Your Directors are pleased to present their 23rd Annual Report on thebusiness and operations of the Company together with the audited Statements of theaccounts for the year ended on 31st March 2019.
SUMMARY OF FINANCIAL PERFORMANCE:
| || |
(Amount in Rs. Lacs)
| ||Year Ended 31-03-19 ||Year Ended 31-03-18 |
|Total Revenue ||359.74 ||42.74 |
|Less: Expenses ||218.44 ||130.09 |
|Profit /(Loss) before Depreciation Amortization and Tax ||130.80 ||(87.35) |
|Less : Depreciation Amortization ||5.25 ||0.39 |
|Profit Before tax ||136.05 ||(87.74) |
|Less : Current Tax ||86.00 ||47.25 |
|Less : Deferred Tax ||68.23 ||(88.23) |
|Short/(Excess) Provision for tax for earlier years ||0.30 ||(39.67) |
|Profit/(Loss) After Tax ||(18.49) ||(7.09) |
Your Directors have not recommended any dividend.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to bebest of their knowledge confirm that -
a) in the preparation of the accounts the applicable accounting standards have beenfollowed along with proper explanations relating to material departure;
b) appropriate accounting policies have been selected and applied consistently and havemade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALSYIS
To avoid duplication of certain information in Directors' Report and ManagementDiscussion & Analysis the Board of Directors of your Company has presented thecomposite summary of performance and functions of the Company.
INDUSTRY STRUCTURE AND DEVELOPMENT:
Your Company is Non-banking Finance Company mainly engaged in the stock financing andproviding inter-corporate loans. NBFCs are strictly regulated by Reserve Bank of India byits guidelines and notifications.
As per the provisional estimates of Central Statistics Office (CSO) the Indian Economyis estimated to grow at 7% in the financial year 2081-19 as against 7.2% growth registeredin the last year. Despite marginal slow down over the last year India has cemented itscredentials as the world's fastest expanding major economy in the world. Going forwardthe economy is expected to display a better performance considering the pick-up inconsumption and private investments. Besides a low inflation expectation for financialyear 2019-20 has created further room for monetary easing by the RBI which is expected tosupport the growth momentum.
The recent elections have led to formation of a stable government at the Centre. Thegovernment is expected to carry forward the reforms agenda. It will continue to focus onbuilding infrastructure. Higher spending on roads railways airports waterways andaffordable housing will boost the economy and provide economic opportunities for citizensto grow and improve their income levels. While global economy is likely to remain muted onthe back of the ongoing trade dispute between US and China the domestic economy shouldbenefit from the government's investment momentum. In addition the government's boost torural India in the form of direct benefit transfer will give an impetus to consumption.
As far as Non-Banking Finance sector is concerned comprehensive reforms has become theneed of the day. The entire NBFC sector is facing the liquidity crunch. Recent scams insome of the NBFCs have further added the fuel in the fire with the result Banks whichused to be the main source of finance are now reluctant and extra cautious to finance theNBFCs.
The Capital Market is regulated by stringent rules and regulations of the Securities& Exchange Board of India (SEBI) and the stock exchanges. The Company beingregistered with the Reserve Bank of India as Non-Banking Finance Company (NBFC) is alsosubjected to strict rules and guidelines notified by the Reserve Bank of India from timeto time. Your Company is committed to the best Corporate Governance practices based onconscience openness fairness transparency compliances and ethical practices towardsattaining performance with integrity and accountability thereby paving the way forenhanced investors' and stakeholders' confidence. Thus ensuring long term success.
Total revenue including other operating income for the financial year ended 31stMarch 2019 was Rs.35974185/- as against Rs.4273552/- in the previous year. TheCompany earned a pre-tax profit of Rs.13604879/- as against a loss of Rs.8773528/- ayear ago. Due to higher provisions for Income Tax and Deferred Tax liabilities theCompany incurred a loss of Rs.1848957/- as against a loss of Rs.709386/- in theprevious year.
Your Directors do not propose to transfer any amount to general reserve or to ReserveFund in terms of Section 45 IC(1) of RBI Act 1934.
MATERIAL CHANGES AND COMMITMENT
There have been no material change and commitment affecting the financial position ofthe Company between the end of the financial year to which the financial statements relateand the date of this report.
