Directors' Report To The Members of Golden Goenka Fincorp Limited, Your Directors have pleasure in presenting the 22nd Annual Report together with the Audited Accounts for the year ended 31st March, 2015. 2. OPERATIONS & BUSINESS ACTIVITIES The key highlights of your Company's performance during the year under review are: i. The profit before bad debts, provisions and tax is Rs. 923.85 Lacs as against Rs. 100.64 Lacs in the last year. ii. Profit before taxation is Rs. 858.62 Lacs as against Rs. 84.65 Lacs in the last year. iii. Net profit after taxation is Rs. 576.57 Lacs as against Rs. 73.17 Lacs in the last year. iv. The total assets is Rs. 21627.41 Lacs as against Rs. 15508.43 Lacs in the last year. The Financial Statements of your Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the relevant provisions of the Companies Act, 1956 / Companies Act, 2013, as applicable. Your Company discloses Standalone Unaudited Financial Results on a quarterly basis, Standalone Audited Financial Results on an annual basis and Consolidated Audited Financial Results on an annual basis. During the year under review, Your Company had allotted 12,12,37,929 fully paid-up equity shares on rights basis in the ratio of 9:5. Your Company intends to expand into financial market segment and capitalize the set up for the same along with increasing capacity as required by the business. For the purpose of diversification your Company engaged in the expansion of its business of vehicle loan and consumer loan etc. A detailed review on the operation and performance of the Company and its business is given in the Management Discussion Analysis Report. The same is enclosed as Annexure -1 to this Report. 3. DIVIDEND The Directors of your Company do not recommend any dividend for the financial year ended 31st March, 2015 in order to plough back the resources for future growth. 4. FIXED DEPOSIT The Company is a non-deposit taking Non Banking Financial Company and therefore has not accepted any public deposit during the year. 5. LISTING OF SHARES The equity share of the Company continues to be listed on BSE Limited and The Calcutta Stock Exchange Limited. The Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2015-16. Your Company has applied to National Stock Exchange of India Ltd (NSE) for listing of its entire equity shares on the main Board of NSE. The same is under consideration of NSE. 6. REDEMPTION OF NON CONVERTIBLE DEBENTURES During the year under review, pursuant to the approval of the holders of 5,00,000, 12.75 % Rated, Secured, Taxable, Redeemable, Non-Convertible Debenture(s) (NCDs) at their meeting held on 17th June, 2014 for redemption of entire 5,00,000 NCDs issued by the Company before the scheduleredemption date i.e, 6th March, 2017, in one or more tranches, the Company has redeemed the aforesaid NCDs in full along with the interest accrued thereon upto the date of the redemption. Hence the said debentures ceased to exist. 7. RESERVE BANK OF INDIA (RBI) GUIDELINES Your Company continues to carry on its business of Non Banking Financial Institution without accepting deposits. The Company has complied with and continues to comply with all the prudent financial management norms and directions issued by Reserve Bank of India as applicable to it including Fair Practices, Anti Money Laundering and Know Your Customer (KYC) Guidelines. 8. ALLOTMENT OF SHARES As reported earlier, the Board of Directors of your Company at its meeting held on 3rd May, 2014 has allotted 12,12,37,929 Equity Shares of face value of Rs. 5/- each at a premium of Rs. 4/- per Equity Share issued on rights basis in accordance with the basis of allotment of the equity shares as finalized by the Company, the Lead Manager and the Registrar to the issue in consultation with BSE Limited (the Designated Stock Exchange for the Rights Issue) on 2nd May, 2014. The Promoters of the Company had subscribed to the whole of their entitlement under rights issue. Pursuant to such allotment the promoter's shareholding in the Company has increased from 58.98% to 59.90%. As a result of allotment of shares issued on rights basis, the paid up capital of the Company has increased from Rs. 3450.02 lacs to Rs. 9511.92 lacs. The Company has received approval from BSE Limited and The Calcutta Stock Exchange Limited for listing and dealing of all the above Equity Shares of the Company. As on date, the promoter's shareholding in the Company is 52.89%. 9. DIRECTORS RESPONSIBILITY STATEMENT In terms of the requirement of Section 134 (3) (c) of the Companies Act, 2013 your Directors state that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) they have selected such accounting policies and applied them consistently and made judgements 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 of the Company for that period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have 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) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 10. CORPORATE GOVERNANCE In terms of Clause 49 of the listing agreement with the Stock Exchanges, Report on Corporate Governance along with certificate of compliance from a Practising Company Secretary confirming compliances to the conditions of the Corporate Governance is enclosed as Annexure-2 to this Report. 