To The Members
The Board of Directors of Suchitra Finance & Trading Co. Ltd. ("yourCompany" or "the Company") are pleased to present the 36th Annual Reportand the Audited Financial Statements of your Company for the financial year ended 31stMarch 2019 ("financial year under review").
The Company's financial performance for the financial year ended 31st March 2019ascompared to the previous financial year ended 31st March 2018issummarizedbelow:
| || ||(Rs. in Lakhs) |
|Particulars ||For the year ended 31st March 2019 ||For the year ended 31st March 2018 |
|Revenue from Operations ||3306.05 ||2433.51 |
|Other Income ||NIL ||0.16 |
|Total Revenue ||3306.05 ||2433.67 |
|Less: Total Expenses ||97.88 ||96.84 |
|Profit before Depreciation Finance ||3208.17 ||2336.83 |
|Cost & Tax || || |
|Less: Depreciation ||0.00 ||0.05 |
|Finance Cost ||1887.70 ||1283.55 |
|Profit/Loss before Tax ||1320.47 ||1053.23 |
|Less: Tax ||399.70 ||317.08 |
|Profit/(Loss) after Tax ||920.77 ||736.15 |
|Earnings Per share (Rs.) ||9.88 ||7.90 |
Note: The above figures are extracted from the financial statements for thefinancial year ended on 31st March 2019.
Your Company is non-deposit taking NBFCs. Some of the key highlights of your Company'sperformance during the year under review are:
Company's Revenue from operations as on 31st March 2019stand at Rs.3306.05/-Lakhsagainst Rs.2433.51/-Lakhs recorded in the previous year.
The Net Worth of the Company increased from Rs.8162.89/-LakhstoRs.8948.79/-Lakhs.
Profit before tax:
Profit before taxation is Rs.1320.48/-Lakhsas against Rs.1053.23/-Lakhsin the lastyear.
Net profit after tax:
Net profit after taxation is Rs.920.77/-Lakhs as againstRs.736.15/-Lakhs in the lastyear.
The Financial Statements of your Company have been prepared inaccordance with theGenerally Accepted Accounting Principles in India (Indian GAAP) to comply with theAccounting Standards notified under Section211(3C) of the Companies Act 1956 (whichcontinue to be applicable in respect of Section 133 of the CompaniesAct 2013 read withRule 7 of the Companies (Accounts) Rules 2014) and the relevant provisions of theCompanies Act 1956 / Companies Act 2013 as applicable and Regulation 48 of theSecurities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements)Regulations2015 (hereinafter referredto as SEBIListing 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 auditedfinancial results on an annual basis.
Given the growth requirements of the business your Directors think it prudent toplough back the profits and therefore donot recommend any dividend on equity shares forthe financial year 2018-2019.
TRANSFER TO RESERVES:
The Company has transferred Rs.184.15/-Lakhs to Special Reserve in terms of Section45-IC of theReserve Bank of India Act 1934 and the Company hastransferredRs.230.19/-Lakhsto General Reserve.
SHARE CAPITAL OF THE COMPANY:
ThePaid up Equity Share Capital as at 31st March 2019was Rs. 93225500/-Sharecapital comprised of9322550 Equity Shareswith a face value Rs.10/-each.There was noincrease 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 businessof lending and receiving loans& advancesthere was no change in business activity. No material changes of theCompany occurred between end of the financial year and the date of this report.
Being a non-deposit taking Company your Company has not accepted any deposits from thepublic / members under Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 during the year and within the meaning of theprovisions of the Non-Banking Financial Companies Acceptance of Public Deposits (ReserveBank) Directions 2016.
SUBSIDIARIES HOLDING& ASSOCIATE COMPANIES:
Marigold Investrade Private Limited' is the Holding Companyand holds63.08%ofthe Company's Equity Share Capital as on 31st March 2019.
During the financial year under review no new Company became Subsidiary/JointVenture/Associate of the Company.
Based on the risks and returns associated with business operations and in terms ofAccounting Standard-17 (Segment Reporting) the Company is predominantly engaged in asingle reportable segment of Financial Services'.
EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in MGT-9 as providedunder Section 92(3) of the CompaniesAct 2013 is appended to this Reportas Annexure A'.
LISTING OF SHARES:
The Shares of theCompanyare listed on BSE Limited and The Calcutta Stock ExchangeLimited.
In accordance with the Articles of Association of the Company and in view of theprovisions of Section 152 of the Companies Act 2013 read with Companies (Management &Administration) Rules 2014 Mrs.Anjana Soni Thakur(DIN: 00401469) director of theCompany retire at the ensuing Annual General Meeting and being eligible offerherself forre-appointment.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of Independent Director prescribed both undersection 149 (6) of the Companies Act 2013 and as per SEBI (Listing obligation andDisclosure Requirement) Regulations 2015.
