AD Manum Finance Ltd Directors Report.
Dear Members, of Ad-Manum Finance Limited Indore
Your Director(s) are pleased to present their 33rd Annual Report and the Companys Audited Financial Statement for the Financial Year ended 31st March, 2019.
The Companys Financial Performance for the year ended 31st March 2019, is summarized below:
|(Amount in Rs.)|
|Profit before Depreciation, Interest & other adjustments||62909989||61140137|
|Less : Finance Cost||(22483226)||(41366115)|
|: Exceptional Item||(382255832)||210727|
|Profit Before Tax||(451408)||16516311|
|Less : Provision for current Income Tax||0||1050000|
|: Deferred Tax||4538755||0|
|Profit for the year||(4990163)||15466311|
|Earning per share||(0.67)||2.06|
|Add : Balance of Profit B/F From Previous Year||81485780||69112731|
|Amount available for appropriation||76495617||84579042|
|Transfer to NBFC Reserve||0||3093262|
|Balance carried to Balance Sheet||76495617||81485780|
|EPS (Basic & Diluted)||(0.67)||2.06|
Performance of the Company.
During the Year Company has achieved total revenue of Rs. 1006.39 Lakh (Previous year Rs. 1505.41 Lakh) and Profit/(loss) after Tax of Rs. (49.90) Lakh as against Profit of Rs. 154.66 Lakh in the previous year. As per the special resolution passed by the members as required under section 180(1)(a) of the Companies Act 2013 and the applicable SEBI (LODR) Regulations by way of postal ballot process completed on 27th June, 2018 During the year, your company has sold its Loan Portfolio mainly relating to the Commercial Vehicle Finance activities as the management considered the slow down in the vehicle industry, to other company for realization of the loan portfolio to have better utilization in other sector and paid off its Debt to reduce the financial burden of interest and finance cost resulting the turnover and Profitability of the company was decreased for the time being.
During the year, as per the special resolution passed by the members as required under Section 13 of the Companies Act 2013 and the applicable SEBI (LODR) Regulations by way of postal ballot process completed on 27th June, 2018 also altered its Main Object Clause replacing the existing Clause III(A) with new clause III(A) of the Memorandum of Association for authority to carry on the business activities for providing finance by way of loans or otherwise to the real estate project to have better utilization of the available financial resources.
Further that your company proposes to alter the ancillary object clause for having authority to the company to enter into the scheme of arrangement for merger/demerger/ amalgamation and reconstruction of the Company and recommend to pass necessary resolution if any given in the notice of the forthcoming Annual General Meeting by way of Special Resolution.
Due to loss incurred in the current year and long term requirement of funds, the Boards proposes to retain its accumulated profits and decided, not to recommend any dividend for the year 2018-19 (Previous year Nil) and retain profit for the better opportunities.
Transfer of Amount and Shares to Investor Education & Protection Funds (IEPF)
Pursuant to the provisions of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules") notified by the Ministry of Corporate Affairs, New Delhi. All unpaid or unclaimed dividend are require to be transferred by the company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the Demat account of the IEPF Authority. Accordingly, the company has transferred the unclaimed and unpaid dividends of Rs. 1,60,413/- and has also transfer 16,920 shares of Rs. 10/-each to the IEPF Authority as per the requirement of the IEPF rules on account of the dividend declared by the company in the year 2009-10 and 2010-11.
The detail related to dividend remains unpaid-unclaimed in the Company has been given in the Corporate Governance Report attached with the annual report of the Company.
Transfer of Amount to the NBFC Reserves
The Company has transferred NIL amount to the NBFC Reserves as per requirement of the Directions of the RBI to the NBFC Companies (Previous years. 30,93,262/- (Rupees Thirty Lakh Ninety Three Thousand Two Hundred and Sixty Two only)).
Non Performing Assets and Provisions
The company has ascertained Non Performing Assets under Non Banking Financial (Non deposit accepting or holding) Companys Prudential norms (Reserve Bank) Directions, 2007, as amended from time to time, and made adequate provisions there against. The company did not recognize interest income on such Non Performing Assets. The Company has also written off unrecoverable amount as bad debts.
The company does not have any subsidiary, joint venture and any associate company within the meaning of the Companies Act, 2013 either at the beginning or at the end of the financial year. However, the Company is an associate of foreign company namely Agarwal Coal Corporation(s) Pte. Ltd. (Singapore) which hold 36.93% shares in the Company and having status of the promoter.
