Boards' Report Your Directors present the 33rd Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2016. 1. STATE OF THE AFFAIRS YEAR UNDER REVIEW It may be observed from the Statement of Profit and Loss that total Income during the year is Rs. 25.83 lacs which mainly includes Interest on bank deposits of Rs. 3.17 lacs, profit on sale of balance part of office of Rs. 12.64 lacs at Baroda (Fixed Assets), sales tax refund of Rs. 4.16 lacs and provision no longer required written back of Rs. 5.23 lacs as against Rs. 2.37 lacs by way of interest income and Rs. 17.18 lacs by way of profit on sale of part office at Baroda for the previous year. GLFL has no source of income other than interest on Bank deposit while it has to meet the administrative expenses to run the company. Major expenses include Securities Listing Fees to stock exchanges and custodian fees to CDSL & NSDL, remuneration to Key Managerial Personnel appointed in accordance with the applicable provisions of the Companies Act, 2013, Printing & Postage of Annual Reports and professional and Legal expenses. After meeting the expenses, the Company incurred loss of Rs.15.15 lacs against the loss of Rs. 6.96 lacs in the previous year. Your company is not accepting the Public deposit since 1999-2000. During the 2010-11, Reserve Bank of India (RBI) changed Certificate of Registration from Category 'A' as Deposit Accepting Company to Category 'B 'as Non Deposit Accepting company. During the year 2004-05, the Hon'ble High Court of Gujarat had sanctioned the scheme of Compromise and Arrangement under section 391 of the Companies Act to discharge the liability of the Banks. Your company had released payment as per the court order. Approval in respect of deed of assignment of receivables is still awaited from the banks. As per the Court's order, the income received pertaining to assigned assets after July, 2004 is transferred to the consortium of Banks. Subsequent to the court's order, GLFL has recovered Rs.475 lacs till date from the charged assets and deposited with the member banks. It is worthwhile to note that the company has no external debts at the end of the year. 2. FINANCE PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES A Related Party Transaction Policy has been devised by the Board of Directors at its meeting held on 20th January, 2015. The said policy may be referred to, at the Company's official website at the below web link: http://www.gujaratleasefinancing.co.in/>policies During the year under the review there have been no related party transactions. FIXED DEPOSITS The company has discontinued accepting fixed deposits since September, 2000. There was no outstanding liability of fixed deposit as on 31st March, 2016. 3. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND The company does not have any liability towards unclaimed Fixed Deposits, Debentures and other liabilities. The liability have been discharged / transferred on completion of prescribed period to the Investor Education and Protection Fund. 4. SUBSIDIARIES The Company has three subsidiary companies viz. GLFL Housing Finance Limited, GLFL Securities Limited and GLFL International Limited. GLFL Housing Finance Limited After disinvestments of the major Housing Loan Portfolio, along with liabilities, in favour of LIC Housing Finance Ltd., recovery from balance accounts has been the main thrust area. During the year there was no further recovery due to few account left. The company has incurred the loss of Rs. 4.81 lacs against the loss of Rs. 4.25 lacs, during the previous year. GLFL Securities Limited The company has earned marginal profit of Rs. 0.45 lacs due to dividend income and interest on tax refund. GLFL International Limited The Company has yet not commenced business CONSOLIDATED FINANCIAL STATEMENTS The Board reviews the affairs of the Company's subsidiaries during the year at regular intervals. In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries, which form part of this Annual Report. Further a statement containing salient features of the Financial Statements of each subsidiary in Form AOC-1 forms part of the Consolidated Financial Statements.The statement also provides the details of performance and financial position of each subsidiary. In accordance with section 136 of the Companies Act, 2013, the audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of each of its subsidiaries, areavailable on our website. These Documents will also be available for inspection at registered office during normal business hours (10.00 A.M. to 6.30 P.M.) on working days, except Saturday, up to and including the date of Annual General Meeting of the Company. 5. DIRECTORS' RESPONSIBILITY STATEMENT In terms of section 134 (3) (c) of the Companies Act, 2013 in relation to the financial statements for the year 2015-16, the Board of Directors states that: a) in 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 for the financial year ended on 31st March, 2016 and of the 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; and 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. 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. 6. INTERNAL FINANCIAL CONTROLS The Company has its internal financial control systems commensurate with operations of the company, However as the operations of the Company has been discontinued since long no internal financial control frame work in place. The managements regularly monitors and controls to address safeguarding of its assets, prevention and detection of frauds and errors, controls to monitor accuracy and completeness of the accounting records including timely preparation of reliable financial information. 7. AUDITORS STATUTORY AUDITORS M/s. C.C. Chokshi & Co., Chartered Accountants, the Statutory Auditors of the Company retires at the ensuing Annual General Meeting and is eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 139 (1) of the Companies Act, 2013 read with rules. The Board of Directors recommends their re-appointment for one year. AUDITORS' REPORT Notes on accounts are self-explanatory and do not require any further explanations on the Auditors' qualifications SECRETARIAL AUDITORS Pursuant to Section 204 read with Section 134(3) of the Companies Act, 2013, the Board of Directors has appointed M/s. Rajesh Parekh & Co., Company Secretaries, Ahmedabad as Secretarial Auditor of the Company for FY 2015-16. A Secretarial Audit Report provided by M/s. Rajesh Parekh & Co. containing the following observations is annexed with the Board's report as Annexure A. 1. The Company has been holding certificate of Registration as Non Banking Financial Company (NBFC) as Category B (i.e. Non Deposit taking Company) with Reserve Bank of India. The Company has not complied with requirements of Non Banking Financial (Non-Deposit Accepting or Holding) Companies Preferential Norms (Reserve Bank) Directors, 2007 as issued under the Reserve Bank of India Act, 1934. 