| Dear Members,
We have pleasure in presenting the 22nd Annual Report on the business
and operations of Company and Financial Results for the year ended 31st
March, 2015.
1. FINANCIAL RESULTS
The summarized Financial Results of the Company are given hereunder :-
(Rs. In lakhs)
Particulars FY 2014-15 FY 2013-14
Total Income 139.87 140.10
Operating Profit before interest,
Depreciation & Tax 39.62 59.42
Interest and other Financial charges 0.50 0.29
Depreciation 0.31 0.47
Net Profit before Tax 38.81 58.66
Provision for Income Tax & FBT 20.87 28.97
Provision for Deferred Tax (-8.84) (-10.36)
Net Profit after Tax 26.78 40.05
Add : Balance brought forward
from previous year 506.74 509.80
Profit available for appropriation 533.52 549.85
Proposed Dividend 30.00 30.00
Corporate Tax on Dividend 5.10 5.10
Depreciation Adjustment 0.04
Balance to be carried forward 498.38 514.75
2. OPERATIONS AND BUSINESS OUTLOOK:
During the year under review, the Company recorded a total income of
Rs.139.87 lakhs and a net profit of Rs.26.78 lakhs against income of
Rs.140.10 lakhs and a net profit of Rs. 40.05 lakhs in the previous
year. The decrease in net profit is mainly due to provisioning of NPA .
However your Company is still adopting a very cautious approach towards
its business in view of the risk involved in business and probable Non
Performing Assets (NPAs).
3. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
As per the requirements Section 134(3)(I) of the Companies Act, 2013,
we want to declare that, there are no significant material changes and
commitments affecting financial position of the Company between 31st
March, 2015 and the date of Board's Report.
4. CHANGE IN THE NATURE OF BUSINESS:
As per the requirements Rule 8(5)(ii) of the Companies (Accounts)
Rules, 2014, we want to declare that, there is no significant change in
the nature of business of the Company during the last financial year.
5. SHARE CAPITAL AND CLASSIFICATION OF COMPANY:
The authorized capital of the Company as on 31st March, 2015 was Rs.
5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each.
The Subscribed, Issued and Paid-up capital of the Company as on 31st
March, 2015 was Rs.3,00,03,000/- divided into 30,00,300 equity shares
of Rs. 10/- each.
In terms of provisions of Non-Banking Financial (Non-Deposit Accepting
or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007
and as per Circular No.DnBs. PD. CC No. 128/ 03.02.059/2008-09 dated
15.09.2008 issued by Reserve Bank of India; your company has been
classified as Loan Company. The Company does not hold nor does it
accept deposits from the public.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
Annual Report.
6. DIVIDEND
During the year under review, your Directors recommended a Dividend @
10% amounting to Rs.30,00,300/- for the year ended 31st March, 2015.
This will entail an outflow of Rs.35,09,901/- (inclusive of Dividend
Distribution Tax thereon).
7. FIXED DEPOSITS:
Your Company has not accepted/invited any deposits from the public for
the year under review within the meaning of Non Banking Financial
Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998
and Section 73 of the Companies Act, 2013 and the rules made there
under.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act, 2013, Mr. Lakshmi Prasad
Gowra (DIN 00268271), Director will retire at the ensuing Annual
General Meeting and being eligible, offers himself for reappointment.
The Board recommends his re-appointment
B. APPOINTMENT
Mrs. Madhumathi Suresh (DIN 07124113) was appointed as an Additional
Director who shall hold office till the date of this Annual General
Meeting. A member proposed her candidature for appointment at the
ensuing Annual General Meeting.
In terms of the Companies Act, 2013 Mrs. Madhumathi Suresh is proposed
to be appointed as Independent Director not liable to retire by
rotation, with effect from the date of this Meeting.
Brief resume of the Directors retiring by rotation and Director, nature
of their expertise in specific functional areas and names of companies
in which they hold directorships as stipulated under clause 49 of the
listing agreement with the Stock Exchange are given as Annexure to the
Notice.
Mr. Alamuru Venkata Rama Krishna Rao was appointed as Chief Financial
Officer (CFO) w.e.f. 8th August, 2014.
C. CESSATION
During the year under review, no director resigned from the
directorship of the Company.
D. EVALUATION OF THE BOARD'S PERFORMANCE
During the year, the Board adopted a formal performance evaluation
policy for evaluating its performance and as well as that of its
Committees and individual Directors, including the Chairman of the
Board. The exercise was carried out through a structured evaluation
process covering various aspects of the Board's functioning such as
composition of the Board & committees, experience & competencies,
performance of specific duties & obligations etc. Separate exercise was
carried out to evaluate the performance of individual Directors
including the Board Chairman who were evaluated on parameters such as
attendance, contribution at the meetings and otherwise, independent
judgment etc. The evaluation of the Independent Directors and that of
the Chairman was carried out by the entire Board excluding the Director
being evaluated and the evaluation of Non-Independent Directors was
carried out by the Independent Directors. A separate meeting of
Independent Directors was also held during the year wherein the
performance of Chairman, Board, Executive Directors was evaluated.