Disclosure Under Section 134(3) of the Companies Act, 2013 (the Act)
Pursuant to the provisions of Section 134(3) of the Act read along with the Companies (Accounts) Rules, 2014. The required informations and disclosures, to the extent applicable to the company are discussed elsewhere in this report and their relevant informations are as under:-9.1 The extracts of Annual Return in Form MGT-9 as per Annexure-A and is also hosted on the website (www.admanumfinance.com) of the company as per the requirement of the Act.
9.2 Policy of company for the appointment of Directors and their remuneration is hosted on the website (www.admanumfinance.com) of the company as per the requirement of the section 178 of the Companies Act, 2013. 9.3 The particulars of related party contracts are enclosed herewith in form AOC-2 as per Annexure B.
9.4 The ratio of the remuneration of each director to the median employees remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report and is annexed as per Annexure - C. There is no employee drawing remuneration of Rs. 8,50,000/- per month or Rs. 1,02,00,000/- per year, therefore the particulars of employees as required u/s 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable to the Company.
Name of the top 10 employees in terms of remuneration drawn in the financial year 2018-19:
A statement of Top-10 employees in terms of remuneration drawn as per rule 5(2) read with rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed with the report as "Annexure-D".
Risk Management Committee
The company has voluntary constituted risk management committee and the policy is disclosed on the website of the company. ( http://www.admanumfinance.com/amfl_risk.pdf ).
Disclosure of Codes, Standards, Policies and compliances there under a) Know Your Customer and Anti money laundering measure policy
Your company has a board approved Know Your Customer and Anti Money Laundering measure policy (KYC and AML Policy) in place and adheres to the said policy. The said policy is in line with the RBI Guidelines.
Company has also adheres to the compliance requirement in terms of the said policy including the monitoring and reporting of cash and suspicious transactions. There are however, no cash transactions of the value of more than Rs. 10,00,000/- or any suspicious transactions whether or not made in cash noticed by the company in terms of the said policy.
b) Fair Practice Code
The company has in place a fair practice Code (FPC), as per RBI Regulations which includes guidelines from appropriate staff conduct when dealing with the customers and on the organizations policies vis-a-vis client protection. Your company and its employees duly complied with the provisions of FPC.
c) Code of Conduct for Board of Directors and the Senior Management Personnel
The company has adopted a code of conduct as required under Regulation 17 of SEBI (LODR) Regulations 2015, for its Board of Directors and the senior management personnel. The code requires the directors and employees of the company to act honestly, ethically and with integrity and in a professional and respectful manner. A certificate of the Management is attached with the Report in the Corporate Governance section. d) Code for Prohibition of Insider Trading Practices
The company has in place a code for prevention of insider trading practices in accordance with the model code of conduct, as prescribed under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended and has duly complied with the provisions of the said code.
e) Whistle blower policy
Pursuant to the provisions of section 177(9) and (10) of the Companies Act, 2013 read with rule 7 of Companies (Meeting of Boards and its powers) Rules, 2014 and Regulation 22 of SEBI (LODR) Regulations, 2015, the company had adopted a whistle blower policy which provides for a vigil mechanism that encourages and supports its directors and employees to report instances of unethical behavior, actual or suspected, fraud or violation of the companys code of conduct policy. It also provides for adequate safeguards against victimization of persons who use this mechanism and direct access to the chairman of audit committee in exceptional cases. Policy of the whistle blower of the Company has been given at the website of the company at :-http://www.admanumfinance.com/Whistle_Blower_Policy_&_Vigil_Mechanism%20policy.pdf and attached the same as Annexure E to this report.
f ) Prevention, Prohibition and Redressal of Sexual Harassment of women at work place
The company has in place a policy on prevention, prohibition and redresses of sexual harassment of women at workplace. The primary objective of the said policy is to protect the women employees from sexual harassment at the place of work and also provides for punishment in case of false and malicious representations. No compliant, however is received by the company under the said policy in FY 2018-19.
g) Nomination, Remuneration and Evaluation policy (NRE Policy).
