Starteck Finance Limited
(Formerly Nivedita Mercantile & Financing Limited)
Your Directors have the pleasure in presenting the 34th Annual Report of the Company onthe business and operations of the Company together with the Audited Statement of Accountsfor the year ended 31st March 2019.
The Company's performance during the financial year ended 31st March 2019 as comparedto the previous financial year is summarized below:
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||For the year ended on 31.03.2019 ||For the year ended on 31.03.2018 ||For the year ended on 31.03.2019 ||For the year ended on 31.03.2018 |
|Revenue from operations ||1343.85 ||1794.73 ||1344.47 ||1794.85 |
|Other Income ||63.06 ||71.14 ||63.06 ||71.14 |
|Total Revenue ||1406.91 ||1865.87 ||1407.53 ||1865.99 |
|Total Expenditure ||1334.58 ||1708.46 ||1339.66 ||1714.49 |
|Profit before tax (PBT) ||72.33 ||157.41 ||67.87 ||151.50 |
|Less: Income Tax Provision || || || || |
|Current Tax ||36.85 ||38.10 ||36.85 ||38.12 |
|Excess/(Short)provision for tax ||(1.12) ||2.02 ||(1.12) ||2.02 |
|Profit before minority interest ||36.60 ||117.29 ||32.14 ||111.36 |
|Less: Minority interest ||- ||- ||- ||- |
|Profit After Tax ||36.60 ||117.29 ||32.14 ||111.36 |
|Balance brought forward from previous year ||1744.22 ||1650.39 ||1732.08 ||1643.88 |
|Surplus available for Appropriation ||1780.82 ||1767.68 ||1764.22 ||1755.22 |
|Less: Appropriations || || || || |
|Proposed equity dividend ||- ||- ||- ||- |
|Tax on proposed equity dividend ||- ||- ||- ||- |
|Statutory Reserve Fund ||7.32 ||23.46 ||7.32 ||23.46 |
|Transfer to Capital Reserve ||- ||- ||22.91 ||(0.32) |
|Surplus carried to Balance Sheet ||1773.51 ||1744.22 ||1733.99 ||1732.08 |
During the year under review the consolidated revenue from operations for the currentyear amounted to
Rs. 1344.47/-lakhs against Rs. 1794.85/- compared to the previous year. Theprofit after tax on consolidated basis stands at Rs. 32.14 /- lakhs as compared toRs. 111.36/- lakhs during the previous year.
The revenue from operations earned is Rs. 1343.85/- lakhs compared to previousyear's revenue of Rs. 1794.73/- lakhs on standalone basis. The profit after tax onstandalone basis stands at Rs. 36.60/- lakhs as compared to Rs. 117.29/- lakhsduring the previous year. During the financial year under review there has been no changein the nature of business of the Company.
To strengthen the financial position of the Company your Directors do not recommendany dividend for the period under consideration.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to reserves out of the profitsearned during financial year 2018-19.
During the year under review the Company has not allotted any Equity Shares thus thepaid up Equity Share Capital of the Company remains the same i.e. 9910330 equity sharesof Rs. 10/- each. Also the Company has not issued shares with differential votingrights and sweat equity shares.
Your Company being a Non-Deposit Accepting NBFC has not accepted any deposits frompublic within the meaning of the provisions of the Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions 1998 or under Chapter V of theCompanies Act 2013 (hereinafter referred to as "the Act").
REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The Company has 2 Subsidiaries i.e. V Can Exports Private Limited and Chitta FinleasePrivate Limited. There are no associate companies or joint venture companies within themeaning of section 2(6) of the Companies Act 2013.
The consolidated financial statements of the Company and its subsidiaries prepared inaccordance with applicable accounting standards issued by the Institute of CharteredAccountants of India forms part of this Annual Report. Pursuant to the provisions ofSection 136 of the Companies Act 2013 the Financial Statements of the CompanyConsolidated Financial Statements along with relevant documents and separate annualaccounts in respect of the subsidiaries are available on the website of the Company andcan be accessed at the web-link www.starteckfinance.com.