11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Company is a Non Banking Financial Company and therefore information relating to Conservation of Energy and Technology Absorption are not applicable. The Company has neither earned nor used any foreign exchange during the year under review. 12. KEY MANAGERIAL PERSONNEL As reported earlier, Mr. Shiv Kumar Dabriwala who was already holding the position of Chief Financial Officer of the Company since 1st May, 2012 was appointed as Chief Financial Officer pursuant to Section 203 read with Rule 8 of the Companies (Appointment and Remuneration) Rules, 2014 w.e.f. 30th May, 2014. 13. EXTRACT OF ANNUAL RETURN The Extract of Annual Return is prepared in Form MGT-9 as per the provisions of Section 92 (3) of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure-3 to this Report. 14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Your Company is exempted from the applicability of the provisions of Section 186 of the Companies Act, 2013 (Act) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Companies (Meetings of Board and its Powers) Amendment Rules, 2015 as your Company is RBI registered Non Banking Financial Company whose principal business inter alia includes financing of companies. Details of Loans, Investments, Guarantees or security in connection with loans to other body corporates or persons, as at the end of the year are given in notes to the Financial Statements. 15. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION There is no such material change and commitment affecting the financial position of your Company which have occurred between the end of the financial year of your Company to which the financial statements relate and the date of the Report. 16. MEETING OF THE BOARD AND AUDIT COMMITTEE The Board meets at regular intervals to discuss and decide on policy and strategy apart from other Board business. During the year, eight Board Meetings and five Audit Committee Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details regarding Board and Audit Committee Meetings are given in the Corporate Governance Section forming part of this Report. 17. SUBSIDIARY COMPANIES/ASSOCIATE COMPANIES / JOINT VENTURES As per the provisions of Section 129(3) of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary Companies/ Associate Companies/Joint Ventures is prepared in Form AOC-1 and the same is enclosed as Annexure - 4 to this Report. During the year under review, your Company has formulated and put in place a Policy for determining 'Material Subsidiaries' as per the revised Clause 49(V)(D) of the Listing Agreement with the Stock Exchanges. The said Policy is available on your Company's website www.qoldenqoenka.com and a web link to the said Policy has been provided in the Corporate Governance Section forming part of this Report. As on March 31st, 2015, none of the subsidiaries of your Company are Material Subsidiaries. 18. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements have been prepared by the Company's Management in accordance with the requirements of Accounting Standards 21 issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of Companies Act, 2013 and forms part of the Annual Report. As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.qoldenqoenka.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders at their request. The annual accounts of subsidiaries will also be kept for inspection by any Member of the Company at the registered office of the Company. The Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries. The financials of Purple Advertising Services Private Limited, an associate of the Company could not be completed and hence same has not been considered for consolidation purpose. 19. AUDITORS AND AUDITOR'S REPORT A. Statutory Auditors M/s Das & Prasad, Chartered Accountants (ICAI Firm Registration Number: 303054E) were appointed as Statutory Auditors of the Company at the 21st Annual General Meeting (AGM) held on 10th September, 2014 to hold office for a term of five consecutive years from the conclusion of the 21st Annual General Meeting till the conclusion of the 25th Annual General Meeting, subject to ratification of the appointment by the members at every AGM held after the 21st Annual General Meeting. As per the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014, the Company has received consent from M/s Das & Prasad, Chartered Accountants, Statutory Auditors of the Company and confirmation regarding their eligibility to continue as the Statutory Auditors of the Company. Your Directors requested to ratify the appointment of M/s Das & Prasad, Chartered Accountants as the Statutory Auditors of the Company at the ensuing AGM. The observations of the Auditors when read together with the relevant notes to the accounts and accounting policies are self-explanatory. With respect to investment made in 800,000 equity shares of S2 Capital Services Pvt Ltd of Rs. 10 each issued at premium of Rs. 40 per share amounting to Rs. 400 lacs, the Company