| The Directors hereby present their Thirtieth Annual Report together
with the Audited Financial Statements of the Company for the year ended
31ot March 2015.
FINANCIAL RESULTS
(Rs. in Lakhs)
For the For the
year ended year ended
31-3-2015 31-3-2014
Gross Income 108 43
Less: Expenditure 6678 5803
Less: Depreciation 5 6
Gross Profit/(Loss) (6575) (5766)
Less Exceptional items 109 50
Profit/(Loss) before tax (6466) (5716)
Tax Expense relating to earlier
years 76 -
Profit/(Loss) after tax (6542) (5716)
Add Depreciation of earlier years 2 -
Profit/(Loss) after Depreciation for (6544) (5716)
earlier years
Add Balance brought forward from (78640) (72924)
earlier years
Loss carried to Balance Sheet (85184) (78640)
In view of the losses the question of transfer of any amount to
reserves does not arise.
DIVIDEND
In view of the continued losses, your Directors regret their inability
to recommend any dividend on the Preference or Equity Shares.
INDUSTRY STRUCTURE, OPERATIONS AND DEVELOPMENT
There was improvement in the economy especially due to the growth of
the services sector and a moderate growth in the manufacturing sector
which resulted in improved GDP compared to the previous year with the
inflation in moderate terms towards the later part of the year which
helped fundamentally strong financial companies to register growth.
However, your Company could not cash in on the above positive
background as it could not engage in any significant business activity
primarily due to the cancellation of the Certificate of Registration as
a Non-Banking Financial Company by the Reserve Bank of India and
difficulty in entering into new business of non- banking non finance
due to lack of funds and consequently your Company does not fall under
any industry structure. The Company however has financial services as
its main activity in its Memorandum of Association. The Board of
Directors have, in the absence of the required financial support from
the Banks and also due to ongoing recovery suits filed by them before
various Debt Recovery Tribunals, have not been able to implement any
viable Business Plan. This has resulted in continued losses and caused
a tremendous pressure on the Company to meet operational expenses and
payment of liabilities.
The Debt Recovery Tribunals have passed decrees in favors of the Banks
and Financial Institutions in most of the cases filed by them for
realization of their outstanding dues. Pursuant thereto, Recovery
Officers have taken over possession of the Company's properties,
charged to these Banks and Financial Institutions and have also
disposed them off except 3 properties.
OPPORTUNITIES, THREATS, RISKS, CONCERNS, PERFORMANCE AND OUTLOOK
Though there is scope and opportunity for the Company to engage in
constructive and profitable business activities in view of its
experience and the promising outlook in the economy but lack of
financial resources is preventing it from taking up any new measures to
revive it. There is therefore a great amount of uncertainly regarding
future outlook of the Company though your Directors are striving hard
to take effective steps. Acute shortage of funds faced by the Company
in the past is likely to continue at least in the near future unless
there is capital infusion coupled with a restructuring exercise. The
accumulated losses is a cause for concern which dissuades stake holders
from participating in a restructuring exercise
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has in place an established internal control system
designed to ensure proper recording of financial and operational
information and compliance of various internal controls and other
regulatory and statutory compliances. Self certification exercise is
also conducted by which senior management certifies effectiveness of
the internal control system of the Company. Internal Audit has been
conducted throughout the organization by qualified Internal Auditors.
Findings of the internal Audit Report are reviewed by the top
Management and by the Audit Committee of the Board and proper follow up
action are ensured wherever required. The Statutory Auditors have
evaluated the system of internal controls of the Company and they have
reported that the same are adequate and commensurate with the size of
the Company and nature of its business.
DISCUSSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONS
Your attention is drawn specifically to the issues mentioned
hereinbefore under the head 'Industry Structure, Operations and
Development' and to the comments under the head 'Opportunities,
Threats, Risks, Concerns, Performance and Outlook' hereinbefore. Your
Company's financial position is under extreme stress and needs a
concerted effort from creditors, shareholders and third parties for any
significant positive turnaround to emerge in the long run.