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
The annual accounts of the subsidiaries and related detailed information will also beavailable for inspection at the Registered Office of the Company during working hours uptothe date of the Annual General Meeting.
A statement containing the salient features of the financial statement of thesubsidiaries in prescribed form AOC-1 as Annexure A is attached to thisReport.
As required under Regulations 16(1)(c) and 46 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as "Listing Regulations") the Board has approved and adoptedthe Policy for determining Material Subsidiaries. The Policy has been amended in line withthe amendments made to the SEBI Listing Regulations. The Policy is available on theCompany's website at www. starteckfinance.com/codes-or-policies.html.
MATTERS RELATING TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on 31st March 2019 the Company has three (3) Directors out of which two (2) areIndependent Directors who provide valuable guidance to the Management of the Company onvarious aspects of the Company's business operations. The Board has an optimum combinationof executive and non-executive directors with one woman director and more than fifty percent of the Board comprising of non-executive independent directors.
Ms. Lalitha Cheripalli (DIN: 07026989) Director of the Company retires by rotation andbeing eligible offers herself for reappointment. Ms. Shreya Shetty resigned as CompanySecretary of the Company on 30th May 2019. Further Ms. Sweta Gupta was appointed asCompany Secretary effective from 30th May 2019. Mr. Anand Shroff was appointed as ChiefFinancial Officer of the Company with effect from 30th May 2019.
DECLARATIONS BY INDEPENDENT DIRECTORS
The Company had received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of Independence' as prescribed under Section149(6) of the Act and have submitted their respective declarations as required underSection 149(7) of the Act and Regulation 16(1) of the Listing Regulations that they arenot aware of any circumstance or situation which exists or is anticipated that couldimpair or impact their ability to discharge their duties with an independent judgement andwithout any external influence as required under Regulation 25 of the Listing Regulations.
DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES
Number of Meetings of the Board of Directors
The Board meets at regular intervals to discuss and decide on the Company's performanceand strategies. During the financial year under review the Board met 4 (Four) times. TheMeetings of the Board were held on 18th May 2018 13th August 2018 26th October 2018and 1st February 2019. Further details on the Board Meetings are provided in theCorporate Governance Report which forms part of this Annual Report.
The Directors actively participated in the meetings and contributed valuable inputs onthe matters brought before the Board of Directors from time to time.
The Board has constituted the Audit Committee Nomination and Remuneration CommitteeStakeholders' Relationship Committee Corporate Social Responsibility Committee of theBoard with specific terms of reference as per the requirements of the Listing Regulationsand the Act and they make specific recommendations to the Board on matters within theirareas or purview. The details with respect to the composition powers roles terms ofreference Meetings held and attendance of the Directors at such Meetings of the relevantCommittees are given in detail in the Report on Corporate Governance of the Company whichforms part of this Annual Report.
Additionally during the year under review the Independent Directors held a separatemeeting in compliance with the requirements of Schedule IV of the Act and Regulation 25(3)of the Listing Regulations.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act and to the best of their knowledge and belief andaccording to the information and explanations obtained from the Management the Directorsof your Company state that:-
n in the preparation of the annual Accounts the applicable Accounting Standards havebeen followed and there were no material departures from the same;
n 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 on 31st March 2019 and ofthe profits of the Company for the year ended on that date;
n proper and sufficient care was 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;
n the annual Accounts of the Company have been prepared on a going concern basis;
n internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
n proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
ANNUAL EVALUATION OF DIRECTORS BOARD AND COMMITTEES
A formal evaluation mechanism has been adopted for evaluating the performance of theBoard the Committees thereof individual Directors and the Chairman of the Board. Theevaluation is based on criteria which include among others providing strategicperspective integrity and maintenance of confidentiality and independence of judgmentChairmanship of Board and Committees attendance time devoted and preparedness for theMeetings quality quantity and timeliness of the flow of information between the BoardMembers and the Management contribution at the Meetings effective decision makingability monitoring the corporate governance practices role and effectiveness of theCommittees and effective management of relationship with stakeholders. The Directorscompleted questionnaires providing feedback on functioning of the Board Committees andChairman of the Board.