OPPORTUNITY AND THREATS
The recent elections have led to formation of stable government at the centre. Thegovernment is expected carry forward the reforms agenda. Higher spending on infrastructureand affordable housing will boost the economy and improve the income of masses at alllevels. In addition the government's boost to rural India in the form of direct benefittransfer will give an impetus to consumption.
Ongoing trade dispute between US and China trade protectionism volatile crude oilprices and geopolitical disturbance are the main areas of concern.
India is the world's fastest growing major economy. Considering the pick-up inconsumption and private investments the economy is expected to display a betterperformance. Indian economy is on strong trajectory. So far as your Company is concernedthe Company is well poised to raise the finance and do not depend much on banks. Thus theCompany is better insulated from liquidity crunch being faced by the NBFCs in general.Directors of your Company are confident that all these will augur well for your Company inmedium to long term.
The Company does not have any subsidiary company.
CONSOLIDATED FINANCIAL STATEMENT:
Since the Company does not have any subsidiary company or associate or joint ventureconsolidated financial statements are not prepared.
Provisions of para C D and E of Schedule V of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 are not applicable to your Company. Hencereport on Corporate Governance is not annexed.
LOANS GUARANTEE AND INVESTMENT:
Particulars of loans and investments made by the Company pursuant to Section 186 of theCompanies Act 2013 are given in the notes to the Financial Accounts which forms part ofthe Annual Report. The Company has not given any guarantee.
Your Company has not accepted any deposits from the public its shareholders oremployees during the year under review.
TRANSACTION WITH RELATED PARTIES:
All the transactions with related parties entered into during the financial year2018-2019 were on arm's length basis and also in the ordinary course of business. Detailsof all related party transactions are placed before the audit committee. The policy onrelated party transactions as approved by the Board of Directors is placed on theCompany's website.
Since all the transactions with the related parties entered into by the Company were inordinary course of business and were on arm's length basis Form AOC-2 is not applicable.
CONSERVATION OF ENERGY ETC.
Since your Company is not engaged in any manufacturing activity information asrequired under the provisions of Section 143(3)(m) of the Act is not furnished. During theyear under review the Company neither earned nor spent any foreign exchange.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors in its meeting held on 9th January2019 asrecommended by the Nomination and Remuneration Committee re-appointed Mr. Girish Jajoo asManaging Director for a further period of five years with effect from 1stFebruary 2019. The re-appointment is subject to approval of the members of the Company.Necessary resolution is recommended in the notice convening the 23rd AnnualGeneral Meeting.
To comply with the Articles of Association of the Company and the Companies Act 2013Mr. Pramod P. Shah (DIN: 00685016) shall retire by rotation in the forthcoming AnnualGeneral Meeting and being eligible offers himself for re-appointment.
During the year under review none of the non-executive directors had any pecuniaryrelationship or transactions with the Company.
Ms. Sarita H. Jotaniya was appointed as the Company Secretary with effect from 9thJanuary 2019. The Company has the following personnel as the Key Managerial Personnel(KMP) under Section 203 of the Companies Act 2013:
1. Mr. Girish Jajoo Managing Director
2. Mr. Subhash R. Yadav Chief Financial Officer
3. Ms. Sarita Jotaniya Company Secretary.
DISCLOSURE BY INDEPENDENT DIRECTORS
All the Independent Directors have furnished declarations that they meet the criteriaof independence as laid down under Section 149 (6) of the Companies Act 2013.
The Committee presently comprises of Ms. Ankita M. Shah and Ms. Payal Shah bothIndependent Directors and Mr. Girish Jajoo Managing Director. All the members of theCommittee are having financial and accounting knowledge. The Committee met 4 times duringthe financial year 2018-19.
NOMINATION & REMUNERATION COMMITTEE/POLICY
The said Committee presently comprises of Ms. Ankita Shah and Mr. Priyesh Jhaveri bothIndependent Directors and Mr. Sandeep Shah Director. The Committee met once during thefinancial year.