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a nomination, remuneration and evaluation policy which lays down the criteria for identifying the persons who are qualified to be appointed as directors and, or senior management personnel of the company, along with the criteria for determination of remuneration of directors, KMPs and other employees and their evaluation and includes other matters, as prescribed under the provisions of section 178 of Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations 2015. Policy of the Company has been given at the website of the Company at http://www.admanumfinance.com/Nominatin % 20 & % 20 Remunaration%20Policy.pdf. The details of the same are also covered in Corporate Governance Report forming part of this Annual Report.
h) Related Party Transactions Policy
Transactions entered with related parties as defined under section 188(1) of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations 2015 during the financial year were mainly in the ordinary course of business and on an arms length basis and are not material. The related party transaction policy as formulated by the company defines the materiality of related party and lays down the procedures of dealing with related party transactions. The details of the same are posted on the Company website (http://www.admanumfinance.com/Related% 20Party%20Transaction%20Policy.pdf).
All related Party Transaction are placed before the Audit Committee. Further the company has also obtained approval of members in the 30th Annual General Meeting held on 21st September,2016 and the transaction entered by the company is within the limit granted by the members. A statement of all Related Party Transaction is placed before the Audit Committee for its review on a quarterly basis, specifying the nature and value of the transaction.
i) Corporate Social Responsibility Policy
Company has framed Corporate Social Responsibility (CSR Policy), as per the provisions of Companies (CSR Policy) Rules, 2015 which, inter alia, lays down the guidelines and mechanism, directly or indirectly through eligible trust or institutions for undertaking socially useful projects for welfare of the society. As per the provisions of section 135 of Companies Act, 2013, along with the rules made thereunder the company has constituted a Corporate Social Responsibility Committee. The composition of the CSR Committee and its terms of reference are given in the Corporate Governance Report forming part of this Annual Report. However, the Company is not fall under the purview of section 135 of Companies act in this Financial year 2018-19.
Listing of Shares of the Company
The equity shares of the company continue to remain listed on BSE Limited (Script Code: 511359). The company has paid the Annual Listing Fees to BSE Limited for the financial year 2019-20 on time.
Directors and Key Managerial Personnel Executive Directors and KMPs
The Company is having adequate Key Managerial Personnels as per requirements of section 203 of the Companies Act, 2013 as well as the SEBI (LODR) Regulations, 2015. During the year, Following are the changes in the directors and KMPs of the Company:-
1. Mr. Vikas Gupta, Chief Financial Officer of the Company designated as Key Managerial Personnel of the Company has tendered his resignation at the Meeting of Board of Directors held on 17th day of August, 2018 with immediate effect and Board of Directors accepted the same;
2. Mr. Kundan Chouhan is appointed as Chief Financial Officer of the Company designated as Key Managerial Personnel of the Company as per the provisions of Section 203 of the Companies Act, 2013 at the Meeting of Board of Directors held on 7th day of February, 2019;
3. Shri Jayanta Nath Choudhary and Mrs. Dolly Choudhary, Whole-time Directors has tendered their resignation w.e.f. 15th day of February, 2019 and the Board of directors accepted the same.
4. Mr. Dharmendra Agrawal is appointed as Additional Director in the category of Whole-Time Director and Chief Executive Officer designated as Key Managerial Personnel of the Company at the Meeting of the Board of Directors held on 30th March, 2019.
Declaration for Independency of Independent Directors
The Company have received necessary declaration from all the independent directors as required under section 149(6) of the Companies Act, 2013 confirming that they meet the criteria of Independence as per the SEBI (LODR) Regulation, 2015 and the Companies Act, 2013. In the Opinion of the Board, all the independent directors fulfills the criteria of the independency as required under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.
Pursuant to the provision of the Companies Act, 2013, company is having 3 (Three) Independent Director including 1 (One) Women Director which are as follows:-
1) CA Assem Trivedi
2) CA Vishnu Gupta
3) Mrs. Priyanka Jha
During the year, the following changes have taken place in the Independent Directors of the company :
1. Mrs. Priyanka Jha is appointed as Additional Director in the Category of Women director designated as Independent Director of the Company at the Meeting of the Board of Directors held on 30th March, 2019.
2. Mr. Devee Prashad Kori, Independent Director of the Company tendered its resignation w.e.f. 30th day of March, 2019 at the Meeting of the Board of Directors held on 30th March, 2019 and the Board of Directors accepted the same.