The Nomination and Remuneration Committee also reviews the performance of the Board ofDirectors at such regular intervals as may be necessary on the basis of performanceevaluation indicators.
Further independent directors of the Company met on 1st February 2019 to discuss andreview:
report on performance evaluation for the year 2018-19 of the Board; performance of nonindependent directors and the Board as a whole;
performance of the Chairperson of the Company taking into account the views ofexecutive director and non executive directors; and
the quantity quality and timely flow of information between the Management and theBoard and found it to be in line with the expectations.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has a duly constituted Nomination and Remuneration Committee("NRC") with its composition quorum powers role and scope in line with theapplicable provisions of the Act and Listing Regulations.
The policy inter alia provides the (a) criteria for determining qualificationspositive attributes and independence of directors and (b) policy on remuneration fordirectors key managerial personnel and other employees. The policy is directed towards acompensation philosophy and structure that will attract retain and motivate talent andprovides for a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals.
The NRC has formulated a policy on remuneration under the provisions of Section 178(3)of the Act and the same is uploaded on the website of the Company atwww.starteckfinance.com/codes-or-policies.html
PARTICULARS OF EMPLOYEES
During the Financial Year 18-19 there were no persons employed for whole or part ofthe financial year who were in receipt of remuneration of not less than Rs. 8.5lakhs p.m.
Details required under the provisions of section 197(12) of the Act read with rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will bemade available to any member on request as per provisions of section 136(1) of the Act.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India have been complied with.
The Company has a whistle blower policy encompassing vigil mechanism pursuant to therequirements of the section 177(9) of the Act and regulation 22 of the ListingRegulations. The policy enables directors and employees to report to the Managementgenuine concerns about unethical behavior actual or suspected fraud or violation of Codeof Conduct and Ethics and leakage or suspected leakage of unpublished price sensitiveinformation. It also provides for adequate safeguards against victimization of employeeswho avail of the whistle blower mechanism and allows direct access to the Chairperson ofthe Audit Committee in exceptional cases.
The Whistle Blower Policy of the Company is placed on the website of the Companywww.starteckfinance.com/ codes-or-policies.html. During the year none of the employeeshave been denied access to the Audit Committee under this policy.
RISK MANAGEMENT POLICY
The Board of Directors have adopted a risk management policy for the Company whichprovides for identification assessment and control of risks which in the opinion of theBoard may threaten the existence of the Company. The Management identifies and controlsrisks through a properly defined framework in terms of the aforesaid policy.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered into by the Company during the yearwith related parties were in the ordinary course of business and on an arm's length basis.
Pursuant to Section 134 (3) (h) read with Rule 8 (2) of the Companies (Accounts) Rules2014 there are no transactions to be reported under Section 188 (1) of the Companies Act2013. Accordingly the disclosure of Related Party Transactions as required under Section134 (3) (h) of the Act in Form AOC-2 is not applicable to the Company.
The Policy on Related Party Transactions is in line with the revised ListingRegulations and the same is uploaded on the Company's website at the web-link:www.starteckfinance.com.
Details on transactions with related parties are provided in notes to financialstatements.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company being a non-banking financial company registered with the RBI and engagedin the business of giving loans is exempt from complying with the provisions of section186 of the Act in respect of loans and guarantees. Accordingly the disclosures of theloans given as required under the aforesaid section have not been made in this Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and the date of thisreport.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
During the year under review there were no significant material orders passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.
INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The internal financial controls of the Company are commensurate with its size scaleand complexity of operations. The Company has adopted policies and procedures to ensureintegrity in conducting business safeguarding of its assets timely preparation ofreliable financial information accuracy and completeness in maintaining accountingrecords and prevention and detection of frauds and errors.
The internal financial controls with reference to the financial statements wereadequate and operating effectively.