Subsidiary Company
The Company has prepared a Consolidated Financial Statement of the
Company and its subsidiary namely Samudra Securities Limited in the
form and manner as that of the Company in accordance with the
provisions of Section 129 (3) of the Companies Act, 2013, the Rules
made there under and in compliance with the applicable accounting
standards and the listing agreement with the Stock Exchanges which has
been duly audited by the Statutory Auditors of the Company. The
Consolidated Financial Statement form part of this Report and the same
shall be laid before the Annual General Meeting while laying the
financial statements of the Company. A Report on the performance and
financial position of the Subsidiary Company in form AOC-1 forms a part
of the Consolidated Financial Statement
In terms of Clause 49 of the Listing Agreements with the Stock
Exchanges Samudra Securities Limited is a material subsidiary. As per
the aforesaid Clause 49 the policy of the Company for determining
material subsidiaries is posted on the website of the Company and may
also be accessed at the link http://cflltd.in
Vigil Mechanism Policy/Whistle Blower Policy
In compliance with the provisions of Section 177(9) of the Companies
Act, 2013 and Clause 49 of the Listing Agreement, the Company has
framed a vigil mechanism policy and system of vigil mechanism to deal
with instances of fraud and mismanagement, if any, and concerns about
violation of Company's policies. The details of the Vigil Mechanism
and Whistle Blower Policy are also posted on the website of the Company
and may be accessed at the link http://cflltd.in
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Considering the nature of your Company's activities during the year
under review your Company did not consume energy of any significant
level nor there was much scope for taking any measures for energy
conservation, research and development, technology absorption, and
making any additional investment for the above purposes and no comment
is made in this regard. There has been no foreign exchange earnings or
outgo during the year under review.
Public Deposits
The Company had repaid all deposits which were claimed by the deposit
holders in terms of the Schemes sanctioned by the Hon'ble Company Law
Board except 3,624 deposits with a principal amount of Rs.4,41,63,804
and a maturity amount of Rs.5,43,90,485 which were not claimed by the
deposit holders in spite of the Company sending reminders to them at
periodic intervals. The unclaimed deposits are being paid as and when
the same are claimed and an amount of Rs.000 has been paid since 310t
March, 2015.
Number of meetings of the Board of Directors
There were 6 meetings of the Board of Directors held during the
financial year 2014-15 and the details are mentioned in the Corporate
Governance Report attached to this Report.
Directors' Responsibility Statement
Pursuant to Section 134(3) ( c ) of the Companies Act, 2013, the
Directors to the best of their knowledge and belief and according to
the information and explanations obtained confirm that:
(i) in the preparation of the Annual accounts for the year ended 31ot
March, 2015, the applicable accounting standards had been followed
along with proper explanations relating to material departures, if any;
(ii) they had selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the loss of the
Company for that period;
(iii) they had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) the Accounts had been prepared on a going concern basis;
(v) proper financial controls were in place and that the financial
controls were adequate and were operating effectively and
(vi) proper systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
Declaration by Independent Directors
Mr B N Tripathi, Mr Sujit Datta and Mr A V Sudhakaran are Independent
Directors on the Board of the Company. The Company has received
declarations from all the Independent Directors of the Company
confirming that they meet with the criteria of Independence as
prescribed both under the Companies Act, 2013 and Clause 49 of the
Listing Agreement.
Audit Committee
The Audit Committee of the Board of Directors consist of Mr Sujit
Datta, Mr.B N Tripathi and Mr A V Sudhakaran and the Company Secretary
is the Secretary of the Committee. The Managing Director, Chief
Financial Officer and Auditors are permanent invitees to the Committee
meetings. The details of terms of reference of the Committee, number
and dates of meetings held and other details are given separately in
the Corporate Governance Report. Your Company has a well structured
internal audit system commensurate with its size and operation. During
the year there was no occasion when the Board had not accepted the
recommendations of the | Audit Committee
Stakeholders' Relationship Committee
The Company has a Stakeholders' Relationship Committee for reviewing
the complaints of investors in the Company. The members of the
Committee are Mr.Sujit Datta, Mr.H C.Mathur and Mr A V Sudhakaran The
number of meetings held and other details are given separately in the
Corporate Governance Report.
Corporate Social Responsibility
The provisions of the Companies Act, 2013 regarding Corporate Social
Responsibility are not applicable to the Company due to continuous
losses suffered by the Company.
Nomination and Remuneration Committee
The Company has a Nomination and Remuneration Committee consisting of
Mr A V Sudhakaran, Mr B N Tripathi and Mr Sujit Datta as its members.
The details of terms of reference of the Committee and number of
meetings held and the brief outline of the remuneration policy of the
Company are given separately in the attached Corporate Governance
Report. The Company Secretary acts as the Secretary of the Committee.
Directors
Mr H C Mathur was re-appointed as Managing Director of the Company for
a further period of one year with effect from 1ot May, 2015, subject to
the approvals of the shareholders and the Central Government on the
expiry of his earlier term on 30th April, 2015. Necessary Special
Resolution has been proposed in the Notice of the Annual General
Meeting for this purpose.
As per the provisions of the Companies Act, 2013 and the revised
Corporate Governance stipulations of the Stock Exchanges it was
necessary to appoint a woman director on the Board of Directors of the
Company. The Board has accordingly appointed Mrs.Jostna Shrestha as an
Additional Director of the Company with effect from 31st March, 2015
who will vacate her office at the ensuing Annual General Meeting
pursuant to Section 161 of the Companies Act, 2013. The Company has
received a notice from a member under section 160(1) of the Companies
Act, 2013 proposing Mrs JostnaShreshtaas a candidate for the office of
Director of the Company.