PARTICULARS OF LOANS GIVEN INVESTMENT MADE GUARANTEES GIVEN OR SECURITY PROVIDED:
The Company beinga non-banking finance company registered with the Reserve Bank ofIndia and engaged in the business of giving loans is exempt from complying with theprovisions of section 186 of the Companies Act 2013 in respect of loans and guarantees.The particulars of loans guarantees and investments made under provisions of Section 186of the Act read with the Companies (Meetings of Board and its Powers) Rules 2014 aregiven under notes to the Financial Statements which forms part of this Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators or Courts thatwould impact the going status of theCompanyand its future operations.
MATERIAL CHANGES AND COMMITMENTSIF ANY AFFECTING THE FINANCIAL POSITION:
There is no such material change and commitment affecting the financial position ofyour Company which have occurred between the end of the financial year of your Company towhich the financial statements relateand the date of the Report.
DIRECTOR'S RESPONSIBILITY STATEMENT:
To the best of our knowledge and belief and according to the information andexplanations obtained Directors make the following statement in terms of Section 134 (3)(c) of the Companies Act 2013:
(a) that in the preparation of the Annual Accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures if any;
(b) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of theCompanyat the end of the financialyear and of the profit and loss of theCompanyfor that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompanyand that such internal financial controls are adequate and were operatingeffectively.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL:
During the year under review the Company has the following persons as the KeyManagerial Personnel.
|Mrs. Anjana Soni Thakur ||:Whole Time Director (WTD) |
|Mr. Govinda Soni ||: Company Secretary (CS) & Chief Financial Officer (CFO) w.e.f. 14th November 2018 |
|Ms. Antima Soni ||: Chief Financial Officer (CFO) upto 14th November 2018 |
FORMAL EVALUATION OF THE PERFORMACE OF THEBOARD COMMITTEES OF THE BOARD AND INDIVIDUALDIRECTORS:
Pursuant to the provisions of Section 134(3)(p) the Companies Act 2013 the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. A structuredquestionnaire was prepared after taking into consideration inputs received from theDirectors 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 Independent Directors (ID's)of the Company. Each ID shall be evaluated by all other directors' not by the Directorbeing evaluated. The board shall also review the manner in which ID's follow guidelines ofprofessional conduct.
Performance review of all the Non-IndependentDirectors of theCompanyon the basisof the activitiesundertaken 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 theCompany;
The review and assessment of the flow of information by the company to the boardand manner in which the deliberations take place the manner of placing the agenda and thecontents therein;
The review of the performance of the directors individually its own performanceas well as evaluation of working of its committees shall be carried out by the board;
On the basis of performance evaluation it shall be determined by the Nominationand Remuneration Committee and the Board whether to extend or continue the term ofappointment 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 the FinancialYear2018-2019forms a part of the Corporate Governance Report.
COMMITTEES OF THE BOARD:
Currently there arefollowingCommittees which are as follows:
1. Audit Committee
2. Stakeholders Relationship committee
3. Nomination and Remuneration Committee
4. Investment Committee
5. Corporate SocialResponsibilityCommittee
Details of all the committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance forming part of thisAnnual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
In compliance with the provisions of Section 177(9) of the Act read with Rule 7 of theCompanies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the SEBIListing Regulations the Company has formulated a vigil mechanism for Directors andEmployees. The Vigil Mechanism /Whistle Blower policy has been posted on the website ofthe Company (www.sftc.co.in).
PREVENTION OF SEXUAL HARASSMENT:
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 upto redress complaints if anyreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.
We further state that during the financial year under review there were no complaintsreceived/cases filed under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner; your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk treatment plans in its strategy business and operational plans. TheCompany has a Risk Management Policy (a) to ensure that all the Current and futurematerial risk exposures of the company are indentified assessed quantifiedappropriately mitigated minimized and managed i.e. to ensure adequate systems for riskmanagement process (b) to establish a framework for the company's risk management processand to ensure its implementation (c) to enable compliance with appropriate regulationswherever applicable through the adoption of best practices (d) to assure business growthwith 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 as defined underSection 2(76) of the Companies Act 2013 read with Companies (Specification of DefinitionsDetails) Rules 2014 which were in the ordinary course of business and on arms' lengthbasis and in accordance with the provision of the Companies Act 2013 Rules issued thereunder.Thus the disclosure in AOC-2 is not required. Further there are no materiallysignificant related party transactions made by the Company with Promoters Key ManagerialPersonnel or other designated personswhich may have potential conflict with interest ofthe company at large.
