayRathee Mr. Kuldip Singh Rathee Mr. Rajvir Singh Chhillar and Mr. Hardeep Kumar Mahotraforms part of the Notice.
The Company has several Committees and the details alongwith its meetings have beenincluded in the Corporate Governance report.
SUBSIDIARIES ASSOCIATE AND JOINT VENTURE
The Company sold its entire investment in Som Datt Infosoft Private Limited on April24 2019 and accordingly the said company ceased to be its subsidiary company effectivesaid date. The Company in terms of the provisions of the Companies Act 2013 has noAssociate Company and/or Joint Venture Company during the year ended 31stMarch 2020.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from Independent Directors of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6) ofthe Companies Act 2013.
The evaluation of Board Committee(s) and individual Directors was carried out based onstructured questionnaire encompassing parameters such as level of engagement andcontribution independence of judgment safeguarding the interest of the Company and itsminority shareholders etc.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has in place the Vigil Mechanism / Whistle Blower Policy with a view toprovide for adequate safeguards against victimization of persons who use such mechanismand made provisions for direct access to the chairperson of the Audit Committee inappropriate or exceptional cases. The details of the Vigil Mechanism and Whistle BlowerPolicy are available on the website of the Company.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy as approved by the Board may be accessed on theCompany's website i.e. www.somdattfin.com.
MEETINGS OF THE BOARD
During the year under review Ten (10) Board Meetings were held on April 24 2019 May21 2019 May 30 2019 September 1 2019 September 13 2019 November 14 2019 November18 2019 December 12 2019 December 27 2019 February 11 2020 and four (4) AuditCommittee meetings were held on May 30 2019 September 13 2019 November 14 2019 andFebruary 11 2020. In accordance with the requirement from time to time other Committeemeetings were held. The attendance of the Directors who attended the Board Meetings andCommittees thereof have been included in the Corporate Governance Report.
CODE OF CONDUCT
The Code of Conduct laid down by the Board is in operation in the Company. All Boardmembers and senior management personnel have affirmed the compliance with the said Code.The declaration to this effect is enclosed to the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) of the Companies Act 2013 tothe best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statements that :
a. in the preparation of the annual accounts for the year ended March 31 2020 theapplicable Ind - AS accounting standards had been followed along with proper explanationrelating to material departures if any; b. the Directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit and loss of the company forthat period; c. the Directors had taken proper and sufficient care for 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; d. the Directors had prepared the annual accounts on a going concernbasis; 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 theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Pursuant to Section 186(11) (a) of the Companies Act 2013 (the Act') read withRule 11(2) of the Companies (Meetings of Board and its Powers) Rules 2014 the loan madeguarantee given or security provided in the ordinary course of business by a Non- BankingFinancial Company (NBFC) registered with Reserve Bank of India are exempt from theapplicability of provisions of Section 186 of the Act. There are no loans guarantees andsecurities granted by the Company. There are no investments made by the Company in respectof which provisions of Section 186 of the Act are applicable. The details of Investmentsmade by the Company in the ordinary course of business are furnished under Note 5 of theNotes forming part of the Financial Statements for the year ended March 31 2020.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Policy on Related Party Transactions may be accessed at the Company's website atwww.somdattfin.com. All contracts/arrangements/transactions entered into by the Companywith the related parties were on arm's length basis. The information on transactions withrelated parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 are given in Form No. AOC-2 and the same forms part ofthis report.
Disclosure related to transactions of the listed entity with person or entity belongingto the promoter/promoter group which hold(s) 10% or more shareholding in the Company havebeen disclosed in the accompanying Financial Statement of the Company. Please refer toNote No. 33 of the Financial Statement of the Company.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain Cost records under Section 148(1) of theCompanies Act 2013.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Independent Directors (IDs) on the Board of the Company are well versed with theCompany's business model and the nature of industries in which it is operating. Afamiliarization programme for IDs laid down by the Board has been posted on the Company'swebsite at www.somdattfin.com.
The detail of risks and other concerns are included in the Management Discussion andAnalysis which is the part of this Directors' Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not required to contribute for Corporate Social Responsibility.
SEXUAL HARASSMENT POLICY IN WORK PLACE
The Company is not required to constitute an Internal Complaints Committee as thenumber of employees in the Company are below the threshold limit as prescribed under theSexual Harassment of Women (Prevention Prohibition and Redressal) Act 2013.
EXTRACT OF THE ANNUAL RETURN
In terms of provision of Section 134 (3) (a) of the Companies Act 2013 the extract ofthe Annual Return as provided under Sub section (3) of the Section 92 in Form MGT-9 formspart of the Board's Report. The Annual Return may be accessed on the Company website i.e.www.somdattfin.com.