Pursuant to the provisions of 139(2) of the Act the term of M/s. Bagaria & Co.LLP Chartered Accountants Statutory Auditors of the Company will conclude at theupcoming Annual General Meeting of the Company. The Board has recommended the appointmentof M/s. Lodha & Co. Chartered Accountants (Firm Registration No. 301051E) asStatutory Auditors of the Company from the conclusion of the 34th Annual General Meetingto the conclusion of the 39th Annual General Meeting of the Company.
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors in their audit reports on the financial statements for the year ended 31st March2019.
During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported any instances of frauds committed in the Company by its Officers orEmployees to the Audit Committee under Section 143(12) of the Companies Act 2013.
Pursuant to the provisions of section 204 of the Act the Board has re-appointed Mr.Veeraraghavan N. Practising Company Secretary (Membership No. A6911) to undertakesecretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is attached to thisReport as Annexure B. In respect of the observation made by the auditor in thereport Directors would like to state that the Company has appointed Mr. Anand Shroff asChief Financial Officer of the Company with effect from 30th May 2019. Further theCompany is in process of appointing Whole Time Director of the Company.
COST RECORDS AND COST AUDITORS
The provisions of Cost Audit and Records as prescribed under Section 148 of the Actare not applicable to the Company.
The Company has in place an adequate internal audit framework to monitor the efficacyof internal controls with the objective of providing to the Audit Committee and the Boardof Directors an independent objective and reasonable assurance on the adequacy andeffectiveness of the organisation's risk management control and governance processes. TheCompany has appointed M/s. N Somani & Co. (Firm Registration No. 139934W) CharteredAccountants as Internal Auditor of the Company. Findings of the Internal Auditor areplaced before Audit Committee which reviews and discuss the actions taken with theManagement.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Act the Company has a Corporate SocialResponsibility ("CSR") Committee. The CSR Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy ("CSRPolicy") indicating the activities to be undertaken by the Company which has beenapproved by the Board. The CSR Policy is available on the Company's website atwww.starteckfinance.com/codes-or-policies.html
Further details on the CSR Committee are provided in the Corporate Governance Reportwhich forms part of this Annual Report. As the net profit of the Company during financialyear 17-18 was below Rs. 5 crores the Company was not required to spend any amounttowards CSR during the financial year under review. However the Company has spent Rs. 803200 towards CSR activities during the financial year 2018-19. The AnnualReport on CSR activities is annexed herewith as Annexure C.
EXTRACT OF ANNUAL RETURN
The extract of annual return as provided under section 92(3) of the Act in theprescribed form MGT-9 is annexed to this Report as Annexure D and is also availableon the Company's website at www.starteckfinance.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of activities the Company is engaged into the Company is notrequired to furnish information as required under the provisions of section 134(3) (m) ofthe Act read with the rule 8(3) of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption.
Foreign Exchange Earnings and Outgo are as follows:
|i) Foreign Exchange Earned: ||NIL |
|ii) Foreign Exchange Outflow: ||NIL |
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Company has in place an appropriate policy which is in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013. An Internal Complaints Committee has been set up to redress complaints if anyreceived regarding sexual harassment of women. We further state that during the financialyear under review there were no complaints received/cases filed under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Corporate Governance Report as stipulated under Regulation 34(3) read with ScheduleV of the SEBI Listing Regulations forms an integral part of this Annual Report. Therequisite certificate from the Statutory Auditors of the Company confirming compliancewith the requirements of Corporate Governance forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis report has been separately furnished in theAnnual Report.
Your Directors would like to express their sincere appreciation and gratitude for thesupport and co-operation from its shareholders bankers regulators and other businessconstituents.
Your Directors also wish to place on record their appreciation for the commitment andhard work put in by the Management and the employees of the Company.
For and on Behalf of the Board of Directors
|Gautam Panchal ||Sudarshan Somani |
|Director (DIN: 07826634) ||Director (DIN: 00137568) |
|Lalitha Cheripalli || |
|Director (DIN: 07026989) || |
Date: 30th May 2019