The Board of Directors of Suchitra Finance & Trading Co. Ltd.("your Company" or "the Company") are pleased to present the 35 AnnualReport and the Audited Financial Statements of your Company for the financial year ended31 March 2018 ("financial year under review").
The Company's financial performance for the financial year ended 31March 2018 as compared to the previous financial year ended 31 March 2017 is summarizedbelow:
(Rs. in Lakhs)
|Particulars || |
For the year ended 31st March 2018
For the year ended 31st March 2017
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|Revenue from Operations || |
|Other Income || |
|Total Revenue || |
|Less: Total Expenses || |
|Profit before Depreciation || || |
|Finance Cost & Tax || |
|Less: Depreciation || |
|Finance Cost || |
|Profit/Loss before Tax || |
|Less: Tax || |
|Profit/(Loss) after Tax || |
|Proposed Dividend || |
|Tax on proposed Dividend || |
|Transfer to Special Reserve || || |
|Fund || |
|Transfer to General Reserve || |
|Earnings Per share (Rs.) || |
Note : The above figures are extracted from the financialstatements for the financial year ended on 31 March 2018
Your Company is non-deposit taking NBFCs. Some of the key highlights ofyour Company's performance during the year under review are:
Company's Revenue from operations as on 31 March 2018 stand at Rs.2433.51/- Lakhs against Rs. 1269.91/- Lakhs recorded in the previous year.
The Net Worth of the Company increased from Rs. 7538.94 Lakhs to8162.89 Lakhs.
Profit before tax:
Profit before taxation is Rs. 1053.23 Lakhs as against Rs. 656.94 Lakhsin the last year.
Net profit after tax:
Net profit after taxation is Rs. 736.15 Lakhs as against Rs. 436.65Lakhs in the last year.
The Financial Statements of your Company have been prepared inaccordance with the Generally Accepted Accounting Principles in India (Indian GAAP) tocomply with the Accounting Standards notified under Section 211(3C) of the Companies Act1956 (which continue to be applicable in respect of Section 133 of the Companies Act 2013read with Rule 7 of the Companies (Accounts) Rules 2014) and the relevant provisions ofthe Companies Act 1956 / Companies Act 2013 as applicable and Regulation 48 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter referred to as 'SEBI Listing Regulations 2015').Accounting policies have been consistently applied except where a newly issued accountingstandard if initially adopted or a revision to an existing accounting standard requires achange in the accounting policy hitherto in use. Management evaluates all recently issuedor revised accounting standards on an ongoing basis. Your Company discloses standaloneunaudited financial results on a quarterly basis which are subjected to limited reviewand standalone audited financial results on an annual basis.
The Company's overall performance during the year under review wassatisfactory. Based on the performance your directors had the pleasure of declaringpayment of Final dividend of Rs. 1.20/- per equity shares for the financial year on 31March 2018.
TRANSFER TO RESERVES:
The Company has transferred Rs. 147.24/- Lakhs to Special Reserve interms of Section 45-IC of the Reserve Bank of India Act 1934 and the Company hastransferred Rs. 184.04/- Lakhs to General Reserve.
SHARE CAPITAL OF THE COMPANY:
The Paid up Equity Share Capital as at 31 March 2018 was Rs.93225500/- Share capital comprised of 9322550 Equity Shares with a face value Rs.10/- each. There was no increase in equity capital compared to the previous year.
CHANGES IN THE NATURE OF BUSINESS OF THE COMPANY:
The Company continues to operate in the same business of lending andreceiving loans & advances there was no change in business activity. No materialchanges of the Company occurred between end of the financial year and the date of thisreport.
Being a non-deposit taking Company your Company has not accepted anydeposits from the public / members under Section 73 of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014 during the year and within the meaning ofthe provisions of the Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Directions 2016.
SUBSIDIARIES HOLDING & ASSOCIATE COMPANIES:
Marigold Investrade Private Limited is the Holding Company and holds63.08% of the Company's Equity Share Capital as on 31 March 2018.
During the financial year under review no new Company becameSubsidiary/Joint Venture/Associate of the Company.
Based on the risks and returns associated with business operations andin terms of Accounting Standard-17 (Segment Reporting) the Company is predominantlyengaged in a single reportable segment of 'Financial Services'.
EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in MGT - 9 as provided under Section 92(3)of the Companies Act 2013 is appended to this Report as Annexure 'A'.