The Company has neither invited nor accepted any deposits from the public or itsemployees under Section 73 of Companies Act 2013 and rules made thereunder during theyear under review.
DETAILS OF MATERIAL CHANGES AND COMMITMENTS
There is no significant and material order after March 31 2020 passed by any ofregulators court of law or tribunals impacting the going concern status of the Company orimpacting its operations in future. However impact due to Covid 19 pandemic andconsequent lockdown has been covered in the Management Discussion and Analysis.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has an internal financial controls system commensurate with the sizescale and complexity of its operation. The details have been included in the ManagementDiscussion and Analysis which is the part of this Board's Report.
M/s. D.S. Talwar & Co. (Firm Registration No.000993N) was appointed as thestatutory auditors of the Company for a period of five consecutive years from theconclusion of 24th Annual General Meeting till the conclusion of 29th Annual GeneralMeeting to be held in the year 2022.
The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
M/s. D.S. Talwar & Co. (Firm Registration No.000993N) has furnished a certificateof their eligibility and consent under Section 139 and 141 of the Act and the Companies(Audit and Auditors) Rules 2014 for their continuance as the Auditors of the Company forthe FY 2020-21. In terms of the Listing Regulations the Auditors have confirmed that theyhold a valid certificate issued by the Peer Review Board of the ICAI.
The Auditors Report on the Audited Financial Statement of the Company for the yearended 31st March 2020 do not contain any qualification reservation or adverseremark so need not require any explanation or comment.
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 Directorshas appointed Mr. Naveen Naranag of M/s Naveen Narang & Associates Company Secretaryin practice as Secretarial Auditor of the Company to conduct the Secretarial Audit for theFinancial Year ended March 31 2020.
The Secretarial Audit Report for the Financial Year ended on March 31 2020 issued bySecretarial Auditor do not contain any other qualification reservation or adverse remarkexcept certain non-compliances pointed out in Secretarial Audit Report forming part ofthis Directors' Report under the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 made under the regime of earlier management for whichcorrective actions were already taken by the Company from time to time and the Companyalso deposited the fine imposed by the Bombay Stock Exchange and made the default good.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provision of Section 134 (3) (m) of the CompaniesAct 2013 read with Rule 8 of Companies (Account) Rules 2014 regarding conservation ofenergy technology absorption and foreign exchange earnings and outgo is given below is asunder:
|I. Conservation of energy : ||N.A |
|II. Technology Absorption : ||N.A |
|III. Foreign Exchange Earnings & Expenditure || |
|(a) Foreign Exchange Earnings : ||Nil |
|(b) CIF Value of Import : ||Nil |
|(c) Foreign Exchange Expenditure: ||Nil |
REMUNERATION AND PARTICULARS OF EMPLOYEES
During the year under review the Company had no employees on its rolls who was inreceipt of remuneration attracting the provisions of Section 197(12) of Companies Act2013 read with Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Further in the midst of the FY 2019-20 there was substantialchange in the Management of the Company such as resignation of previous Managing Directorand Company Secretary appointment of new Managing Director and Company Secretary andtherefore remuneration of the said Managing Director and Company Secretary (previous andnew both) were paid for the part of the year only. In addition to Managing Director andCompany Secretary only CFO of the Company was entitled to remuneration. Except asaforesaid no other permanent employee was on the rolls of the Company. Therefore in theaforesaid circumstances other information (such as median remuneration of employees andthe ratio of Director's remuneration to the median remuneration etc.) due tonon-availability of sufficient data are not disclosed.
Your Company is in compliance with the requirements and disclosures with respect to thereport of Corporate Governance as required under Regulation 34 read with Schedule V ofSEBI (LODR) Regulations as a listed company necessary measures are taken to comply withthe requirements of Regulations of SEBI (LODR) Regulations 2015. A report on CorporateGovernance as stated above along with a certificate of compliance from M/s Naveen Narang& Associates Company Secretaries forms part of this Board's Report.
CHANGE IN REGISTERED OFFICE OF THE COMPANY
The Company pursuant to the approval of the members accorded in the Extra OrdinaryGeneral Meeting held on December 16 2019 is in the process of shifting of registeredoffice of the Company from the State of West Bengal to the National Capital Territory(NCT) of Delhi.
The Directors wish to convey their deep appreciation for the cooperation and assistancereceived from its stakeholders valued customers suppliers banks financialinstitutions government authorities and stock exchanges. The Directors also wish to placeon record their sincere appreciation of the devoted and dedicated services rendered by allthe Employees of the Company.
Place : Gurugram Date : 27.06.2020
For and on behalf of the Board of Directors
Vijay Rathee Kuldip Singh Rathee Managing Director Director DIN-00042731 DIN- 00041032