Som Datt Finance Corporation Ltd Directors Report.

SOM DATT FINANCE CORPORATION LIMITED

Your Directors have pleasure in presenting their report on the business and operation of your Company together with the Audited Financial Statements for the year ended March 31, 2020.

FINANCIAL HIGHLIGHTS

Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (‘Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 from April 01, 2019 and the effective date of such transition is April 01, 2018. The performance of the Company for the FY 2019-2020 is summarised below :

(Rs. in Lacs)
FINANCIAL RESULTS Year ended 31.03.2020 Year ended 31.03.2019
Gross Total Income 48.69 60.46
Profit / Loss before Depreciation & Taxation 2.74 23.59
Less: Depreciation 0.24 0.24
Profit Before tax 2.50 23.35
Less: Provision for Income Tax 0.54 2.90
Add: Adjustment of tax relating to earlier periods 11.92 (0.38)
Less: Provision for Deferred Tax 8.51 3.21
Add: MAT Credit Entitlement 0.54 0
Net Profit /(Loss) after Tax 5.91 16.86
Retained Earnings as at the beginning of the Year 231.84 218.51
Profit After Tax 5.91 16.86
Retained earnings before appropriations 237.75 235.37
Less: Special Reserve (As per RBI Guidelines) 1.18 3.52
Retained Earnings as at the end of the Year 236.57 231.85

DIVIDEND AND RESERVES

During the year under review, your Directors do not recommend any dividend for the financial year ended March 31, 2020. Similarly, no amount was recommended to transfer to Reserves.

OPERATIONS AND STATE OF COMPANY AFFAIRS

During the year under review, your Companys total Income has decreased from Rs.60.46 Lacs to Rs. 48.69 Lacs and its profit after tax decreased from Rs.16.86 Lacs to Rs. 5.91 Lacs.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis, as required under Regulation 34(3) of SEBI (LODR) Regulations, 2015 read with Schedule V of said Regulations, forms part of this Board Report.

CHANGE IN MANAGEMENT CONTROL AND SHAREHOLDING

The Acquirers i.e. Mr. Kuldip Singh Rathee and Mrs. Vijay Rathee entered into a Share Purchase Agreement dated May 11, 2019 (‘SPA) with all the members of the promoter and promoter group of the Company, namely Mrs. Usha Datt, Mrs. Latika Datt Abbott, Mrs. Anuradha Datt Munjal, Mrs. Charu Datt Bhatia, Mrs. Sadhana Singh, Mrs. Anjali Anand, Som Datt Enterprises Private Limited, Som Datt Power Limited and Som Datt Investments and Finance Company Private Limited (‘Sellers), pursuant to which, the Sellers had agreed to sell and the Acquirers had agreed to purchase 69,24,255 equity shares of the Company having a face value of Rs. 10 each, representing 69.19% of the total issued, outstanding and fully paid-up equity share capital carrying voting rights of the Company, for an aggregate consideration of Rs. 10,17,86,548.50 (Rupees Ten Crores Seventeen Lakhs Eighty Six Thousand Five Hundred and Forty Eight and Paise fifty only), computed at Rs. 14.70 (Rupees Fourteen and paise seventy only) per Equity Share.

The Company received the approval of the Reserve Bank of India, for the aforesaid transaction vide its letter dated 30/09/2019.

Pursuant to the SPA, an Open Offer was made by the Acquirers i.e. Mr. Kuldip Singh Rathee and Mrs. Vijay Rathee in pursuance of Regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeover) Regulation, 2011 for substantial acquisition of shares and voting rights accompanied with change in control and management of the Company to all the public shareholders of the Company to acquire upto 26,02,073 fully paid-up equity shares of face value of Rs. 10 each carrying voting rights, representing 26.00% of the total voting equity share capital of the Company on a fully diluted basis.

Out of Total 26,02,073 shares offered to be acquired by Open Offer, 15,395 shares were tendered by the public shareholders of the Company and acquired by the Acquirer i.e. Mr. Kuldip Singh Rathee.

After the Open Offer, the Sellers sold their entire shareholding of 69,24,255 equity shares of the Company having a face value of Rs. 10 each, representing 69.19% of the total issued, outstanding and fully paid-up equity share capital carrying voting rights of the Company, on the aforesaid consideration, to the Acquirer and SPA was fully consummated on 27/01/2020.

Subsequent to the above, the Sellers requested their reclassification from promoter category to public category under Regulation 31A of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. An appropriate resolution seeking shareholders approval on the matter forms part of the Notice.

DIRECTORS, KEY MANAGERIAL PERSONNEL AND COMMITTEES

During the year under review, the following are the changes in the Board of Directors and Key Managerial Personnel of the Company in chronological order :

Mr. Amit Kumar Verma, Company Secretary of the Company resigned w.e.f. April 30, 2019.