is of the view that the said investment is long term strategic investment and hence no provision for diminution in value of said investment has been made in the current financial year. With regards to Clause (x) of the Annexure to the Auditors' Report, please note that your Company is holding 32,00,000 equity shares (representing 14.32% equity holding) of ANS Developers Private Limited (ANSDPL). ANSDPL is constructing an integrated township in Lucknow on the Land owned by them. To part finance its project, ANSDPL has taken term loan of Rs. 300 crores from Banks against the said project. The market value of the said land as per Valuation Certificate is more than 250 crores. All the directors and shareholders of ANSDPL have jointly given Personal/Corporate Guarantee to the Banks. Considering the future prospect and appreciation in land, the Board is of the opinion that the Corporate Guarantee given to Banks for term loan availed by ANSDPL is not prejudicial to the interest of the Company. B. Secretarial Auditor As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed M/s Maheshwari R & Associates, Practising Company Secretary (C.P.No: 3309) as Secretarial Auditor to conduct Secretarial Audit of the Company for the financial year ended on March 31, 2015. Secretarial Audit Report issued by M/s Maheshwari R & Associates, Practising Company Secretary in form MR-3 is enclosed as Annexure - 5 to this Report. There is no reservation, qualification or adverse remark contained in the Secretarial Auditor Report. Information referred in Secretarial Auditor Report are self-explanatory and don't call for any further comments. 20. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which have been entrusted with the responsibility to assist the board in identification and appraising the risk involved in the business presently carried out by the Company, formulation of policies, to foresee future risk, to device means to minimize the risk and to groom and train officials with the risk associated with present business. The Composition of the Committee has been provided in the Corporate Governance Section forming part of this Report. The Company manages risk through a detailed Risk Management Policy framework which lays down guidelines in identifying, assessing and managing risks that the businesses are exposed to. Risk is managed through appropriate structures that are in place at Golden Goenka Fincorp Limited, including suitable reporting mechanisms. Further kindly refer to the write-up in the Section Management Discussion Analysis Report. 21. PARTICULARS OF EMPLOYEES REQUIRED UNDER SECTION 197(12) READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The prescribed particulars of remuneration of employees pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out as Annexure -6 to this Report. 22. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTOR UNDER SUB SECTION (6) OF SECTION 149 OF COMPANIES ACT, 2013 All the Independent Directors of your Company have submitted a declaration at the time of their appointment and also annually that they meet the criteria of independence as laid down under Section 149(6) of the Act and revised Clause 49 of the Listing Agreement. All requisite declarations were placed before the Board. 23. DIRECTORS Mr. Chandra Kumar Chandak (DIN: 02529629), Director of the Company resigned w.e.f 11th June, 2015. The Board places on record its high appreciation of the valuable services rendered by Mr. Chandra Kumar Chandak during his tenure as Director of the Company. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of your Company has appointed both Mrs. Leena Hinesh Jobanputra (DIN:- 06975039) and Mr. Govind Kumar Goyal (DIN:-02466348) as Additional Directors (Category - Independent) with effect from 12th November, 2014 and 24th July, 2015 respectively to hold office up to the date of forthcoming Annual General Meeting (AGM) under Section 161 of the Companies Act, 2013. Subject to approval of the Members, the Board recommends appointment of both Mrs. Leena Hinesh Jobanputra and Mr. Govind Kumar Goyal as Independent Directors of your Company for a period of 5 (five) consecutive years with effect from 12th November, 2014 and 24th July, 2015 respectively. Mr. Dinesh Burman (DIN: 00612904) was appointed as Whole-time Director of the Company w.e.f. 30th May, 2012 for a period of 3 years i.e, till 29th May, 2015. Subjected to the approval of the members at the forthcoming Annual General Meeting, the Board of Directors at their meeting held on 13th May, 2015 appointed Mr. Dinesh Burman as the Whole time Director of the Company for a further period of 3 years w.e.f 30th May, 2015. In accordance with the provisions of Section 152 of the Act and the aforesaid Rules and your Company's Articles of Association, Mr. Girdhari Lal Goenka (DIN: 00613725) retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Information about the Directors proposed to be appointed/ reappointed stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges are provided in the Corporate Governance Section forming part of this Report. The Board of Directors of your Company recommends the appointment/ re-appointment of all the above Directors. 