Directors seeking confirmation in the ensuing Annual General Meeting;
Your Board of Directors has proposes to pass the necessary resolution in the ensuing Annual general meeting related to confirmation of the appointment of Ms. Priyanka Jha (DIN 07347415) as the Independent Director and confirmation for appointment of Mr. Dharmendra Agrawal (DIN 08390936) as the Director and further as the Whole Time Director w.e.f. 30th March, 2019, Your Board of directors recommends to pass necessary resolution to that effect as set out in the notice of the Annual General Meeting and justification for re-appointing them is being annexed in the explanatory statement.
The Company has devised a policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance which code of conduct, vision and strategy.
The Board carried out an annual performance evaluation of the Board, Committees, Individual Directors and the Chairperson. The Chairman of the respective Committees hared the report on evaluation with the respective committee members. The performance of each committees was evaluated by the Board, based on report on evaluation receive committees.
The report on performance evaluation of the Individuals Directors was reviewed by the Chairman of the Board and feedback was given to Directors.
During the FY 2018-19, 12 (Twelve) Board Meetings were convened and held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The details of the Board meetings held during the year along with the attendance of the respective directors there at are set out in the Corporate Governance Report forming part of this annual report.
Significant/ Material orders passed by the Regulator or Court or Tribunals
There were no significant/material orders passed by any regulator or court or tribunal which would impact the going concern status of the company and its future operations.
Internal Audit and Internal Financial Control System
The company has appointed an independent firm of Chartered Accountants for conducting the audit as per the internal audit standards and regulations. The internal auditor reports their findings to the audit committee of the board. The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism with interaction of KMP and functional staff.
The company has taken stringent measures to control the quality of disbursement of loan and its recovery to prevent fraud. The company has also taken steps to check the performance of the functional employees of the company at branch level.
Secretarial Audit Report
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the company had appointed M/s D.K. Jain & Co., Practicing Company Secretaries, Indore to undertake the Secretarial Audit of the company for the FY 2018-19. The Secretarial Audit Report for the FY ended March 31st, 2019 is annexed as Annexure F to this report. The said report does not contain any material qualification, reservation or adverse remark, except the following: Observations: The company has not given Separate Notice for Book Closure for the period 22.09.2018 to 28.09.2018 to the BSE under the Regulation 42(2) of the SEBI (LODR) Regulations, 2015.
Management Reply: The Company has properly closed its Register of Members and Share Transfer Book and provided copy of the newspaper clipping for book closure for the period 22.09.2018 to 28.09.2018 to the stock exchange and has also hosted the same on the website of the Company and disclosed in the annual report. However, the same was not separately disclosed inadvertently without any malafide intention and not prejudice to the interest of the members of the Company as the Company has not declared any dividend during that period for the year 2017-18.
Observations: The company has not submitted to the BSE the Copies of the notices, circulars and newspress notice to the shareholders for the D-mat of shares, KYC Requirements, transfer of shares to IEPF, etc under the Regulation 30(2) read with Clause 12 of Para A of Part A of schedule III of the SEBI (LODR) Regulations, 2015.
Management Reply: The Company has properly given notices and circulars to the members of the company and has also hosted the same on the website of the Company and disclosed in the annual report. However, the same was not separately filed inadvertently without any malafide intention and not prejudice to the interest of the members of the Company. Observations: The Company has not submitted a Certificate from the Statutory Auditor on half yearly basis, certifying compliance with the existing terms and conditions of FDI, to the Bhopal Regional Office of the RBI, as per the Master Direction- Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016 issued by RBI.
Management Reply: Since there was a change in the requirements, the company could not comply with the same, however, it has filed the annual return covering the period of the half yearly also. Further that there was no objections from the RBI as such.
Auditor and Auditors Report
At the 31st Annual General Meeting held on 25th September, 2017, the members had appointed M/s SAP Jain & Associates, (ICAI Firm Registration Number 019356C) Chartered Accountants as statutory auditors of the company to hold the office from the conclusion of the ensuing Annual General Meeting till the conclusion of 36th Annual General Meeting to be held in the year 2022.
The Company has received consent from Statutory Auditor and confirmation to the effect that they are not disqualified to be appointed as Statutory Auditor of the company in terms of the provisions of the Companies Act, 2013 and rules framed thereunder. Hence offer themselves eligible to continue during the year .
