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Latent Light Finance Limited
(Formerly Known as Galaxy Commercial Limited)
Your directors have pleasure in presenting their 34th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March 2019.
1. FINANCIAL RESULTS
(Amount in Rupees)
|Particulars||For the financial year||For the financial year|
|Gross Total Income||1,59,47,088||1,29,33,844|
|Less: Total Expenditures||59,92,274||67,01,903|
|Net Profit before tax||99,54,814||62,31,941|
|Less: Tax Expenses|
|- Income Tax-Current||26,72,527||11,66,755|
|- Income Tax- Earlier Year||0||9,944|
|- Deferred Tax||243,446||(20,164)|
|- MAT Credit Availed||1,47,629||(54,310)|
|Profit after tax||68,91,212||51,29,716|
|Provision for transfer to Special Reserve Fund||13,78,242||10,25,943|
In order to comply with the provisions of Reserve Bank of India Act, 1934 the Company has transferred Rs. 13,78,242 (Thirteen Lakh Seventy Eight thousand Two Hundred and Forty Two only) to Special Reserve Funds and has also made provision of Rs. 25,144- ( Rupees Twenty Five thousand oen hundred and forty four Only) for Standard Assets during the year under review.
Except as mentioned above, no amount was proposed to transfer to any reserve by the Company during the year under review.
2. OPERATIONS OF THE COMPANY
During the year under review, the Company was engaged in carrying on the business as Non Banking Financial Company without accepting public deposit for which the Certificate of Registration has been obtained from the Department of Non-Banking Supervision, Reserve Bank of India, New Delhi. The Company has provided / taken inter-corporate loans in ordinary course of business and on arm length basis. Your directors also intend to diversify its operation into another area / business in order to make the Company more profitable.
3. PERFORMANCE REVIEW
During the year under review, the Companys total turnover is Rs. 1,59,47,088/- (Rupees One Crore Fifity Nine Lakhs Forty seven Thousand and Eighty Eight only) as compared to Rs. 1,29,33,844/- (Rupees One Crore Twenty Nine Lakhs thirty three Thousand Eight Hundred and Forty Four only) in the previous year and the Company earned a profit after tax of Rs. 68,91,212 (Sixrt Eight Lakh Ninety one thousand Two hundred and Twelve Only) as compared to Rs. 51,29,716 (Fifty One Lakh Twenty nine thousand seven hundred and sixteen Only) in the previous year
Your directors do not recommend any dividend for payment to the shareholders/ members of the Company for the financial year ended on 31st March, 2019.
5. DIRECTORS AND KMP OF THE COMPANY
Pursuant to the provisions of section 149 of the Act, Mr. Virendra Singh Chowhan, and Ms. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
Mr. Dharmender Singhal, Director of the Company retires by rotation and being eligible, has offered himself for re-appointment. Your Directors recommend his re-appointment as director of the Company.
As required under regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the information on the particulars of the Directors proposed for appointment / reappointment has been given in the Notice of the Annual General Meeting.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee..
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of directors senior management and to fix their remuneration.
6. KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 203 of the Act, the key managerial personnel of the Company are - Mr. Dharmender Singhal, Chief Financial Officer, Mr. Kapil Singhal, Chief Executive Officer and Mr. Yash Gupta, Company Secretary of the Company.
7. DECLARATION OF INDEPENDENCE:
Pursuant to the provisions of section 149 of the Act, Mr. Virendra Singh Chowhan, and Ms. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. . Further, none of the directors of your Company are disqualified under the provisions of Section 164 (2) (a) & (b) of the Companies Act, 2013.
During the year under review, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
As required under regulation 36(3) of SEBI (LODR) Regulations, 2015, the information on the particulars of the Directors proposed for appointment / re- appointment has been given in the Notice of the Annual General Meeting.
8. RETIREMENT BY ROTATION OF THE DIRECTORS
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Dharmender Singhal, Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and has tendered his unwillingness to be re-appointed as the director of the Company and therefore shall retire at the ensuing Annual General Meeting. The matter has been placed for noting by members at the ensuing Annual General Meeting, details of which are given in the Notice of Annual General Meeting.
During the year under review Seven (7) Board Meetings were convened and held. The intervening gap between the Board meetings was within the period prescribed under the Companies Act, 2013.
10. COMMITTEES OF THE BOARD
Currently, the Company has Two Committees, as indicated below:
i) Audit Committee; ii) Nomination and Remuneration Committee;
11. DEMATERIALISATION OF SHARES
The Company has connectivity with NSDL & CDSL for dematerialization of its equity shares. The ISIN No. INE515K01018 has been allotted for the Company. Therefore, the investors may keep their shareholding in the electronic mode with their Depository Participates.