24. CHANGE IN THE NATURE OF THE BUSINESS, IF ANY During the year under review, there is no change in the nature of the business. 25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND YOUR COMPANY'S OPERATIONS IN FUTURE There are no such orders passed by the regulators / courts / tribunals impacting the going concern status and your Company's operations in future. 26. BOARD EVALUATION The Nomination and Remuneration Committee (NRC) of the Company formulated and laid down criteria for Performance Evaluation of the Board (including Committees) and every Director (including Independent Directors) pursuant to provisions of Section 134, Section 149 read with Code of Independent Directors (Schedule IV) and Section 178 of the Companies Act, 2013 and the revised Clause 49 of the Listing Agreement with Stock Exchanges. The manner in which the evaluation is carried out has been explained in the Corporate Governance Section forming part of this Report. 27. PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES There are no contract or arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013. The details of the transaction entered into with the Related Parties are disclosed in Note No. 31 forming part of the Financial Statements. In terms of Clause 49 (VII) of the Listing Agreement, your Company obtained prior approval of the Audit Committee for entering into any transaction with related parties. Further, the Audit Committee granted omnibus approval for repetitive transactions to be entered with the related parties, during the year. The Audit Committee reviews all related party transactions on a quarterly basis. A Policy on the Related Party Transactions has been devised by your Company for determining the materiality of transactions with related parties and dealings with them. The said Policy is available on your Company's website www.qoldenqoenka . com and a web link to the said Policy has been provided in the Corporate Governance Section forming part of this Report. 28. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Kindly refer to the write-up in the Section Management Discussion Analysis Report. 29. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has established a Vigil Mechanism / Whistle Blower Policy for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy, if any. The Policy is also available on the Company's website and the web link of the same is: <http://www.qoldenqoenka.com/> imaqes/GGFL-WhistleBlowerPolicy.pdf. 30. POLICY ON PREVENTION OF SEXUAL HARASSMENT The Company has adopted Policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31st March, 2015, the Company has not received any Complaints pertaining to Sexual Harassment. 31. NOMINATION AND REMUNERATION COMMITTEE In order to comply with the provisions of Section 178 of the Companies Act, 2013 effective from 1st April, 2014 read with Companies (Meetings of Board and its Powers) Rules, 2014 and amended Clause 49 of the Listing Agreement, the Board of Directors of the Company at its meeting held on 23rd April, 2014 renamed the Remuneration Committee as "Nomination and Remuneration Committee" and also expanded the terms of reference as specified under Section 178 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder and Clause 49 of the Listing Agreement with the Stock Exchanges. The Composition of the Committee has been provided in the Corporate Governance Section forming part of this Report. The terms of reference of the Committee are wide enough to cover matters specified for the Committee under Clause 49 of the Listing Agreement and Section 178 of the Companies Act, 2013. During the financial year 2014-15 three Nomination and Remuneration Committee Meetings were held on 30.05.2014, 30.07.2014 and 12.11.2014. The Company's Remuneration Policy has been provided in the Corporate Governance Section forming part of this Report. 32. OTHER DISCLOSURES In March 2015, search and seizure operations were conducted by the Income Tax Authorities under Section 132 of the Income Tax Act. During the course of the search and seizure operations, the Income Tax Authorities have taken custody of certain materials such as documents, records and recorded statements of certain officials of the Company. The Company does not expect any liability arising out of the aforesaid search and seizure. 33. AKNOWLEDGEMENTS Your Directors would like to express their grateful appreciation for the excellent support and co-operation received from the Banks, RBI, SEBI, MCA, Registrar and Share Transfer Agents, Registrar of Companies, Stock Exchanges, Depositories, Customers, Business Associates, Members, Debenture holders, Debenture Trustees and other Stakeholders during the year under review. Your Directors also place on record their deep appreciation for the valuable contribution of the employees at all levels for the progress of your Company during the year and look forward to their continued co-operation in realisation of the corporate goals in the years ahead. For and on behalf of the Board CA G.L. Goenka (DIN: 00613725) Chairman & Managing Director Place: Kolkata Date: 24th July, 2015 |