Further, the Notes to the Accounts referred to in Auditors Report are self explanatory and does not call for any comment.
Directors Responsibility Statement
The Directors Responsibility Statement referred to Section 134(3)(c) and 134(5) of the Companies Act, 2013:
- In the preparation of the annual accounts for the year ended March 31st 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there is no material departures from the same;
- 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;
- The directors had prepared the annual accounts on a "going concern" basis;
- 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
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 March 31st 2019 and of the loss of the company for the year ended on that date;
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Corporate Governance & Management Discussion and Analysis
Regulation 34 read alongwith Schedule V of SEBI (LODR) Regulations, 2015 and Companies Act 2013, along with their rules, the corporate governance report, management discussion and analysis, certificate from Practicing Company Secretary regarding non-disqualification, debarred for being appointment or continue to be appointed and the auditors certificate regarding compliance of conditions of corporate governance is enclosed herewith as per Annexure - G
Details of Fraud
There is no fraud as reported by the Auditors to the Central Government which needs to be disclosed as per the requirement of the provisions of section 134(3)(ca) of the Companies Act, 2013 during the year 2018-19.
Pursuant to the provisions of the Companies Act, 2013 read along with their rules and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, an Annual Performance evaluation of the Board, the directors individually as well as the evaluation of the working of the board committees including audit committee and other committees of the Board of Directors of the company was carried out during the year and is covered under the corporate governance report forming part of this annual report.
The Company is a non deposit taking Category - B, NBFC Company. The company does not have any public deposits within the meaning of Section 73 of the Companies Act, 2013. Further, the Company has not accepted any deposit in contravention of the provisions of the Companies Act, 2013 as well as RBI directions.
Adequacy of Internal Financial Controls
The company has an adequate internal financial control backed by sufficient qualified staff, system software and special softwares. The company has also an internal audit system by the external agency.
Committee of the Board
The Company has duly constituted the following committees as per the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- Audit Committee as per section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- Nomination and Remuneration Committee as per section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- Risk Management Committee as per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- CSR Committee as per section 135 of the Companies Act, 2013.
b) Stakeholder Relationship Committee as per section 178 of the Companies Act, 2013 and Regulation 20 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
f) Internal Committee for Sexual Harassment of Women at the Work Place.
The detail of the composition of all the committees and their respective terms of reference are included in the Corporate Governance Report forming the part of this annual report. The committees meets at the regular interval prescribed in the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and any other Act applicable, if any.
Disclosure as per terms of Paragraph 13 of "Non-Systemically Important Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 The desired disclosure is enclosed herewith as per attached Financial Statements.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo
Particulars required u/s 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of Companies (Account) Rules, on conservation of energy and technology absorption are NIL. There was no foreign exchange earnings and outgoing during the Financial Year (Previous year Nil).
Compliance of Reserve Bank of India Guidelines
The Company is having Registration from the RBI to act as NBFC Company and is complying with the entire Requirements prescribed by the Reserve Bank of India, from time to time.
Change in the nature of business
During the year under review, there was the following changes in the nature of the business:
1) company has sold its entire loan portfolio to another body corporate;
2) the company has altered its main object clause and intended to enter into the Real Estate Financing Business.
Material Changes and Commitments Affecting the Financial Position of the company
No material changes and commitments affecting the financial position of the Company occurred during the Financial Year to which this financial statements relate and the date of report.
Particulars of Loans, Guarantees and Investments
Since, the company is registered as NBFC with RBI, therefore, the provisions of section 186 of the Companies Act, 2013 and the rules made thereunder is not applicable on the company. However, the Company has made certain investment and provided loans to certain corporate during its ordinary course of business. Details of which can be reviewed in the Financial Statements of the company.
The Board of Directors places its sincere gratitude for the assistance and co-operation received from Banks, Customers and Shareholders etc. The Directors take this opportunity to express their sincere appreciation for the dedicated services of the executives and staffs for their contribution to the overall performance of the company.
|Registered Office :||By Order of the Board|
|Ad-Manum Finance Limited|
|CIN : L52520MP1986PLC003405||Sd/-|
|"Agarwal House" Ground Floor||Sd/-|
|(Vinod Kumar Agarwal)||(Dharmendra Agrawal)|
|Director & Chairman||Whole-Time Director & CEO|