As on 31st March, 2019, only 78% (Approx) of the Companys paid up Equity Share Capital is in dematerialized form and balance 22 % (Approx) is in physical form. The Companys Registrars & Transfer Agent is M/s Indus Portfolio Private Limited, having their communication office at G-65, Bali Nagar, New Delhi-110015.
12. NOMINATION AND REMUNERATION POLICY
The Company has devised a policy on Nomination, Remuneration and Board Diversity including criteria for determining qualifications, positive attributes, independence of a director and other matters specified under the provisions of Section 178 of the Companies Act, 2013. The Policy also includes the criteria for nomination, appointment and removal of Directors, Key Managerial Personnels (KMPs) and Senior Management and to fix their remuneration. No change in the policy since the last financial year.
13. AUDIT COMMITTEE
During the year all the recommendations of the Audit Committee were accepted by the Board. The composition of the Audit Committee is given in the General Information about the company which forms part of the Annual Report.
14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed as a part of this report.
15. DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act, 2013 in the preparation of the Financial Statement for the financial year ended on 31st March, 2019 and state:
i) That in the preparation of Annual Accounts for the financial year ended as at 31st March, 2019, the applicable Accounting Standards have been followed along with proper explanation relating to the material departures.
ii) That the Directors 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 financial year ended as at 31st March, 2019 and of the profit and loss of the Company for the financial year ended on 31st March, 2019.
iii) That the Directors have 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 or other irregularities.
iv) That the Directors have prepared the Annual Accounts on a Going Concern basis.
v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
vi) There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during financial year 2018-19.
16. PUBLIC DEPOSITS
The Company has not invited or accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder and section 45-I(bb) of the Reserve Bank of India Act, 1934 during the year under review. The Company does not hold any public deposit as on date and will not accept the same in future without the prior approval of Reserve Bank of India in writing.
17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company, being a non-banking finance company registered with the Reserve Bank of India and engaged in the business of giving loans or finance & investment activities, is exempt from complying with the provisions of section 186 of the Companies Act, 2013. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been given in this Report.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of internal control geared towards achieving efficiency in its operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Testing of such Internal Control measures and systems forms a part of Internal Audit function. The Internal Auditors of the Company conduct audits of various departments based on an annual audit plan covering key areas of operations. Internal Audit reviews and evaluates the adequacy and effectiveness of internal controls, ensuring adherence to operating guidelines and systems and recommending improvements for strengthening them. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Audit Committee of the Board of Directors reviews the adequacy of internal controls. This has improved the management of the affairs of the Company and strengthened transparency and accountability. The Management ensures adherence to all internal control policies and procedures as well as compliance with regulatory guidelines. No significant audit observations and recommendations have been received from the Internal Auditors of the Company.
19. SECRETARIAL AUDIT REPORT
The Company has, at its meeting held on 14th August, 2018. appointed M/s Naveen Garg & Associates,, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2018-19 in terms of provisions of section 204 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Report of the Secretarial Auditor for the Financial ended 31st March, 2019 is attached as an annexure as Annexure "A" which forms part of this report.
Further the statutory auditors report and secretarial auditors report does not contain any qualifications, reservations or adverse remarks.
a) STATUTORY AUDITORS:
Therefore, pursuant to Section 139, 142 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, , M/s Divyank Khullar & Associates, Chartered Accountants, New Delhi (Firm Regn. No.:- 025755N) was be appointed as Statutory Auditors of the Company in the 32nd AGM held in year 2017, From the date of conclusion of the 32nd AGM of the Company till the date of conclusion of 37th Annual General Meeting to be held for the financial year ending on 31st March 2022.
As amendment notified under Section 40 of Companies Amendment Act, 2017 correspondence to Section 139 of Companies Act, 2013, now the requirement related to annual ratification of appointment of auditors by members is omitted, so ratification of auditor in Annual General Meeting not required. Your Company has not received any unwillingness to Continue as auditor, so M/s Divyank Khullar & Associates will continue as auditor.
b) SECRETARIAL AUDITORS:
Pursuant to the provisions of section 204 of the Companies Act 2013 read with rule the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has, at its meeting held on 14th August, 2019 appointed M/s Naveen Garg & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2019-20.
c) INTERNAL AUDITOR:
The Board of Directors has, at its meeting held on 14th August, 2019 appointed M/s. Mr. Anand Singh & Co., Internal Auditor , Chartered Accountants, as the Internal Auditor to undertake Internal Audit of the Company for Financial Year 2019-20 in terms of provisions of section 138 of the Companies Act, 2013
21. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure B".
