Richfield Financial Services Ltd Directors Report.

FOR THE FINANCIAL YEAR ENDED 31ST DAY OF MARCH, 2019

Dear Shareholders,

Your Directors take pleasure in presenting this 27th Annual Report along with Audited Financial Statement for the financial year ended 31st March, 2019.

1. FINANCIAL RESULTS:

The Companys financial performance for the year under review along with previous years figures are given hereunder:

(Amount in lakhs, except per share data)

Particulars For the Year ended 31.03.2019 For the Year ended 31.03.2018
Net Sales /Income from Business Operations 77.20 66.38
Other Income 0.34 0.41
Total Income 77.54 66.79
Total Expenditure excluding Depreciation and Tax 21.74 48.82
Profit before Depreciation and Tax 55.80 17.97
Depreciation 0.03 0.07
Profit before Tax 55.77 17.90
Provision for Taxation & Deferred Tax 4.55 0.01
Net Profit after Tax 51.22 17.89
Earnings per share (Basic)/ (Diluted) 1.37 0.48

During the financial year 31st March, 2019, your company has earned a profit of 51,21,865/-, which is 33,32,623/- more than the previous financial year.

2. BRIEF DESCRIPTION OF THE STATE OF COMPANYS AFFAIRS:

The Company is a Non-Banking Finance Company and is presently engaged in the business of Investing and Financing.

In the multi-tier financial system of India, importance of NBFCs in the Indian financial system cannot be neglected. The Company expects that with a stable and a reformed government at the center, there will be positive growth and further rationalization of capital market, which will lead to more investment, value creation, capitalization and thus the additional wealth for investors and see better prospects in near future. Also, with the growing economy there will be more opportunities for financing which will prove beneficial for our company. The Company expects better results in near future in anticipation of the policy reforms combined with the dedication of the highly motivated team with excellent understanding of the operations along with magnificent customer relation skills.

3. ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Form MGT-9 and is attached to this Report as “Annexure-I”.

4. DIVIDEND:

In view of strengthening the financial position of the Company and to enhance the reserve base of the Company your directors are not recommending any dividend during the financial year.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of section 125 of the Companies Act, 2013 is not applicable to the Company.

6. ISSUES/ALLOTMENT OF SHARE CAPITAL:

During the financial year the Company has not allotted any equity shares.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Associate and Joint venture Company.

8. 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 laid down by the Board is known as “code of business conduct” which forms an Appendix to the Code. The Code has been posted on the Companys website www.rfsl.co.in.

9. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year and the date of this report.

10. TRANSFER TO RESERVES:

As per the statutory requirement for NBFC Companies, the company has transferred a sum of Rs 10,24,373/- to RBI Reserve Fund.

11. CORPORATE GOVERNANCE:

Your Company follows the principles of the effective corporate governance practices. As per the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, compliance with the provision of Regulation 15 is not mandatory to our Company, since it paid up share Capital does not exceed the threshold limit of Rs. 10 crore and Net worth of Rs. 25 Crore. Hence, the Company is not required to address Reports on Corporate Governance, certificate/s or any compliance pertaining thereto.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Your Company is a Non-Banking Financial Company, and has complied with the provision of section 186 of the Companies Act, 2013 to the extent applicable.

13. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

Your Companys Board, at present comprises of following Six (6) Directors:

SN Name Category
1 Mrs. Rajni Kankaria Non-Executive Woman Director
2 Mr. Rajesh Kumar Kankaria Non-Executive Promoter Director
3 Mr. Jai Narayan Gupta Non-Executive Promoter Director
4 Mr. Subodh Kumar Agrawal Independent Director
5 Mr. Sikhar Chand Choradia Independent Director
6 Mr. Rishabh Kankaria Managing Director

Brief note on Directors seeking appointment / re-appointment / resignation at the ensuing AGM:

Mrs. Rajni Kankaria (DIN-00097996) has been appointed as the Non-Executive Women Director in the Board Meeting held on 26th November, 2018 who shall hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing her candidature for the office of Director. Further the Nomination and Remuneration Committee and Board of Directors of the Company have also recommended the appointment of Mrs. Rajni Kankaria (DIN-00097996) as a Non-Executive Women Director.

Ms. Meenakshi Daga, (DIN-06995535) Non Excutive Women Director has resigned from the responsibility of Directorship of the Company from 26th November, 2018

Mr. Abhijit Pugalia, (DIN-05172495) Managing Director has resigned from the post of Managing Director w.e.f. 11th November, 2018

Mr. Rishabh Kankaria (DIN-05325575) has been appointed as the new Managing Director of the company in the Board Meeting of the Company held on 26th November, 2018 on such terms and conditions and such remuneration, as recommended by Nomination and Remuneration Committee and placed and approved in the meeting of the Board.