LISTING OF SHARES:
The Shares of the company are listed on BSE Limited and The CalcuttaStock Exchange Limited. The Company has paid the Listing Fees for the Year 2018-2019 tothe Stock Exchange.
In accordance with the Articles of Association of the Company and inview of the provisions of Section 152 of the Companies Act 2013 read with Companies(Management & Administration) Rules 2014 Mr. Vinod Kumar Sodani (DIN: 00403740)director of the Company retire at the ensuing Annual General Meeting and being eligibleoffer himself for reappointment.
The Company has received declaration from all the Independent Directorsof the Company confirming that they meet the criteria of Independent Director prescribedboth under section 149 (6) of the Companies Act 2013 and as per SEBI (Listing obligationand Disclosure Requirement) Regulations 2015.
PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN ORSECURITY PROVIDED:
The Company being a non-banking finance company registered with theReserve Bank of India and engaged in the business of giving loans is exempt fromcomplying with the provisions of section 186 of the Companies Act 2013 in respect ofloans and guarantees.
The particulars of loans guarantees and investments made underprovisions of Section 186 of the Act read with the Companies (Meetings of Board and itsPowers) Rules 2014 are given under notes to the Financial Statements which forms part ofthis Annual Report.
RESERVE BANK OF INDIA GUIDELINES FOR (NBFCS) NON BANKING FINANCIALCOMPANIES:
The Guidelines of Reserve Bank of India are being revised time andagain during the year under review. The Company has observed all the prudential normsprescribed by Reserve Bank of India.
The Company is also in compliance with the NBFC - Corporate Governance(Reserve Bank) Directions 2015.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the
Regulators or Courts that would impact the going status of the Companyand its future operations.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION:
There is no such material change and commitment affecting the financialposition of your Company which have occurred between the end of the financial year of yourCompany to which the financial statements relate and the date of the Report.
DIRECTOR'S RESPONSIBILITY STATEMENT:
To the best of our knowledge and belief and according to theinformation and explanations obtained Directors make the following statement in terms ofSection 134 (3) (c) of the Companies Act 2013:
(a) that in the preparation of the Annual Accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures if any;
(b) that the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor 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 befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
KEY MANAGERIAL PERSONNEL:
During the year under review the Company has the following persons asthe Key Managerial Personnel.
Mrs. Anjana Soni Thakur : Whole Time Director (WTD)
Mr. Govinda Soni : Company Secretary (CS)
Ms. Antima Soni : Chief Financial Officer (CFO)
FORMAL EVALUATION OF THE PERFORMACE OF THE BOARD COMMITTEES OF THEBOARD AND INDIVIDUAL DIRECTORS:
Pursuant to the provisions of Section 134(3)(p) the Companies Act 2013the Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Committees. Astructured questionnaire was prepared after taking into consideration inputs received fromthe Directors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance.
Criteria adopted for evaluation:
The Board shall evaluate the roles functions duties of IndependentDirectors (ID's) of the Company. Each ID shall be evaluated by all other directors' not bythe Director being evaluated. The board shall also review the manner in which ID's followguidelines of professional conduct.
Performance review of all the Non-Independent Directors of the companyon the basis of the activities undertaken by them expectation of board and level ofparticipation;
Performance review of the Chairman of the company in terms of level ofcompetence of chairman in steering the company;
The review and assessment of the flow of information by the company tothe board and manner in which the deliberations take place the manner of placing theagenda and the contents therein;
The review of the performance of the directors individually its ownperformance as well as evaluation of working of its committees shall be carried out by theboard;
On the basis of performance evaluation it shall be determined by theNomination and Remuneration Committee and the Board whether to extend or continue the termof appointment of ID subject to all other applicable compliances.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
The details of the number of meetings of the Board held during theFinancial Year 2017-2018 forms a part of the Corporate Governance Report.
COMMITTEES OF THE BOARD:
Currently there are five Committees which are as follows:
1. Audit Committee
2. Stakeholders Relationship committee
3. Nomination and Remuneration Committee
4. Investment Committee
5. Corporate Social Responsibility Committee
Details of all the committees along with their charters compositionand meetings held during the year are provided in the Report on Corporate Governanceforming part of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
In compliance with the provisions of Section 177(9) of the Act readwith Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation22 of the SEBI Listing Regulations the Company has formulated a vigil mechanism forDirectors and Employees. The Vigil Mechanism / Whistle Blower policy has been posted onthe website of the Company (www.sftc.co.in).
