BOARD'S REPORT Dear Shareholders, The Directors have pleasure in presenting the 21st Annual Report along with the Audited Accounts of the Company for the financial year ended 31st March, 2015. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS Total Revenue: Total income declined by 85.47% to Rs. 1355.98 lakh for the financial year 2015 from Rs. 9329.18 lakh for the financial year 2014. Total Expenditure: . Total expenses declined by 85.51% to Rs. 1306.86 lakh for the financial year 2015 from Rs. 9690.88 lakh for the financial year 2014. Profits: Profit Before Tax (PBT) increased by 113.58% to Rs. 49.12 lakh in the financial year 2015. PBT Margin improved to 3.62 % of income in financial year 2015 as compared to loss in financial year 2014. Net Profit of the Company increased by 113.55% to Rs 49.12 lakh for the financial year 2015. During the year under review, the Company has earned major part of its income from providing Advisory services. Reserves Out of the profit available for appropriation an amount of Rs. 9.82 lakh has been transferred to Statutory Reserve and the balance has been carried forward to Profit & Loss Statement. Dividend In view of losses of the earlier years, the Directors do not recommend payment of dividend on Equity Shares for the Financial Year ended March 31, 2015. Vigil mechanism In line with the provisions of section 177 of the Companies Act, 2013, the Company has formed a Transparency and Ethics policy (TEP) to deal with instances of fraud and mismanagement if any and to ensure a clean and transparent environment for conducting business. The TEP policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be shown towards any person for a genuinely raised concern. Any employee can report such incident of violation and context thereto to the Ombudsman or director concerned in writing/by email/sms or by phone. Alternatively, the Ethics Helpline can be contacted to report any suspected or confirmed incident of fraud / misconduct. It provides for adequate safeguards against victimization of persons who use such mechanism and provides direct access to chairperson of Audit Committee. The TEP policy has also been placed on the website of the Company. Extract of Annual Return Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as Annexure 1. Statutory Auditors, their Report and Notes to Financial Statements Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s Shanker and Kapani, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the Annual General Meeting (AGM) of the Company held on 15th September, 2014 till the conclusion of the AGM to be held in the year 2019, subject to ratification of their appointment at every AGM to be held thereafter. The Company has received a Certificate from M/s Shanker and Kapani, Chartered Accountant, confirming their eligibility. Accordingly, the appointment of M/s Shanker and Kapani, Chartered Accountants as the Statutory Auditors is placed for ratification by the shareholders at the Annual General Meeting. The report of the Statutory Auditors is enclosed to this report. The Auditor's Report does not does not contain any qualification, reservation or adverse remarks. The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments. Secretarial audit During the year under review, in terms of Section 204 of the Companies Act, 2013 and Rules made there under, Ms. Jinal Dawda, Practicing Company Secretary had been appointed to conduct the Secretarial Audit of the Company. The report of the Secretarial Auditors is enclosed as Annexure 2 to this report. The report is self-explanatory and do not call for any further comments. Related party transactions During the year under review, the Company has entered into contract / arrangements with the related parties in the ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material . Thus the disclosures pertaining to Section 188(1) of the Companies Act, 2013 are not applicable. Information on Material Changes and Commitments There are no material changes or commitment affecting the financial position of the Company which have occurred between March 31, 2015 and the date of this Report. Risk Management Policy Risk is regarded as the threat of some event, action or loss of opportunity if it occurs, will adversely affect the business i.e. value to stakeholders, ability to achieve objective, ability to implement business strategies, manner of operation, reputation & Brand Image due to Internal and external factors. The Company has a Risk Management Policy, which lays down active process for identification and mitigation of risks. Risk Management Policy has been adopted by the Board of Directors of the Company. All concerned process owners of the company are regularly identifying & mitigating key risks in their respective domain. The Board reviews the risk management and mitigation plan for key risks from time to time. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and verified by Internal Auditors. Appropriate actions are being taken by the responsible concerned. Company's policy on director's appointment and remuneration including criteria The Nomination and Remuneration Committee and the Board of Directors at its Meeting held on 20th October, 2014 had laid down criteria for determining director's qualification, positive attributes and independence of director's, remuneration of directors and key managerial personnel and also criteria for evaluation of performance of directors, chairperson, non-executive directors and Board as a whole and also the evaluation process of the same. Criteria for Performance Evaluation of Executive Directors of the Company who are involved in day to day operations of the Company is assessed on the basis of Key Performance Indicators (KPl), which would be identified based on a) their commitment to achieve Company's goals and alignment with the strategic direction, b) their decision making ability, and c) their ability and actions to safeguard the interest of shareholders of the Company and weights assigned for each measure of performance keeping in view the distinct roles of each Executive Director. Performance of Non-Executive and Independent Directors of the Company who are not involved in day to day operations of the Company is assessed on the basis of: a) individual's continuing commitment to the role, strategic thinking, b) commitment of time for Board the other Committee meetings, c) individual's continuing commitment to spend time and effort learning about the Company and its business. The performance of the members of the Board and the Board as a whole were evaluated at the meeting of Independent Directors held on 20th March, 2015. As per Section 149 of the Companies Act, 2013, a Company shall have at least One Women Director on the Board of the Company. The Company has Ms. Purnima Pavle as Director on the Board since 11th October, 2013. The Company has devised a Policy for which includes