14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the year under review Six meetings were held on the following dates:

28th May, 2018, 30th May, 2018, 10th August, 2018, 13th November, 2018, 26th November,2018, and 7th February, 2019.

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013, details of the Directors participation at the Board Meetings are as under:

Attendance at the Board Meetings held on
Name of Director 28.05.2018 30.05.2018 10.08.2018 13.11.2018 26.11.2018 07.02.2019
Mr. R K Kankaria
Mr. J N Gupta
Mr. Subodh Kumar Agrawal
Mr. S C Choradia
Mrs. Meenakshi Daga
Mr. Abhijit Puglia
Mrs. Rajni Kankaria
Mr. Rishabh Kankaria

Mr. S. C. Choradia was the Chairman of all the above Board Meetings.

15. PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 the Board has carried out the 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 Compliance Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement safeguarding the interest of the Company and its minority shareholders etc. The performance evaluations of the Independent Directors were carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

16. COMMITTEES OF THE BOARD :

As per the provisions of Companies Act, 2013, the Company has the following four committees viz., Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee.

1. AUDIT COMMITTEE

The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect of auditing and accounting matters. It also supervises the Companys financial reporting process, reviewing Quarterly, Half yearly and Annual financial results, adequacy of internal control systems, internal audit function, discussions with the auditors about the scope of audit including the observations of the auditors and discussion with internal auditors on any significant findings and also to investigate any activity within its terms of reference and to seek any information it requires from any employees and to secure the attendance of outsiders with relevant experience and expertise, where considered necessary.

The Audit Committee continued working under Chairmanship of Mr. S.C. Choradia with Mr. R.K. Kankaria and Subodh Kumar Agarwal as co-members.

During the year, the sub-committee met on four occasions with full attendance of all the members viz. 30th May, 2018, 10th August, 2018, 13th November 2018, and 7th February, 2019

The composition of the Audit Committee as at March 31, 2019 is hereunder:

SN Name of the members Category Designation
1 R K Kankaria Non-Executive Director Member
2 Sikhar Chand Choradia Independent Director Chairman
3 Subodh Kumar Agrawal Independent Director Member

Attendance at the Audit Committee held on

Name of the members 30.05.2018 10.08.2018 13.11.2018 07.02.2019
R K Kankaria
Sikhar Chand Choradia
Subodh Kumar Agrawal

2. NOMINATION & REMUNERATION COMMITTEE

The Company has constituted Nomination and Remuneration Committee and presently the committee comprises of 3 (three) Directors, out of which 2 are Independent Directors.

The composition of the Nomination & Remuneration Committee as at March 31, 2018 and details of the Members participation at the Meetings of the Committee are as under:

Name of Director Category

Attendance at the Nomination & Remuneration Committee Meetings held on

28.05.2018 26.11.2018
Mr. S C Choradia (Chairman) Independent Director
Mr. Subodh Kumar Agrawal (Member) Independent Director
Mr. R K Kankaria (Member) Non-Executive Director

3. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board of Directors of the Company has constituted a Committee which functions as ‘Stakeholders Relationship Committee, consisting of three members, chaired by Mr. Sikhar Chand Choradia, Independent Director.

The Committee, inter-alia, deals with various matters relating to:

• transfer/transmission of shares/debentures and such other securities as may be issued by the Company from time to time; issue of duplicate share certificates for shares/debentures and other securities reported lost, defaced or destroyed, as per the laid down procedure;

• issue new certificates against subdivision of shares, renewal, split or consolidation of share certificate / certificates relating to other securities.

• to approve and monitor dematerialization of shares or other securities and all matters incidental or related thereto;

• to authorize the Company Secretary and Head Compliance / other Officers of the Share Department to attend to matters relating to non-receipt of annual reports, notices, non-receipt of declared dividend / interest, change of address for correspondence etc. and to monitor action taken; monitoring expeditious redressal of investors / stakeholders grievances and all other matters incidental or related to shares, debenture

Details of shares transfer/transmission approved by the Committee and Shareholders/Investors grievances are placed at the Board Meetings from time to time.

The Company has not received any Complaints during the year.