The Nomination and Remuneration Policy recommended by the Nomination & RemunerationCommittee is duly approved and adopted by the Board of Directors. The said policy isannexed to the report as Annexure 1.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholder Relationship Committee consists of three members viz. Mr. Sandeep ShahChairman Ms. Ankita Shah and Mr. Girish Jajoo as its members. The Committee mainly looksinto redressal of shareholders and investors grievances with respect to transfer ofshares dematerialization of shares nonreceipt of annual report or declared dividendetc. The shareholders grievances committee met once during the year. During the year ended31st March 2019 the Company did not receive any complaint from any of itsmembers.
Six meetings of the Board were held during the year under review. One meeting of theIndependent Directors was also held during the year.
Pursuant to the provisions of the Companies Act 2013 the Board of Directors had donethe annual evaluation of its own performance its committees and individual directors. TheNomination and Remuneration Committee reviewed the performance of the individual directorson the basis of criteria such as the contribution of the individual director to the Boardand committee meetings.
The Company does not fulfill any of the three criteria specified in Section 135(1) ofthe Companies Act 2013 and as such is not required to comply with the provisions ofSection 135 of the Companies Act 2013 and Companies (Corporate Social ResponsibilityPolicy) Rules 2014.
INTERNAL CONTROL SYSTEM
Adequate internal control systems are in place to maintain quality of product properaccounting as per norms and standards prescribed asset maintenance and its proper use.The Company has an independent internal auditor who periodically reviews the accounts andreports to the Audit Committee.
The management continuously access the risk involved in the business and all outefforts are made to mitigate the risk with appropriate action. All the assets of theCompany are adequately covered by comprehensive insurance.
Relations between the management and employees were cordial through-out the year.
The particulars of employees required under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as annexure 2 and formspart of this report.
Information required under Section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Management Personnel) Rule2014 and forming part of Directors' Report for the year ended 31st March 2019 is givenin a separate annexure to this report. The said annexure is not being sent alongwith thisreport to the members of the Company in line with the provisions of Section 136 of theCompanies Act 2013. Members who are interested in obtaining these particulars may writeto the Company Secretary at the Registered Office of the Company. The aforesaid annexureis also available for inspection by the members at the registered office of the Company21 days before the 23rd annual general meeting and upto the date of the saidannual general meeting during normal business hours on working days.
According to Directors there is no adverse remarks made by Statutory Auditors in theirreport. Notes to the accounts are self explanatory to comments/observation made by theauditors in their report. Hence no separate explanation is given.
M/s. Kochar & Associates Chartered Accountants Statutory Auditors of yourCompany were appointed as Statutory Auditors by the members of the Company in their 21stAnnual General Meeting held on 26th September 2017 for consecutive five years.
The Internal Auditors Mrs. Bhavna Pandya Chartered Accountant are the internalauditors of the Company who plays an important role in strengthening the internalcontrol. The Internal Auditors reports to the Audit Committee.
During the year Secretarial Audit was carried out by Mr. Upendra C. Shukla PracticingCompany Secretary for the financial year 2018-19. The report on the Secretarial Audit isappended as Annexure 3 to this report. According to the Board of Directors the report doesnot have any adverse remark.
Provisions relating to cost audit is not applicable to your Company.
Pursuant to the provisions of Section 92(3) and Section 134 (3)(a) of the CompaniesAct 2013 a copy of the Annual Return of the Company for the year ended 31stMarch 2019 is placed on the website of the Company at www.spsfinquest.co.in.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL
No such order was passed by any of the authorities which impacts the going concernstatus and company's operations in future.
The Company has a vigil mechanism policy to deal with instances of fraud andmismanagement. The whistle blower policy is adopted by the Board of Directors and ishosted on the website of the Company.
During the year no fraud whether actual suspected or alleged was reported to theBoard of Directors.
PREVENTION OF SEXUAL HARRASSMENT AT WORKPLACE
Provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition &Redressal) Act are not applicable to the Company.
Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis may constitute forward looking statements within the meaning ofapplicable laws and regulations. Although the expectations are based on the reasonableassumption the actual results might differ.
The Directors wish to place on record their deep sense of appreciation to the Company'sBankers all the staff members for their unstinted support. Your directors also wish tothank the shareholders for confidence reposed in the management of the Company.
| ||For and on behalf of the Board |
|Mumbai ||(PRAMOD P. SHAH) |
|May 28 2019 ||CHAIRMAN |
| ||(DIN: 00685016) |