TheCompany's Equity Shares have been admitted to the depository mechanism of theNational Securities Depository Limited (NSDL) and also the Central DepositoryServices(India) Limited (CDSL). As a result the investors have an option to hold the shares of theCompanyin a dematerialized form in either of the two Depositories. TheCompanyhas beenallotted ISIN No. INE475D01010.
Shareholders therefore are requested to take full benefit of the same and lodge theirholdings with Depository Participants [DPs] with whom they have their Demat Accounts forgetting their holdings in electronic form.
INTERNAL FINANCIAL CONTROL:
Your Company has in place an adequate internal control system commensurate with thesize of its operations. The Internal control system comprising of policies and proceduresis designed to ensure sound management of your Company's operations safekeeping of itsassets optimal utilisation of resources reliability of its financial information andcompliance. Clearly defined roles and responsibilities have been institutionalised.Systems and procedures are periodically reviewed to keep pace with the growing size andcomplexity of your Company's operations.
During the financial year under review no material or serious observation has beenreceived from the Statutory Auditors and the Internal Auditors of the Company on suchcontrols.
CODE OF CONDUCT:
YourCompanyis committed to conducting its business in accordance with the applicablelaws rules and regulations and highest standards of business ethics. In recognitionthereof the Board of Directors has implemented a Code of Conduct for adherence by theDirectors Senior Management Personnel and Employees of theCompany. This will help indealing with ethical issues and also foster a culture of accountability and integrity. TheCodewith revision made in accordance with the requirements of ListingRegulationshas beenposted on theCompany's website www.sftc.co.in.
All the Board Members and Senior Management Personnel have confirmed compliance withthe Code.
The members of the Company at itsAnnualGeneral Meeting held on28th September2018appointed M/s. S. S. Rathi & Co. Chartered Accountants (Firm RegistrationNo.108726W) as Statutory Auditors of the Company to hold the office of the StatutoryAuditors of the Company until the conclusion of40th Annual General Meeting. The auditorsconfirmed that their appointment shall be in compliance with Section 139 and 141 of theCompanies Act 2013 subject to ratification at the ensuing AGM by the shareholders.
The Company had received certificate from the Statutory Auditors confirming theireligibility and willingness for their appointment pursuant to Section 139(1) of the Act.In accordance with the Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting and M/s. S. S. Rathi & Co. CharteredAccountants willcontinueto act as auditor of the Company till financial Year 2022-2023.The Report given by the Auditors on the Financial Statement of the company is part of thisreport.
Pursuant to the provision of Section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the Board on recommendation of the Audit committeere-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 corrective action in theirrespective areas and thereby strengthens the controls. Significant audit observations andCorrective actions thereon are presented to the Audit Committee of the Board.
Your Company appointed M/s. Reena S. Modi & AssociatesPracticingCompanySecretaryholding membership of The Institute of Company Secretaries of India (Membership No.A-25346Certificate of Practice No. 12621) as the Secretarial Auditor of your Companytoconduct the Secretarial Audit pursuant to Section 204 of the CompaniesAct 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Secretarial Audit report is annexed herewith as Annexure B' and formsan integral part to this Report.
Inaddition to the above and pursuant to SEBI circular dated 8th February 2019 a reporton secretarial compliance by M/s. Reena S. Modi & Associates (Membership No.25346) a firm of Company Secretaries in Practice for the FY 2018-2019 has been submittedwith Stock exchanges.
EXPLANATIONS OR COMMENTS BY BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARKOR DISCLAIMER MADE:
?Reply bymanagement onthe StatutoryAuditors'report: a.
The Company in the preceding year ended 31st March 2018 had borrowed loan of Rs.100crs. from M/s Kalyan Sangam Infratech Ltd. (KSIL)and Rs.150 crs. from M/s. Sangam BusinessCreditLtd. (SBCL) group concerns of the Company for in turn advancing to M/s IL & FSTransportation Network Ltd. (IL & FSTN). As the Company was having running account ofKSIL in respect of other business transactions the loan of Rs.100 crs. borrowed from thesaid company was inadvertently credited to the said running account having debit balanceinstead of to a separate loan account. Since the said borrowing was having direct nexuswith the loans advanced as above the Company during the year under report has transferredthe said borrowings from the running account of the said company to a separate loanborrowed account which has resulted in short-term borrowings & short-term loans &advances for the year under report being higher by Rs.100 crs. Since the said runningaccount and the loan borrowed were carrying different rate of interest this correction hasresulted in profit for the year being higher by Rs. 4109589/-.