The composition of Stakeholders Relationship Committee as at March 31, 2019 and details of the Members participation at the Meetings of the Committee are as under:

Attendance at the Stakeholders Relationship

Name of Director Category Committee Meetings held on
30.05.2018 10.08.2018 13.11.2018 07.02.2019
Mr. S C Choradia (Chairman) Independent Director
Mr. Subodh Kumar Agrawal (Member) Independent Director
Mr. J N Gupta (Member) Non-Executive Promoter Director

Details of Complaints received during the Year 2018-19

Nature of Complaints / Queries No of Complaints / Queries received No of Complaints not solved to the satisfaction of Shareholder
Transfer of Shares Nil Nil
Non-receipt of Annual Report Nil Nil
Pending Share Transfers Nil Nil

The company confirms that there were no share transfers lying pending as on 31.03.2019, and all request for dematerialization and re-materialisation of shares as on that date were confirmed into the NSDL /CDSL system. For any query contact the Company Secretary of the Company.

Name, Designation & Address of the Compliance Officer

Mr. Soumitra Ghosh

Company Secretary

Richfield Financial Services Limited

33, Brabourne Road, 5th Floor,

Kolkata-700001

Email: rfsl.nbfc@gmail.com

Phone No: 033-2242-5812

4. RISK MANAGEMENT COMMITTEE

The Board of Directors of the Company has constituted a “Risk Management Committee” consisting of Three members, all the members of the Committee are Non-Executive Directors.

The objectives and scope of the Risk Management Committee broadly comprises:

• Oversight of risk management performed by the executive management;

• Reviewing the BRM policy and framework in line with local legal requirements and SEBI guidelines; Reviewing risks and evaluate treatment including initiating mitigation actions and ownership as per a predefined cycle. Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

The composition of the Risk Management Committee as at 31st March, 2018 and details of the Members participation at the Meetings of the Committee are as under:

Name of the Member Category Attendance at the Risk Management Committee meeting held on
Mr. S C Choradia (Chairman) Independent Director, Chairman 28.05.2018
Mr. Subodh Kumar Agrawal (Member) Independent Director 28.05.2018
Mr. J N Gupta (Member) Non-Executive Director 28.05.2018

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Board has adopted a Whistle Blower Policy for the Company. This policy is formulated to provide opportunity to all the employees to access in good faith to the Audit Committee of the Company in case they observe any unethical and improper practice or behaviour or wrongful conduct in the Company. Further to prohibit managerial personnel from taking any adverse personnel action against such employee.

18. REMUNERATION AND NOMINATION POLICY:

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members.

Mr. Rishabh Kankaria (DIN-05325575) has been appointed as the Managing Director of the Company on 26.11.2018 pursuant to resignation letter placed by Mr. Abhijit Pugalia (DIN-05172495), Ex-Managing Director of the Company on 11.11.2018.

Mrs. Rajni Kankaria (DIN-00097998) has been appointed as Non-Executive Women Director on 26.11.2018 pursuant to resignation letter placed by Ms. Meenakshi Daga (DIN-06995535), Ex-Non-Executive Women Director of the Company on 26.11.2018

19. RISK MANAGEMENT POLICY:

The Company has proper mechanism and management policies for the business risk associated with the Company. It has well diversified portfolio on various blue chip companies as evident from the investment details attached here unto in the notes to the financial statements.

Your Company has appointed Mrs. Shradha Jhawar, Employee of the Company as an Internal Auditor of the Company to conduct quarterly auditing of the Company and further for identifying the areas of the risk, its nature, its severity, occurrence and other risk detecting and risk control mechanism.

Therefore, the Company has proper mechanism and management policies for the business & financial risk associated with it that can threaten the very existence of the Company.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company is abiding by the provisions referred to in sub-section (1) of section 188 of the Companies Act, 2013 relating to the particulars of every contract or arrangements entered into by the Company with its related parties. However, during the financial year 2018-19, there is no material significant related party transaction made by the company with its Promoters, Key Managerial Personnel or other designated persons which have a potential conflict with interest of the company at large.

However, details of related party transactions had been stated in Form AOC-2, forming part of this Report as “Annexure-III”.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE:

During the year under review, there are no significant and material orders passed by any regulatory Authority or courts or tribunals that would impact the going concern status of the Company and its future operation.

22. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall 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) 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 frauds and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors has laid down internal financial controls to be followed by 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.