Mr. Sandip Kumar Chaubey was appointed as Company Secretary & Compliance Officer of the Company w.e.f. December 12, 2019. Mrs. Latika Datt Abbott, Managing Director resigned w.e.f. the close of working hours of December 27, 2019. Mrs. Usha Datt, Director (Non- Executive) resigned w.e.f. the close of working hours of December 27, 2019.

Mrs. Charu Datt Bhatia, Director (Non- Executive) resigned w.e.f. the close of working hours of December 27, 2019. Mr. Satish Kumar, Independent Director resigned w.e.f. the close of working hours of December 27, 2019.

Mrs. Vijay Rathee was appointed as an Additional Director and Managing Director of the Company w.e.f. December 27, 2019. Mr. Kuldip Singh Rathee was appointed as an Additional Director (Non-Executive) w.e.f. December 27, 2019. Mr. Rajvir Singh Chhillar was appointed as an Additional Director (Independent) w.e.f. December 27, 2019. Mr. Hardeep Kumar Mahotra was appointed as an Additional Director (Independent) w.e.f. January 29, 2020. Mr. Lalit Mohan Segat, Independent Director resigned w.e.f. February 03, 2020. Mr. Ankit Yadav was appointed as Chief Financial Officer of the Company w.e.f. June 27, 2020 in place of Mr. Rajeev Gautam.

An appropriate resolutions seeking shareholders approval for appointment of Mrs. Vijay Rathee, Mr. Kuldip Singh Rathee, Mr. Rajvir Singh Chhillar and Mr. Hardeep Kumar Mahotra forms part of the Notice.

The Company has several Committees and the details alongwith its meetings have been included in the Corporate Governance report.

SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE

The Company sold its entire investment in Som Datt Infosoft Private Limited on April 24, 2019 and accordingly the said company ceased to be its subsidiary company effective said date. The Company in terms of the provisions of the Companies Act, 2013, has no Associate Company and/or Joint Venture Company during the year ended 31st March, 2020.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6) of the Companies Act, 2013.

BOARD EVALUATION

The evaluation of Board, Committee(s) and individual Directors was carried out based on structured questionnaire encompassing parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place the Vigil Mechanism / Whistle Blower Policy with a view to provide for adequate safeguards against victimization of persons who use such mechanism and made provisions for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The details of the Vigil Mechanism and Whistle Blower Policy are available on the website of the Company.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy as approved by the Board may be accessed on the Companys website i.e. www.somdattfin.com.

MEETINGS OF THE BOARD

During the year under review, Ten (10) Board Meetings were held on April 24, 2019, May 21, 2019, May 30, 2019, September 1, 2019, September 13, 2019, November 14, 2019, November 18, 2019, December 12, 2019, December 27, 2019, February 11, 2020 and four (4) Audit Committee meetings were held on May 30, 2019, September 13, 2019, November 14, 2019 and February 11, 2020. In accordance with the requirement from time to time other Committee meetings were held. The attendance of the Directors who attended the Board Meetings and Committees thereof have been included in the Corporate Governance Report.

CODE OF CONDUCT

The Code of Conduct laid down by the Board is in operation in the Company. All Board members and senior management personnel have affirmed the compliance with the said Code. The declaration to this effect is enclosed to the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013, to the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statements that :

a. in the preparation of the annual accounts for the year ended March 31, 2020, the applicable Ind - AS accounting standards had been followed along with proper explanation relating to material departures, if any; 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 the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. the Directors had prepared the annual accounts on a going concern basis; e. 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 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.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) (a) of the Companies Act, 2013 (the ‘Act) read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. There are no loans, guarantees, and securities granted by the Company. There are no investments made by the Company in respect of which provisions of Section 186 of the Act are applicable. The details of Investments made by the Company in the ordinary course of business are furnished under Note 5 of the Notes forming part of the Financial Statements for the year ended March 31, 2020.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Policy on Related Party Transactions may be accessed at the Companys website at www.somdattfin.com. All contracts/arrangements/transactions entered into by the Company with the related parties were on arms length basis. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form No. AOC-2 and the same forms part of this report.

Disclosure related to transactions of the listed entity with person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company have been disclosed in the accompanying Financial Statement of the Company. Please refer to Note No. 33 of the Financial Statement of the Company.

MAINTENANCE OF COST RECORDS

The Company is not required to maintain Cost records under Section 148(1) of the Companies Act 2013.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors (IDs) on the Board of the Company are well versed with the Companys business model and the nature of industries in which it is operating. A familiarization programme for IDs laid down by the Board has been posted on the Companys website at www.somdattfin.com.

RISK MANAGEMENT

The detail of risks and other concerns are included in the Management Discussion and Analysis which is the part of this Directors Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to contribute for Corporate Social Responsibility.