22. RELATED PARTY TRANSACTIONS
During the year under review, the main business of the company is financing & investment in shares and granting inter-corporate loans. All related party transactions entered into with related parties were placed before the Audit Committee for their approval at commencement of the financial year. The audit committee decided that such transactions are in the ordinary course of business and are on arms length basis. None of the transactions with related parties fall under the scope of section 188(1) of the Companies Act, 2013. Even though the provisions of Companies Act, 2013 read with rules made thereunder regarding related party transactions are not attracted to such transactions as these are in ordinary course of business and on an arms length basis, but some transactions were material related party transaction by virtue of SEBI (LODR) Regulations, 2015. All related party transactions so entered are disclosed in Financial Statement of the Company as attached herewith. Given that the company does not have anything to report pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2, therefore the same is not provided.
The details of the transactions with related parties during the financial year 2018-19 are provided in the accompanying financial statements.
23. CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the members of the Board and all employees in the course of day to day business operations of the Company.
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with the rules made thereunder and pursuant to the provision of SEBI (Listing Obligations and Disclosure Requirements), 2015, the Company has established a Vigil Mechanism to be known as the Whistle Blower Policy for its Directors and Employees, to report instances of unethical behaviour, actual or suspected, fraud or violation of the Companys Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of Whistle Blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.
Accordingly, Vigil Mechanism / Whistle Blower Policy have been formulated with a view to provide a mechanism for the Directors and employees of the Company to approach the Ethics Officer or the Chairman of the Audit Committee of the Company.
The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about serious irregularities within the Company.
During the financial year 2018-19, no such complaint of unethical or improper activity has been received by the Company
25. RISK MANAGEMENT
The company operates in the Financial Services Sector, which is affected by variety factors linked to economic development in India and globally which, in turn, also affected global fund flows. Any economic event across the globe can have direct or indirect impact on your company. To mitigate this, Company has diversified its revenue stream across multiple verticals. Your Companys risk management system is a comprehensive and integrated framework comprising structured reporting and stringent controls. Through its approach it strives to identify opportunities that enhance organizational values while managing or mitigating risks that can adversely impact the companys future performance. Within the organization, every decision taken is after weighing the pros and cons of such a decision making taking note of the risk attributable.
The Board of Directors of the Company has framed and implemented a Risk Management framework depicting the process for loan proposal approval, loan management post disbursement and day to day monitoring to manage credit risk. It sets out the standards helpful in achieving a high-quality loan portfolio with optimal returns.
26. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the
Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the trading window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.
27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUTGO
During the year under review, the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are as follows:
Conservation of Energy
Your Company carries out its business in an environmental friendly manner and is on the look-out for different ways and means to reduce the consumption of energy in its business activity.
Technology Absorption, Adaption and Innovation
The Company continues to use the latest technologies for improving quality of its services. The Companys business does not require significant import of technology.
Foreign Exchange Earnings and Outgo
There was no foreign exchange earnings and outgo in the Company during the financial year.
28. MATERIAL CHANGES AND COMMITMENTS, IF ANY
There was no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report;
29. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013 to the Board of Directors during the year under review
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review, provision of section 135 and Schedule VII of the Companies Act, 2013 pertaining to Corporate Social Responsibility are not applicable to our Company. Hence, details of expenditures on CSR activities are not required to be furnished.
31. CREDIT RATING
There was no credit rating obtained from any agency during the period under review.
32. LISTING OF SECURITIES
Presently, the Securities of the Company are listed on BSE Limited, Mumbai. The listing fee for the financial year 2019-20 has been paid.
33. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed-off during the year 2018-19.
|No of complaints received||0|
|No of complaints disposed off||N.A.|
Your directors would like to place their grateful appreciation for the assistance and co-operation received from the Companys bankers during the year under review. The directors also acknowledge with appreciation the support and co-operation rendered by various Government Agencies and Departments. Your Directors would also wish to place on record their deep sense of appreciation for the continued support of all the investors of the Company.
|By order and on behalf of the Board|
|M/s Latent Light Finance Limited|
|Place: New Delhi||(Deepak Nagar) (Dharmender Singhal)|
|Date: 14th August, 2019||Director||Director|
|(DIN: 00043654)||(DIN: 03257550)|