The Directors were satisfied with the evaluation results, which
reflected the overall engagement of the Board and its Committees with
the Company.
E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement is presented in
a separate section forming part of the Annual Report. Annexure I
F. REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
attached to this report as Annexure II.
G. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declaration
stating that they meet the criteria of independence as provided under
Companies Act, 2013.
9. AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS
The Statutory Auditors of the Company, M/s. Dagliya & Co., Chartered
Accountants, Hyderabad will retire at the conclusion of ensuing Annual
General Meeting and are eligible for reappointment. They have confirmed
their eligibility under Section 141 of the Companies Act, 2013 and the
Rules framed there under for reappointment as Auditors of the Company.
As required under Clause 49 of the Listing Agreement, the auditors have
also confirmed that they hold a valid certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India.
The Statutory Auditors' Report does not contain any reservation,
qualification or adverse remark.
The Statutory Audit Report for the financial year 2014-15 is annexed
herewith as Annexure III to this Report
B. SECRETARIAL AUDITOR
The Company has appointed Mr. G. Raghu Babu, Company Secretary in
whole-time practice, Partner, R&A Associates, Hyderabad as Secretarial
Auditor. The Secretarial Audit Report for the financial year 2014-15 is
annexed herewith as Annexure IV to this Report.
The Secretarial Audit Report does not contain any reservation,
qualification or adverse remark.
C. COST AUDITOR
During the year under review, the Company was not required to maintain
cost records and get them audited by Cost Auditor.
10. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are 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 profit and
loss of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are
adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
11. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this
Annual Report. A certificate from the Auditors of the Company regarding
compliance with Corporate Governance norms stipulated under Clause 49
of the Listing Agreement is annexed to the Report on Corporate
Governance. Annexure V
12. DECLARATION FOR CODE OF CONDUCT:
Pursuant to Clause 49 of the Listing Agreement, the declaration signed
by the Managing Director affirming compliance of the Code of Conduct by
the Directors and Senior Management personnel of the Company for the
financial year 2014-2015 is annexed and forms part of the Corporate
Governance Report. Annexure VI
13. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 in respect of the employees of the
Company, will be provided upon request. In terms of Section 136 of the
Act, the Report and Accounts are being sent to the members and others
entitled thereto, excluding the information on employees' particulars
which is available for inspection by the members at the Registered
Office of the Company during business hours on working days of the
Company up to the date of the ensuing Annual General Meeting. If any
member is interested in obtaining a copy thereof, such member may write
to Company in this regard.
No employee was in receipt of remuneration in excess of the limits
prescribed under Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 and hence the
disclosure as required under Rules 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
not required.
14. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on arm's length basis and were in the ordinary
course of business. There are 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.
The Policy on materiality of related party transactions as approved by
the Board may be accessed on the Company's website. Your Directors draw
attention of the members to Notes 2.23 to the financial statement which
sets out related party disclosures.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan, given guarantee, provided security
or made investments pursuant to the provisions of Section 186 of
Companies Act, 2013.
16. DISCLOSURES:
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure
VII to this Report.
B. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Mr. T. Shankar (Chairman), Mr.
T.G.Surendranath, Mr. D.Suresh, Mr. J.A.Mohan Kumar, Mr. Gowra Surya
Prakash as members.
All the recommendations made by the Audit Committee were accepted by
the Board.
C. VIGIL MECHANISM
The Company has implemented a vigil mechanism policy to deal with
instance of fraud and mismanagement, if any. It provides for the
directors and employees to report genuine concerns and provides
adequate safeguards against victimization of persons who use such
mechanism.
There were no complaints received during the year 2014-15.
D. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met 6 times during the year. For
further details, please refer report on Corporate Governance.
E. LISTING
The equity share of the Company is listed with Bombay Stock Exchange
(BSE). There are no arrears on account of payment of listing fees to
BSE.
17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, is not applicable
since there is no such activity at present being pursued by the
Company. Annexure VIII
18. GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
a. The Company has no subsidiaries, joint ventures or associate
companies.
b. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
19. POLICY ON SEXUAL HARASSMENT:
There were no complaints/cases pursuant to the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company was not required to constitute a CSR Committee as the
Company has not met any of the thresholds mentioned in Section 135 of
the Companies Act, 2013 during the financial year under review. Hence
reporting about policy on Corporate Social Responsibility and the
initiatives taken are not applicable to the Company
21. ACKNOWLEDGEMENTS:
The Directors thank the Company's Bankers namely State Bank of India,
ING Vysya Bank Limited (now known as Kotak Mahindra Bank Ltd.), HDFC
Bank Limited and officials of concerned Government Departments for
their co-operation and continued support to the Company.
The Board would also like to thank the Company's shareholders,
customers, suppliers for the support and the confidence which they have
reposed in the management. The Board place on record its appreciation
of the contribution made by the employees at all levels for their hard
work, solidarity, co-operation and support.
For and on behalf of the Board of Directors
Sd/-
Place: Secunderabad (D.SURESH)
Dated: 31-08-2015 Chairman
(DIN : 00268394)
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