Scintilla Commercial & Credit Ltd Directors Report.
Your directors have pleasure in presenting their 30thAnnual Report on the business and operations of Scintilla Commercial & Credit Ltd (the "Company") together with the audited statement of accounts for the year ended 31st March, 2019.
Financial Highlights (Standalone and Consolidated)
During the year under review, performance of your company is as under:
|(in Rs. )|
|Financial Result||Year Ended 31.03.2019||Year Ended 31.03.2018|
|Profit /(Loss) Before Tax||53,900||4,11,689|
|Less: Tax Expenses||13,632||97,436|
|Profit /(Loss) After Tax||40,268||3,14,253|
|Amount carried to Balance Sheet||40,268||3,14,253|
The consolidated performance of the group as per consolidated financial statements is as under:
|(in Rs. )|
|Financial Result||Year Ended 31.03.2019||Year Ended 31.03.2018|
|Profit /(Loss) Before Tax||(22,766)||5,08,088|
|Less: Tax Expenses||33,733||1,21,982|
|Share of Profit / (Loss) transferred to Minority Interest||(43,192)||32,333|
|Balance Profit / (Loss) C/F to the next year||(11,891)||3,53,773|
Operating & Financial Performance
During the year under review, the Company had earned a net profit of 40,268/- as compared to 3,14,253/- for the Financial Year 2017-18.
Further, the consolidated net loss of the Company stands at 55,083/- for the Financial Year 2018-19.
Consolidated Financial Statements
The consolidated financial statements of the Company as on March 31, 2019 are prepared in compliance with the applicable provisions of the Companies Act, 2013, and per applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with the Auditors Report thereon form part of the Annual Report. The Net Worth of the consolidated entity as on March 31, 2019, stood at 10,17,59,204/-as against 10,17,61,627/- at the end of the previous financial year.
Material Changes & Commitments
There are 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.
The Board of Directors of the Company does not propose to declare any dividend for the year 31st March, 2019.
Transfer to Reserves
The Board in its meeting held on May 30, 2019, proposes to carry an amount of 8,054/- to Statutory Reserve as per the existing provisions of the Companies Act, 2013 and rules there under read with the Reserve Bank of India Guidelines as applicable to the Company.
The paid up Equity Share Capital as on March 31, 2019 was 10,02,77,770/-. During the year under review, the company has not issued any shares or any convertible instruments.
Statutory & Legal Matters
There has been no significant and/ or material order(s) passed by any Regulators/ Courts/ Tribunals impacting the status.
However, there was a notice received by the company from BSE regarding issue related to shell companies and in this regard, Forensic Audit is under process.
Cash and cash equivalent as on March 31st 2019 was 3,64,200/- (previous year 7,82,920). The Companys working capital management is based on a well-organized process of continuous monitoring and controls.
The Company, being a Non Deposit Accepting NBFC, has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
Subsidiary / Joint Ventures / Associates
The Company has two Indian subsidiaries i.e., Jaimatarani Merchants Limited and Mericogold Trading Limited as on 31st March, 2019. None of the subsidiaries are material in nature.
In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in the prescribed format, AOC 1 is also included as the part of this report as Annexure-A.
In accordance Section 136 of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone financial statements, consolidated financial statements and related information and the audited annual accounts of the subsidiary companies have been placed on the website of the Company, www.scintilla.co.in.
Internal Financial Control and its adequacy
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
Risk Management Policy
Risk Management Programme involves risk identification, assessment and risk mitigation planning for strategic, operational, financial and compliance related risks across various levels of the organization. The Board of Directors and senior management team recurrently assess the operations and operating environment to identify potential risks and take necessary mitigation actions.
Directors and Key Managerial Personnel
Changes during the year
During the year under review, Mr. Dipak Kumar Kajrewal (DIN: 08280264) was appointed as the Managing Director of the Company with effect from 14th November, 2018. However, he resigned from the Board with effect from 14th August, 2019. Mr. Manoj Kumar Mundhara, the Independent Director also resigned from the Board with effect from 09th August, 2018 due to his pre-occupation.
Further, the Company had appointed Mr. Prabhat Marda as the Chief Financial Officer (CFO) of the Company. Mr. Shashi Chandra Jha was appointed as the Company Secretary and Compliance Officer of the Company with effect from 14th February, 2019 in place of Ms. Arpita Dey who resigned from the Company with effect from 12th November, 2018. Mr. Shashi Chandra Jha, Company Secretary also resigned from the Board with effect from 5th July, 2019. Thereafter, Ms Aayushi Kapur was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 14th August, 2019.
