DIRECTORS’ REPORT Your Directors take pleasure in presenting their 26th Annual Report and the Audited Financial Statements of the Company for the year ending 31st March, 2016. DIVIDEND: Due to constraints of profit, the Board do not recommend any dividend for the year 2015-16. REVIEW OF OPERATIONS: The industry of hire purchase and lease finance is in a very bad shape with increased competition and lack of support. Even the segment of mortgage and real estate loans has become non-profitable with difficulty in the collection of the installments. With great difficulty the company could collect the installments which are utilised for reduction of secured liabilities. In this scenario the Board of Directors in their meeting held on 15/10/2015 has decided to come out of the NBFC business. Accordingly the certificate of registration issued by the Reserve Bank of India under the provisions of section 45-IA of the Reserve Bank Act, 1934 has been surrendered for cancellation. The Reserve Bank has duly passed an order dated 21/03/2016 cancelling the certificate of registration. PUBLIC DEPOSITS: The Company had neither accepted nor held any public deposits during the year under review. In pursuance to Clause 5 (Part III) of the Non-Banking Finance Companies (Reserve Bank) Directions, 1998, your Directors wish to state that as on 31st March, 2016 there are no depositors who have not claimed or to whom the amount was not paid by the Company after the date on which the deposits became due for repayment and as on date there are no deposits that are matured and remained unclaimed or deposits that are claimed and remained unpaid. FUTURE PROSPECTS: After coming out of the non-banking finance business as mentioned hereinabove, the Company is intending to venture in to real estate and development sector. Plans are afoot to diversify the activities of the company in to other business sectors. DIRECTORS: The Director Smt. M V N S Sushma retires by rotation in the ensuing Annual General Meeting and being eligible offers herself for reappointment. The Additional Director Mr. M Karunakar, who was appointed by the Board at its meeting held on 31.12.2015, holds office only up tothe date of the ensuing Annual General Meeting by virtue of section 161 of the Companies Act, 2013. A notice in writing has been received proposing him for directorship of the Company along with a deposit of Rs.1.00 lakh as required under section 160 of the Act. Mr M Karunakar has also given his consent to act as director. DIRECTORS’ RESPONSIBILITY STATEMENT: Your Directors wish to confirm that: (i) in the preparation of annual accounts for the year ended 31st March, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; (ii) such accounting policies have been selected and applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2016 and of the profit of the company for the year ended on that date; (iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) accounts for the financial year ended on 31st March, 2016 are prepared on a going-concern basis. (v) internal financial controls to be followed by the Company has been laid down and such internal financial controls are adequate and are operating effectively; and (vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. INTERNAL FINANCIAL CONTROLS: The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were tested and no reportable material weakness in design or operation were observed. CONSERVATION OF ENERGY: Your Company not being a manufacturing company, there are no particulars to be given in respect of Conservation of Energy and Technology Absorption as required under rule 8(3) of the Companies (Accounts) Rules, 2014 STATUTORY AUDITORS: M/s Seshadry & Company, the auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility tothe effect that their re-appointment, if made, would be within the limits prescribed under the Act and that they are not disqualified. OBSERVATIONS OF AUDITORS: The observations made in the audit report are self-explanatory as given in the notes of accounts attached thereto and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR: The Board has appointed Sri K. Hemachand, Practising Company Secretary, to conduct the Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed herewith as “Annexure-I”. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as “Annexure-II”. MEETINGS: A calendar of meetings is prepared and circulated in advance to the Directors. During the year Twelve Board Meetings and four Audit Committee Meetings were convened and held; the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. LISTING: The shares of the Company were listed in BSE Ltd., Mumbai and the listing fee has been paid upto financial year 2016-17. CORPORATE GOVERNANCE: A detailed report on Corporate Governance along with the certificate from the Auditors of the Company regarding compliance of Corporate Governance as stipulated under clause 49 of the listing agreement is attached to this report. SUBSIDIARY COMPANIES: The Company does not have any subsidiaries. HUMAN RESOURCES: There are no employees covered in terms of the provisions of section 197(12) of the Act read ith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 to furnish the particulars mentioned in Rule 5(1) thereof. FOREIGN EXCHANGE INFLOW & OUTGO: There has been no foreign exchange inflow or outgo in the current year. APPRECIATION: Your Directors wish to place on record their sincere appreciation to the Company’s customers, Bankers, Financial Institutions and share holders for their continued support and faith in the Company. A word of appreciation is also due to the employees of the Company for their hard work and commitment. For and on behalf of the Board (Sd/-) M. Murali Krishna Chairman & Managing Director DIN: 01889812 Place: VIJAYAWADA Date : 23.05.2016 |