The company has rectify and accounting the Profit in current financial year.
b.The Company has Advance Loan to IL&FSTN in March 2018 of Rs.250 crores.Theinterest on loan of Rs.250 crs. advanced to IL & FSTN was receivableon quarterlybasis. The Company during the year has received interest on the said loan for the firstquarter ended 30th June 2018 and for the subsequent quarters has not received anyinterest. Though the said loan has become NPA in April 2019 i.e. in thefinancial year2019-20 the Company following the prudential norms has not recognized interestamounting to Rs. 262739726/-on the said loan from 1st July 2018. The Company hascorrespondingly not provided interest on the loans borrowed from KSIL &SBCL from July2018 amounting to Rs. 253356164/-on matching principles.
TheManagement is contemplating to Assign thisloansof Rs.250 croresadvancedtoIL&FSTNto anotherlenders/ partiesin next financial Quarter.
Reply bymanagement on theSecretarial Auditors'report:
The Company has received Notice withfineof INR 37660 including GSTforRegulation 34 ofSEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Company hasprovided the clarification on the same to theBombay Stock Exchange and the same is underconsideration.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
TheCompanyhas an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined by the Audit Committee. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board & to theChairman &Whole TimeDirector.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in theCompany its compliance with operating systems accountingprocedures and policies of theCompany.
Based on the report of internal audit function theCompanyundertakescorrective actionin their respective areas and therebystrengthensthe controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.
The Company has in place adequate policies and procedures for ensuring the orderlybusiness including adherence to the company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and thetimely preparation.
The Company is committed in maintaining the highest standards of Corporate Governanceand adhering to the Corporate Governance requirements set out by the Securities andExchange Board of India (SEBI).
All BoardMembers and Senior Management have affirmed compliance with the Code ofConduct for the financial yearunder review. A declaration to this effect signed by theChief Executive Officer of the Company forms part of the Corporate Governance Report. TheChief Executive Officer and Chief Financial Officer have certified to the Board withregard to the Financial Statements and other matters as required under Regulation 17(8) ofthe SEBI Listing Regulations which forms part of the Corporate Governance Report. TheCorporate Governance Report which form an integral part of this Report are set out as aseparateAnnexures together with the Certificate from the Auditors of theCompany regardingcompliance with the requirements of Corporate Governance as stipulated in SEBI (LODR)Regulation 2015.
MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
Pursuant to Regulation 34 of SEBI Listing Regulations the Management Discussion andAnalysis Report for the financial year under review is presented as a separate sectionforming part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING:
Considering the Company's activities as a non-banking finance company ( NBFC)particulars with respect to the conservation of energy and technology absorption asrequired to be disclosed pursuant to provision of Section 134(3)(m) of the Act read withRule 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 to Section 197 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are set out as Annexure "C" to theDirectors' Report and forms partof this Annual Report.
None of the employees have drawn remunerationmore than Rs. 10lakhsp.m. if employed forthe part of the year and Rs. 120lakhsp.a. if employed throughout the year.
CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to Section 135 of the Companies Act 2013 and the relevant rules the Boardhas constitutedthe Corporate Social Responsibility (CSR) Committee under the Chairmanshipof Mrs. Anjana Soni Thakur. The other members of the Committee are Mr. Ratan Lal Samriyaand Mr. Arjun Agal.
A detailed CSR Policy has been framed which isplaced on the Company's Website. As apart of its initiative under the CSR drive the company has undertaken CSR activities bygiving contribution to various permitted entities.
These CSR Projects are in accordance with Schedule VII of the Companies Act 2013 andthe Company's CSR Policy. Details of the CSR activities as required under Section 135 ofthe Companies Act 2013 and rules framed thereunder are given in the CSR Report framedthereunder are given in the CSR Report as AnnexureD' forming part of thisReport.
The Directors place on record their appreciation to all those people who have sowillingly placed their trust in the company & management and to all customers acrossall area shareholders Financial Institutions Banks Government and LocalAuthoritiesunder our operation who have given the company an opportunity to serve them.
It is worth mentioning that working with many NBFCs has been a very encouragingexperience especially in being catalyst to their sustainability and growth. The companylooks forward to further strengthening the synergies.
The entire Teamof the Companydeserves the appreciation for their sincere efforts anddetermination to excel. The core teams of the plays a pivotal role in articulating andimplementing the strategic decisions and thus contributing to the development of thecompany.I take this opportunity to express my heartfelt appreciation for their continuoussupport hard work and dedication.
| ||Forand on behalf ofBoardofDirectors |
| ||ForSuchitra Finance & Trading Co. Ltd. |
| ||Sd/- |
| ||Vinod Kumar Sodani Chairman |
| ||(DIN: 00403740) |
|Date:20th June 2019 || |
|Place: Mumbai || |
B/306-309 Dynasty Business Park
Opp. Sangam cinema Andheri (E) Mumbai 400059 Email id: email@example.com: www.sftc.co.in