criteria for performance evaluation of the non-executive directors and executive directors. The policy on Directors appointment and remuneration for Directors, Key Managerial Personnel, Senior Management Personnel including policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors is attached as Annexure 3. Significant and material orders passed by the regulators During the year under review, the Company had received a notice under SEBI (Prohibition of fraudulent and unfair trade Practices Relating to Securities market) Regulation, 2003, SEBI (Substantial Acquisition of shares and takeover) Regulations, 1997 and SEBI (Prohibition of Insider Trading) Regulation 1997 for violation of the SEBI Guidelines as mentioned in the Order and under which SEBI has imposed a penalty amounting Rs. 253.72 lakh. The directors want to clarify that the violation of the SEBI Guidelines as mentioned in the Order, pertains to the year prior to the acquisition of the Company by the present promoter i.e. Arihant Premises Private Limited ('Arihant'). The Company was initially managed by Singhal Group of Companies which was taken over by Poonam Fast Foods Private Limited in the year 2008. In the year 2013, Arihant, by providing open offer, in accordance with provisions of SEBI Takeover Regulations, 2011, acquired the controlling stake of the Company. At present, Arihant holds 74.25% of the voting Equity Share Capital of the Company. Your Directors further state that the said default as mentioned in the Order has not been committed by Arihant as.the violation pertains to the period from October 6, 2003 to January 28, 2004 wherein the Company was not managed by Arihant. The Company has filed an appeal before Securities Appellate Tribunal (SAT) Challenging the aforesaid order, hearing for which has not yet commenced. Internal financial controls The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of its business. Holding and Subsidiary The Promoter of the Company i.e. Arihant Premises Private Limited holds 74,24,670 equity shares which represents 74.25 10 I I Annual Report 2014 – 15 percent of the paid-up equity capital of the Company. Your Company continues to be a subsidiary company of Arihant Premises Private Limited, part of Lodha Group. During the year, under review, the Company did not have any subsidiary, joint ventures or associate companies. Directors and Key Managerial Personnel In terms of the provisions of Section 149 of the Companies Act, 2013, the Board of Directors at its meeting held on 12th August, 2014 had appointed Mr. Prakash Bhat (DIN No: 00654992) and Mr. Santosh Kumar Ojha (DIN No 02494357), as Independent Director for a term of 5 years which was approved by the Members of the Company at the AGM held on 15th September, 2015 to hold office up to September 14, 2019. The Company has received declarations from the Independent Directors viz. Mr. Prakash Bhat (DIN No: 00654992) and Mr. Santosh Kumar Ojha (DIN No 02494357), stating that they meet the criteria of independence as provided in Section 149(6) of the Act. Mr. Nilesh Rawat (DIN No: 06705140), Managing Director, Mr. Kunti Prakash Inani, CFO and Mr. Mahesh Bhatt Company Secretary are the Key Managerial Personnel as per the provisions of the Companies Act, 2013, of which Mr. Nilesh Rawat DIN No: 06705140), Managing Director and Mr. Kunti Prakash Inani, CFO, were acting in the said capacity before the commencement of the Companies Act, 2013. Mr. Hemanshu Mumbaiwala, was the Company Secretary of the Company till 6th May, 2014 and Mr. Sanjay Gupta was the Company Secretary from 7th May, 2014 to 13th October, 2014 and were also Key Managerial Personnel's as per the provisions of the Companies Act, 2013. During the year Mr. Mahesh Bhatt was appointed as a Company Secretary of the Company w.e.f. 29th January, 2015 as per the provisions of Companies Act, 2013. Ms. Purnima Pavle (DIN No: 06705133) Director, retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Fixed Deposits Your company has neither invited nor accepted or renewed any deposit from the public and/or member under the provisions of Companies Act, 2013 or rules made thereunder, during the financial year under review. Particulars of Loans, Guarantees or Investments The provisions of Section 186 of the Act pertaining to investment and lending activities is not applicable to the Company since the Company is an NBFC. During the year under review, the Company has not provided any guarantees and /or securities in connection with loans to other bodies corporate or person covered under Section 186 of the Companies Act, 2013. Particulars of Employees Pursuant to Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement of particulars of employees is annexed as Annexure 4. (c) Foreign exchange earnings and Outgo The foreign exchange earned in terms of actual inflows during the year and the foreign outgo during the year in terms of actual outflows. During the year ended 31st March, 2015, the Company earned Rs. 12 crores and did not spent any expenditure in foreign currency. Directors' Responsibility Statement Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures thereof; (b) 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 ended on 31st March, 2015 and of the profit of the company for that period; (c) 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 and other irregularities; (d) the directors have prepared the annual accounts on a going concern basis; and (e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; (f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Corporate Governance and Management Discussion and Analysis Report As per clause 1(a) of SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014, compliance of the provisions of the Clause 49 of the Listing Agreement shall not be mandatory to a Company having its paid up equity share capital not exceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 crore as on last day of the previous financial year. Since the paid up Equity Share capital and Networth of the Company was not exceeding Rs. 10 crores and Rs. 25 crores respectively, the Company was not required to comply with the requirement of Clause 49 of the Listing Agreement and hence a report on Corporate Governance and Management Discussion Analysis does not form part of this Report. Acknowledgement Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders, Banks and Company's valued investors and all other business partners for their continued co-operation during the year. By Order of the Board For Roselabs Finance Limited Nilesh Rawat Managing Director DIN:06705140 Purnima Pavle Director DIN: 06705133 Registered Office 416, Anand Mangal Complex, B/H, Omkar House, C.G. Road, Navrangpura, Ahmedabad - 380009 Tel No: +91.22. 23024400 Fax: +91.22.23024550 Website: www.roselabsfinancelimited.in CIN No: L67120GJ1995PLC024070 Email: roselabsfinance@lodhagroup.com Place: Mumbai Date: 28th August, 2015 |