Retirement by rotation
In terms of Section 152 of the Companies Act, 2013, Mr. Jitendra Kumar Goyal retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Declaration by Independent Director(s)
The Board of Directors hereby certifies that the Independent Directors appointed on the Board, meet the criteria pursuant to Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements), 2015.
Necessary Declarations have been obtained from all the Independent Directors under Section 149 (7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements), 2015.
Familiarisation Programme for Independent Directors
To familiarize the Independent Directors with the strategy, operations and functions of our company, the executive directors/ senior managerial employees make presentation to the Independent Directors about the companys strategy, operations and service offerings, markets, finance, quality etc. The Director is also explained in detail the various compliances required from him as a Director under the various provisions of the Companies Act 2013, SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, SEBI (Prohibition of Insider Trading) Regulations, 2011, the Code of Conduct of the Company and other relevant regulations.
Further, at the time of appointment of an Independent director, the company issues a formal letter of appointment outlining his/ her role, function, duties and responsibilities as a director. The details of the familiarization programme imparted to independent directors are disclosed on the Companys website www.scintilla.co.in.
During the Financial Year 2018-19,4 (four) meetings of the Board of Directors of the Company were held. The details of which are given in the Corporate Governance Report. The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013.
Meeting of Independent Directors
In term of the requirement of Schedule IV to the Companies Act, 2013, the Independent Directors had a separate meeting on 14th February, 2019 without the attendance of Non-Independent Directors and management of the Company.
The Board has duly constituted Audit Committee, composition of which is provided under the Corporate Governance Report. There have been no instances during the year where recommendations of the Audit Committee were not accepted by the board.
Nomination & Remuneration Committee
The Board has duly constituted Nomination & Remuneration Committee, composition of which is provided under the Corporate Governance Report.
Stakeholders Relationship Committee
The Board has duly constituted Stakeholders Relationship Committee, composition of which is provided under the Corporate Governance Report.
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and to fix their remuneration. The Companys Remuneration Policy is available on the Companys website at www.scintilla.co.in.
As part of the policy, the Company strives to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors / KMPs of the quality required to run the company successfully.
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, for the year ended on 31st March, 2019 and state that :
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) the directors have 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;
(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) 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) the directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Related Party Transactions
All transactions entered with Related Parties during the financial year were on an arms length basis and were in ordinary course of business and the provision of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC- 2 is not required. The Audit Committee reviews all the related party transactions quarterly. Further, the Company has not made any materially significant related party transactions with Promoters, Directors or other designated person which may have a potential conflict with the interest of the Company at large.The Policy on Related Party transactions as approved by the Board has been uploaded on the Companys Website and may be accessed the Companys website at www.scintilla.co.in.
Your directors draw attention of members to notes to the Financial Statements which set out related party disclosures.
Annual evaluation of Boards Performance
Pursuant to provisions of Sections 134, 149, 178 read with Schedule IV of the Companies Act, 2013 and Regulation 19(4) read with Part D of schedule II of SEBI Listing Regulations, 2015, the Nomination and Remuneration Committee (NRC) of your Company has formulated and laid down criteria for performance evaluation of the Board (including Committees) and every individual director (including Independent Directors& Managing Director) covering, inter-alia, the following parameters namely:
1. Board Evaluation- degree of fulfillment of key responsibilities; Board culture and dynamics
2. Board Committee Evaluation-effectiveness of meetings; committee dynamics.
3. Individual Director Evaluation (including IDs)-contribution at Board Meetings.
Further, the Executive Directors are evaluated on key aspects of the role which includes inter-alia effective leadership to the Board and adequate guidance to the Management.
During the year, the Board had evaluated performance of its own, its Committees and the Individual Directors. After the evaluation process was complete, the Board was of the view that the performance of the Board as a whole was adequate and fulfilled the parameters as stipulated in the evaluation framework in its pro-growth activity and facing challenges operational, climatic and economic adversities during the year.
Your Companys Whistleblower Policy encourages Directors and employees to bring to the Companys attention, instances of unethical behaviour, actual or suspected incidents of fraud or leak of unpublished price sensitive information or any violation of the Code of Conduct that could adversely impact your Companys operations, business performance and / or reputation. The Policy provides that your Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. The Companys Policy ensures that no employee is victimised or harassed for bringing such incidents to the attention of the Company. The practice of the Whistleblower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee. The Whistleblower Policy is available on your Companys website www.scintilla.co.in.