As per Section 149 and other applicable provisions of the Companies
Act, 2013 your Directors are seeking re-appointment of Mrs Jostna
Shreshta as an Independent Director of the Company to hold office for a
term of five consecutive years up to the conclusion of Thirty-fifth
Annual General Meeting of the Company. Details of the proposal for her
appointment are mentioned in the Explanatory Statement set out in the
annexed Notice.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination and
Remuneration and other Committees. The manner in which the evaluation
has been carried out has been explained in the Corporate Governance
Report.
Risk Management
Risk Management is the process of identification, assessment and
prioritization of risks followed by coordinated efforts to minimize,
monitor, mitigate and control the probability and/or impact of
unfortunate events or to maximize the realization of opportunities. The
procedures are reviewed to ensure that executive management controls
risk through means of a well thought framework. The Company has
appointed a Risk Management Committee in terms of the requirement of
the provisions in the Listing Agreement with the Stock exchange
regarding Corporate Governance and the members of the Committee are Mr
Sujit Datta, Mr H C Mathur and Mr A V Sudhakaran.
Particulars of employees and key managerial personnel (KMP)
The following are the Key Managerial Personnel of the Company in terms
of Section 203 of the Companies Act, 2013:
Pursuant to Section 134 (3) (q) read with Rule 5 of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 the
details of Key Managerial Personnel required to be furnished as per the
said Rules are annexed to this Report. There were no employees who were
drawing remuneration in excess of the limit provided in Rule 5 (2) of
the aforesaid Rules
Details of significant and material orders passed by the Regulators,
Courts and Tribunals
No significant and material order has been passed by any Regulator,
Court or Tribunal impacting the going concern status and Company's
operation in future
Particulars of Loans, Guarantee or Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the financial statements.
Related Party Transactions
All related party transactions that were entered into during the
financial year were on arms' length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company with promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large. All
related party transactions are placed before the Audit Committee and
given in the notes annexed to and forming part of this Financial
Statement.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form
MGT 9 as required under Section 92 of the Companies Act, 2013 are
annexed to this Report.
Corporate Governance
In accordance with the requirements of the Listing Agreements with the
Stock Exchanges, a Report on Corporate Governance along with a
certificate of the Auditors confirming compliance is set out in the
Annexure forming part of this Annual Report
Human Resources
The Company's relations with the employees continued to be cordial.
Efforts to maximize utilization of scarce resources was a continuous
process throughout the year. The Company received some innovative ideas
from a few employees for achieving greater efficiencies, cost control
and recoveries and those with substance are being implemented.
Auditors and Audit Report
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the rules framed there under Messrs Tarmaster & Co., Chartered
Accountants, (Firm Registration No.302016E) were appointed as the
Statutory Auditors of the Company by the Shareholders on 29th
September, 2014 at the Twenty ninth Annual General Meeting of the
Company to hold office till the date of the Thirty second Annual
General Meeting, subject to ratification of their appointment at the
thirtieth and thirty first Annual General Meetings. Accordingly a
Resolution seeking Members ratification for their appointment is
included in item 2 of the Notice convening the Annual General Meeting.
Regarding comments of the Auditors regarding non compliance of the Non-
Banking Financial (Deposit Accepting or Holding) Companies Prudential
Norms(Reserve Bank) Directions, 2007 and the Company not being able to
maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by the
aforesaid
Directions the comments of the Board are as under:
The Company's net worth had become negative in March, 2002 due to
continued losses. Later Reserve Bank of India cancelled the NBFC
Registration. Hence the maintenance of CRAR and other compliances of
the Directions are no more applicable to the Company.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
Messrs Ranjit Ghosh & Co., Company Secretaries (Membership No.FCS 3724)
were appointed to carry out a secretarial audit of the Company. The
Secretarial Audit Report is attached in the Annexure forming part of
this Annual Report. As regards the comments of the Secretarial Audit
Report your Board's reply is as follows:
1) The Company could not increase the minimum public shareholding due
to the distressing financial position of the Company which in turn has
rendered it extremely difficult to plan any exercise in this regard due
to the anticipated reluctance of the public to take up Promoters shares
for divestment and the non feasibility of making a further issue of
shares to the public.
2) The Company's application to National Stock Exchange of India for
delisting its Equity Shares is still pending for which no reasons have
been furnished to the Company in spite of numerous complaints to the
Exchange and to the concerned Regulator and hence the Company has
withheld the payment of listing fees to the said Exchange.
ACKNOWLEDGEMENT
Your Directors wish to record their appreciation of the encouragement,
support, assistance and co-operation received from the Company's
bankers, financial institutions, shareholders, depositors and employees
throughout the year
For and on behalf of the Board
(H.C.Mathur) (Sujit Datta)
Managing Director Director
(DIN: 00054757) (DIN:00337464)
Kolkata
Dated: 27th May, 2015
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