PREVENTION OF SEXUAL HARASSMENT:
Your Company has in place an appropriate policy which is in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints if any received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy.
We further state that during the financial year under review therewere no complaints received/cases filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
Your Company recognizes that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner; your Companyperiodically assesses risks in the internal and external environment along with the costof treating risks and incorporates risk treatment plans in its strategy business andoperational plans.
The Company has a Risk Management Policy (a) to ensure that all theCurrent and future material risk exposures of the company are indentified assessedquantified appropriately mitigated minimized and managed i.e. to ensure adequate systemsfor risk management process (b) to establish a framework for the company's risk managementprocess and to ensure its implementation (c) to enable compliance with appropriateregulations wherever applicable through the adoption of best practices (d) to assurebusiness growth with financial stability.
There are no risks which threaten the existence of the company.
RELATED PARTY TRANSACTIONS:
Your Company has entered into transactions with related parties asdefined under Section 2(76) of the Companies Act 2013 read with Companies (Specificationof Definitions Details) Rules 2014 which were in the ordinary course of business and onarms' length basis and in accordance with the provision of the Companies Act 2013 Rulesissued there under.
The Company's Equity Shares have been admitted to the depositorymechanism of the National Securities Depository Limited (NSDL) and also the CentralDepository Services (India) Limited (CDSL). As a result the investors have an option tohold the shares of the Company in a dematerialized form in either of the two Depositories.The Company has been allotted ISIN No. INE475D01010.
Shareholders therefore are requested to take full benefit of the sameand lodge their holdings with Depository Participants [DPs] with whom they have theirDemat Accounts for getting their holdings in electronic form.
INTERNAL FINANCIAL CONTROL:
Your Company has in place an adequate internal control systemcommensurate with the size of its operations. The Internal control system comprising ofpolicies and procedures is designed to ensure sound management of your Company'soperations safekeeping of its assets optimal utilisation of resources reliability ofits financial information and compliance. Clearly defined roles and responsibilities havebeen institutionalised. Systems and procedures are periodically reviewed to keep pace withthe growing size and complexity of your Company's operations.
During the financial year under review no material or seriousobservation has been received from the Statutory Auditors and the Internal Auditors of theCompany on such controls.
CODE OF CONDUCT:
Your Company is committed to conducting its business in accordance withthe applicable laws rules and regulations and highest standards of business ethics. Inrecognition thereof the Board of Directors has implemented a Code of Conduct foradherence by the Directors Senior Management Personnel and Employees of the Company. Thiswill help in dealing with ethical issues and also foster a culture of accountability andintegrity. The Code with revision made in accordance with the requirements of ListingRegulations has been posted on the Company's website www.sftc.co.in.
All the Board Members and Senior Management Personnel have confirmedcompliance with the Code.
The members of the Company at its Extra Ordinary General Meeting heldon 20 January 2018 appointed M/s. S. S. Rathi & Co. Chartered Accountants (FirmRegistration No. 108726W) as Statutory Auditors of the Company to hold the office of theStatutory Auditors of the Company until the conclusion of the ensuing Annual GeneralMeeting. The auditors confirmed that their appointment shall be in compliance with Section139 and 141 of the Companies Act 2013 subject to ratification at the ensuing AGM by theshareholders.
The Company had received certificate from the Statutory Auditorsconfirming their eligibility and willingness for their appointment pursuant to Section139(1) of the Act.
Pursuant to the provision of Section 138 of the Companies Act 2013read with Companies (Accounts) Rules 2014 the Board on recommendation of the Auditcommittee re-appointed M/s. Kavita Birla & Co. (M. No. 405577) Practicing CharteredAccountant Mumbai as an Internal Auditor of the Company. The Internal Auditor submits hisreports to the Audit Committee.
Based on the report of Internal Audit Management undertakes correctiveaction in their respective areas and thereby strengthens the controls. Significant auditobservations and Corrective actions thereon are presented to the Audit Committee of theBoard.
SECRETARIAL AUDIT REPORT:
Your Company appointed M/s. Reena S. Modi & Associates PracticingCompany Secretary holding membership of The Institute of Company Secretaries of India(Membership No. A-25346 Certificate of Practice No. 12621) as the Secretarial Auditor ofyour Company to conduct the Secretarial Audit pursuant to Section 204 of the CompaniesAct 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
The Secretarial Audit Report for the financial year ended 31 March2018 does not contain any qualification reservation or adverse remark or disclaimer. TheSecretarial Audit report is annexed herewith as Annexure 'B' and forms an integral part tothis Report.