Corporate Social Responsibility
The provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not applicable to the Company.
The shares of the Company are listed on the BSE Limited and Calcutta Stock Exchange Limited. The Companys shares are compulsorily traded in the dematerialized form. The ISIN allotted isINE892C01018.
At the 29th Annual General Meeting of the Company held in the year 2018, M/s C. K. Chandak & Co, Chartered Accountants, was appointed as statutory auditors of the Company for a period of five years till the conclusion of 34thAGM of the Company. In terms of the first proviso to section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. However, the Companies Amendment Act, 2017 has come into force on 7th May, 2018 and the requirement of ratification of Auditors in every Annual General Meeting has been omitted. Hence, M/s. C. K. Chandak & Co., Chartered Accountants, will hold office for 5 years and they would not be subject to ratification during continuation of in the office of the Auditors of the Company.
Mr. Pratik Agarwal, Practising Chartered Accountants was appointed as the Internal Auditor of the Company for the Financial Year 2018-19.
The Company had appointed Mr. Anand Khandelia, Practising Company Secretary as the Secretarial Auditor of the Company for the Financial Year 2018-19. According to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed as a part of this report as Annexure-B.
The Auditors Report read together with the Notes on Accounts are self-explanatory and therefore do not call for any further explanation and comments. No frauds were reported by the Auditor se under subsection 12 of Section 143 of the Companies Act, 2013.
The Secretarial Audit Report of the Company does not contain any qualification, reservation or adverse remark.
Cost Records and Cost Audit
The provisions of cost records and cost audit as specified by the Central Government under section 148 of the Companies Act, 2013 are not applicable to the Company.
Corporate Governance and Shareholders Information
Your Company has always taken adequate steps to adhere to all the stipulations laid down in SEBI (LODR) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report. Compliance Certificate from the Statutory Auditors of the company M/s. C.K. Chandak & Co., Chartered Accountants, confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is included as a part of this report.
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.scintilla.co.in.
All the Board members, the senior management personnel and personnel one level below the Board have confirmed compliance with the Code. All management staffs were given appropriate training in this regard.
Loans, guarantees and investments made by the Company
The Company being a NBFC Company, is exempted from the provisions of Section 186 of the Companies Act, 2013. Further, the Company has given loans and made investments during the year, the detail of which are given in the notes to the financial statements.
Conservation of Energy, Technology Absorption
Since the Company is an Investment Company, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable.
Foreign Exchange Earning and Outgo
There is no foreign exchange earnings and outgo during the year under review.
Extract of Annual Return
The extract of Annual Return for the financial year 2018-2019 in Form No MGT-9 may be referred to at the Companys official website www.scintilla.co.in.The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-C.
The information required pursuant to Section 197(12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached herewith as Annexure-D and forms a part of the Directors Report.
There are no employees who are in receipt of remuneration in excess of the limit specified under section 134(3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
RBI Guidelines for Non-Banking Financial Companies
The Company has observed all the prudential norms prescribed by the Reserve Bank of India. The Schedule as required in terms of Paragraph 13 of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2015 is appended to the Balance Sheet of the Company.
Provisions of Sexual Harassment
The Company 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. Further, the Company has constituted an Internal Complaints Committee for redressing the complaints against sexual harassment. There was no complaint received during the year.
Management Discussion and Analysis Report
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations (LODR), 2015, the Management Discussion and Analysis Report is presented in separate section forming part of the Annual Report.
The disclosures and reporting with respect to issue of equity shares with differential rights as to dividend, voting or otherwise is not applicable as the Company has not issued any such shares during the reporting period.
The disclosures and reporting on issue of shares (including sweat equity shares and Issue of Shares under Employees Stock Option Scheme) to employees of the Company under any scheme are not applicable as the Company has not issued any such shares during the reporting period.
The company has complied with the applicable provisions of Secretarial Standards SS-1 and SS-2 with respect to convening of Board Meetings and General Meetings during the period under review.
There is no change in the nature of the business of the Company.
Your Directors take the opportunity of placing their sincere appreciation to the Central Government, State Government, Banks, Financial Institutions, employees, associates, consultants and members of the company for their valuable guidance and support. The Board expects to receive their continued support in the future as well.
|For and on behalf of the Board of Directors|
|Vidhu Bhushan Verma||Jitendra Kumar Goyal|
|(DIN 00555238)||(DIN 00468744)|
|Date: 14th August, 2019|