SEXUAL HARASSMENT POLICY IN WORK PLACE

The Company is not required to constitute an Internal Complaints Committee as the number of employees in the Company are below the threshold limit as prescribed under the Sexual Harassment of Women (Prevention, Prohibition and Redressal) Act, 2013.

EXTRACT OF THE ANNUAL RETURN

In terms of provision of Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under Sub section (3) of the Section 92 in Form MGT-9, forms part of the Boards Report. The Annual Return may be accessed on the Company website i.e. www.somdattfin.com.

FIXED DEPOSITS

The Company has neither invited nor accepted any deposits from the public or its employees under Section 73 of Companies Act, 2013 and rules made thereunder, during the year under review.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS

There is no significant and material order, after March 31, 2020, passed by any of regulators, court of law or tribunals impacting the going concern status of the Company or impacting its operations in future. However, impact due to Covid 19 pandemic and consequent lockdown has been covered in the Management Discussion and Analysis.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has an internal financial controls system, commensurate with the size, scale and complexity of its operation. The details have been included in the Management Discussion and Analysis which is the part of this Boards Report.

STATUTORY AUDITORS

M/s. D.S. Talwar & Co. (Firm Registration No.000993N) was appointed as the statutory auditors of the Company for a period of five consecutive years from the conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting to be held in the year 2022.

The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

M/s. D.S. Talwar & Co. (Firm Registration No.000993N) has furnished a certificate of their eligibility and consent under Section 139 and 141 of the Act and the Companies (Audit and Auditors) Rules 2014 for their continuance as the Auditors of the Company for the FY 2020-21. In terms of the Listing Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

AUDITORS REPORTS

The Auditors Report on the Audited Financial Statement of the Company for the year ended 31st March, 2020 do not contain any qualification, reservation or adverse remark so need not require any explanation or comment.

SECRETARIAL AUDIT

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 has appointed Mr. Naveen Naranag of M/s Naveen Narang & Associates, Company Secretary in practice as Secretarial Auditor of the Company to conduct the Secretarial Audit for the Financial Year ended March 31, 2020.

The Secretarial Audit Report for the Financial Year ended on March 31, 2020 issued by Secretarial Auditor do not contain any other qualification, reservation or adverse remark except certain non-compliances pointed out in Secretarial Audit Report forming part of this Directors Report, under the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, made under the regime of earlier management, for which corrective actions were already taken by the Company from time to time and the Company also deposited the fine imposed by the Bombay Stock Exchange and made the default good.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provision of Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 of Companies (Account) Rules 2014 regarding conservation of energy technology absorption and foreign exchange earnings and outgo is given below is as under:

I. Conservation of energy : N.A
II. Technology Absorption : N.A
III. Foreign Exchange Earnings & Expenditure
(a) Foreign Exchange Earnings : Nil
(b) CIF Value of Import : Nil
(c) Foreign Exchange Expenditure: Nil

REMUNERATION AND PARTICULARS OF EMPLOYEES

During the year under review, the Company had no employees on its rolls who was in receipt of remuneration attracting the provisions of Section 197(12) of Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, in the midst of the FY 2019-20, there was substantial change in the Management of the Company such as resignation of previous Managing Director and Company Secretary, appointment of new Managing Director and Company Secretary and therefore remuneration of the said Managing Director and Company Secretary (previous and new both) were paid for the part of the year only. In addition to Managing Director and Company Secretary only CFO of the Company was entitled to remuneration. Except as aforesaid no other permanent employee was on the rolls of the Company. Therefore in the aforesaid circumstances, other information (such as median remuneration of employees and the ratio of Directors remuneration to the median remuneration etc.) due to non-availability of sufficient data, are not disclosed.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the report of Corporate Governance as required under Regulation 34 read with Schedule V of SEBI (LODR) Regulations, as a listed company, necessary measures are taken to comply with the requirements of Regulations of SEBI (LODR) Regulations, 2015. A report on Corporate Governance as stated above, along with a certificate of compliance from M/s Naveen Narang & Associates, Company Secretaries, forms part of this Boards Report.

CHANGE IN REGISTERED OFFICE OF THE COMPANY

The Company pursuant to the approval of the members accorded in the Extra Ordinary General Meeting held on December 16, 2019, is in the process of shifting of registered office of the Company from the State of West Bengal to the National Capital Territory (NCT) of Delhi.

ACKNOWLEDGEMENT

The Directors wish to convey their deep appreciation for the cooperation and assistance received from its stakeholders, valued customers, suppliers, banks, financial institutions, government authorities and stock exchanges. The Directors also wish to place on record their sincere appreciation of the devoted and dedicated services rendered by all the Employees of the Company.

Place : Gurugram Date : 27.06.2020

For and on behalf of the Board of Directors

Vijay Rathee Kuldip Singh Rathee Managing Director Director DIN-00042731 DIN- 00041032