EXPLANATIONS OR COMMENTS BY BOARD ON EVERY QUALIFICATION RESERVATIONOR ADVERSE REMARK OR DISCLAIMER MADE:
By the Statutory auditor in his report:
There is no qualification reservation or adverse remark or disclaimerin audit report issued by the statutory auditors of the Company.
By the company secretary in practice in his secretarial auditreport:
There is no qualification reservation or adverse remark or disclaimerin secretarial audit report issued by the company secretary in practice.
The observations of the auditors contained in their Report have beenadequately dealt with in the Notes to the Accounts which are self explanatory andtherefore do not call for any further comments.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The scope and authority of the Internal Auditfunction is defined by the Audit Committee. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board& to the Chairman & Whole Time Director.
The Internal Audit Department monitors and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company.
Based on the report of internal audit function the Company undertakescorrective action in their respective areas and thereby strengthens the controls.Significant audit observations and recommendations along with corrective actions thereonare presented to the Audit Committee of the Board.
The Company has in place adequate policies and procedures for ensuringthe orderly business including adherence to the company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation.
The Company is committed in maintaining the highest standards ofCorporate Governance and adhering to the Corporate Governance requirements set out by theSecurities and Exchange Board of India (SEBI).
All Board Members and Senior Management have affirmed compliance withthe Code of Conduct for the financial year under review. A declaration to this effectsigned by the Chief Executive Officer of the Company forms part of the CorporateGovernance Report.
The Chief Executive Officer and Chief Financial Officer have certifiedto the Board with regard to the Financial Statements and other matters as required underRegulation 17(8) of the SEBI Listing Regulations which forms part of the CorporateGovernance Report.
The Corporate Governance Report which form an integral part of thisReport are set out as a separate Annexures together with the Certificate from theAuditors of the Company regarding compliance with the requirements of Corporate Governanceas stipulated in SEBI (LODR) Regulation 2015.
MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
Pursuant to Regulation 34 of SEBI Listing Regulations the ManagementDiscussion and Analysis Report for the financial year under review is presented as aseparate section forming part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNING:
Considering the Company's activities as a non-banking finance company(NBFC) particulars with respect to the conservation of energy and technology absorptionas required to be disclosed pursuant to provision of Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are not relevant to the Company.
PARTICULARS OF EMPLOYEES:
The prescribed particulars of remuneration of employees pursuant toSection 197 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out as Annexure "C" to the Directors' Report andforms part of this Annual Report.
None of the employees have drawn remuneration more than Rs. 10 lakhsp.m. if employed for the part of the year and Rs. 120 lakhs p.a. if employed throughoutthe year.
CORPORATE SOCIAL RESPONSIBILITY:
Company was required to spend Rs. 4.73 lakhs during Financial Year2018-19 towards Corporate Social Responsibility.
The Company evaluated various options and projects like ruraldevelopment foundation improving the quality of life in rural area like backward people& adiwasi people promoting of education and other areas of activities mentioned inthe CSR Policy of the Company.
CSR amount was unspent during FY 2017-18 due to the time taken toidentify the CSR projects and identifying implementing agencies with better skills andexperience to partner for CSR activities. However the Company is in process to finalizesame and planning to spend CSR fund in the financial year 2018-19.
The disclosure required pursuant clause (0) of sub-section (3) ofSection 134 of the Companies Act 2013 and The Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is set out as "Annexure-D" forming part of this Report.
The Directors place on record their appreciation to all those peoplewho have so willingly placed their trust in the company & management and to allcustomers across all area shareholders Financial Institutions Banks Government andLocal Authorities under our operation who have given the company an opportunity to servethem.
It is worth mentioning that working with many NBFCs has been a veryencouraging experience especially in being catalyst to their sustainability and growth.The company looks forward to further strengthening the synergies.
The entire Team of the Company deserves the appreciation for theirsincere efforts and determination to excel. The core teams of the plays a pivotal role inarticulating and implementing the strategic decisions and thus contributing to thedevelopment of the company. I take this opportunity to express my heartfelt appreciationfor their continuous support hard work and dedication.
For and on behalf of the Board of Directors For Suchitra Finance &Trading Co. Ltd.
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Vinod Kumar Sodani
|Date: 30 May 2018 || |
|Place: Mumbai || |