23. STATUTORY AUDITORS:

M/s. H. R. Agarwal & Associates, Chartered Accountants, (Firm Registration No. 323029E), having their office at 219C Old China Bazar Street, 1st Floor, Room No. B-6, Kolkata-700001 are continued to hold the office of the Auditors of the Company for the remaining periods. The Company has received a certificate from the above Auditors to the effect that if their appointment has been confirmed, it would be in accordance with the provisions of the Companies Act, 2013.

24. SECRETERIAL AUDIT:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has re-appointed Ms. Richa Shukla, Practicing Company Secretary, (C.P. No. 15080) to undertake the Secretarial Audit of the Company. The Secretarial Audit report in Form MR-3 is annexed herewith as “Annexure-II” and forms an integral part of this Report.

25. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:

The observations of the auditors in their reports are self-explanatory and therefore, in the opinion of the Directors, do not call for further comments.

There were no qualifications, reservations or adverse remarks made by the Statutory Auditors and the Practicing Company Secretary given in their reports.

26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Internal control system and actual performance is closely reviewed on quarterly and yearly basis. Its internal control system and procedure are commensurate with the size of the operation and are adequate to ensure safeguarding its resources against loss, unauthorized use or disposition and also to ensure that all transactions are authorized, recorded and reported correctly.

27. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Companies (Corporate Social Responsibility Policy) Rule, 2014 is not applicable to the Company. Hence there is no need to develop policy on CSR and take initiative thereon. However, your Company respects society value and make endeavor to contribute for the societal cause as far as possible.

28. ENVIORNMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean & safe environment. Since your company is a non-Banking financial company so the question of environment pollution does not arise.

However, the company ensures safety of all concerned, compliances environmental regulations and prevention of natural resources.

As required by the sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Your Company has not received any such complaints during the year under review.

29. HUMAN RESOURCES:

Your Company treats its “human resources” as one of its most important assets.

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business.

Your Company is continuously committed to nurturing, enhancing, retaining and development of talent on an ongoing basis through superior Learning & Organizational Development. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. Your Company stresses on lesser Employee Turnover and higher Employee Retention.

30. STATUTORY INFORMATION:

30.1 PARTICULARS OF EMPLOYEE

Pursuant section 197(12) of the Companies Act, 2013 and Rule 5(1) to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees are maintained in line with the provision of section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the registered office of the Company, 21 days before the Annual General Meeting of the Company and up to the date of the ensuing Annual General Meeting during the business hours on working days.

30.2 THE RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES

The ratio of the remuneration paid to the Directors and to that of the median employee of the Company is as under Remuneration paid to Mr. Rishabh Kankaria (Managing Director) is Rs.30,000/- p.m Remuneration paid to Mr. Abhijit Pugalia (Managing Director) is Rs.20,000/- p.m

Remuneration paid to the Median Employee -Rs. 21,000/- p.m.

The ratio between them is 1:0.42

There is no such employee in the Company Drawing Remuneration which in the aggregate exceeds Rs. 1,02,00,000/- employed throughout the financial year or Rs. 8,50,000/- or more per month employed during the part of the financial year, 2018-19. The Company has 3 permanent employees.

None of the employees of the Company is a relative of any Director of the Company. Further none of the Employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO

The provisions of Section 134 (3)(m) of the Companies Act, 2013, regarding conservation of energy and technology absorption, are not applicable.

Further there were no foreign exchange inflow or outgo during the period under review.

32. PUBLIC DEPOSIT

The Company does not have any deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

33. PRESERVATION OF DOCUMENTS

All the documents as required under the Act, has been properly kept at the registered office of the Company.

34. LISTING WITH STOCK EXCHANGE

The Company confirms that it has not defaulted in paying the Annual Listing Fees for the financial year 2018-19 to the Bombay Stock Exchange Limited (BSE) and the Calcutta Stock Exchange Limited (CSE), where the shares of the Company are listed.

35. ACKNOWLEDGEMENT:

The Directors would like to thank clients, shareholders, vendors, government agencies, bankers & all other business associates for their continued support during the year. We place on record our appreciation for the contributions made by the employees at all levels.

Address for Correspondence: For and on Behalf of the Board of Directors
REGISTERED OFFICE M/s Richfield Financial Services Limited
33 Brabourne Road, 5th Floor
Kolkata: 700-001
Email: rfsl.nbfc@gmail.com Rishabh Kankaria R K Kanakria
Website: www.rfsl.co.in Managing Director Director
Telephone No.: (033) 2242-5812 DIN: 05325575 DIN: 00097236
Place: Kolkata Siddharth Banthia Soumitra Ghosh
Date: 30.05.2019 Chief financial Officer Company Secretary