2. The Company has not passed resolution at the meeting of Board of Directors or Special Resolution at the general meeting of the Company pursuant to Section 179(3)(d) and Section 180(1)(c) of Companies Act, 2013 during the financial year 2014-15 and financial year 2015-16 in respect of borrowing of the Company. The explanations by the Board to the aforesaid observations are as hereunder: 1. The Company is complying Non Banking Financial (Non-Deposit Accepting or Holding) Companies Preferential Norms (Reserve Bank) Directors, 2007as issued under the Reserve Bank of India Act, 1934, partially. However, the company has discharged its outstanding liabilities including payment to public depositors and it has no outside liabilities since 2010-11. Further, the Company has given undertaking to Reserve Bank of India (RBI) for not inviting deposit from public and requested RBI not to cancel the certificate of Registration till the scheme of arrangement is implementedfully. At present company is holding certificate of Registration as Non Banking Financial Company (NBFC) as Category B (i.e. Non Deposit taking Company). 2. The company is in process of compliance of Section 180 of the Companies Act, 2013 and required resolutions of shareholders enabling Board of Directors forms part of Notice of 33rd Annual General Meeting scheduled to be held on Tuesday, 19th July, 2016. 8. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION Shri D.D. Patel, nominee of Gujarat Industrial Investment Corporation Limited (GIIC) has been appointed as an Additional Director of the Company effective from 8th August, 2015 in place of Shri Pankaj J. Patel due to his resignation from GIIC. Smt. Sahana Rao has resigned from the office of Director w.e.f. 19th May, 2016. The Board places on record its appreciation for the valuable services rendered by Smt. Sahana Rao during her tenure as Director of the Company. During the year under the review, Shri Ankit Patadiya, has resigned from the post of Company Secretary w.e.f.. 21st March, 2016. The company has appointed Shri Anil Jhaveri as Compliance officer till the new appointment of Company Secretary is made. At present the company has following persons as Whole-time Key managerial personnel of the Company: 1) Shri Anil K. Jhaveri as Non-Board Member, Chief Executive Officer and Compliance officer 2) Shri Janak J. Mehta as Chief Financial Officer DIRECTOR RETIRING BY ROTATION Shri Yogesh K.Vyas, director of the Company retires by rotation and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment as director as detailed in the notice convening the Annual General Meeting. For your perusal, a brief resume and other relevant details of Shri D.D.Patel, Shri Yogesh K. Vyas and Smt. Kavita Mandan are given in the Explanatory Statement to the Notice convening the 33rd Annual General Meetingand Corporate Governance Report. DECLARATION BY INDEPENDENT DIRECTORS Pursuant to Section 149 (7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director confirming that they meet the criteria of independence as prescribed under the Act and SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 (herein after called "Listing Regulation"). NUMBER OF MEETINGS OF THE BOARD The Board meets at regular interval with gap between two meetings not exceeding 120 days. Additional meetings are held as and when necessary. The Directors are also being provided with an option to participate in meeting through video conferencing or other audio visual technologies, keeping in view the applicable provisions of the Companies Act, 2013 and Listing Regulation. During the year under the review, the Board met five times. POLICY ON DIRECTORS' APPOINTMENT The Nomination and Remuneration Committee (NRC) has approved the criteria and process for identification /appointment of Directors which are as under: Criteria for appointment: (i) Proposed Director ("Person") shall meet all statutory requirements and should: • possess the highest ethics, integrity and values • not have direct/indirect conflict with present or potential business/operations of the Company • have the balance and maturity of judgment • be willing to devote sufficient time and energy • have demonstrated high level of leadership and vision, and the ability to articulate a clear direction for an organisation • have relevant experience (In exceptional circumstances, specialisation/ expertise in unrelated areas may also be considered) • have appropriate comprehension to understand or be able to acquire that understanding o relating to Corporate Functioning o involved inscale, complexity of business and specific market and environment factors affecting the functioning of the company Process for Identification / Appointment of Directors (i) Board members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him. (ii) Chairman of the Company can himself also refer any potential person meeting the above criteria. (iii) NRC will process the matter and recommand such proposal to the Board. (iv) Board will consider such proposal on merit and decide suitably. CRITERIA FOR PERFORMANCE EVALUATION The Board considered and approved the criteria for performance evaluation of itself, that of its Committees and Individual Directors as follows: Criteria for Board Evaluation i. Focus on strategic and policy issues ii. Effectiveness of Board process and information sharing iii. Nature of discussions iv. Quality of decisions Criteria for Committee Evaluation i. Adequacy of terms of reference of the committee ii. Fulfilment of key responsibilities iii. Frequency and effectiveness of meetings iv. Quality / relevance and timeliness of information made available v. Committee dynamics, especially openness of discussions Criteria for Evaluation of Independent Directors i. Participation in Board in terms of adequacy (time & content) ii. Contribution through expertise and perspective iii. Guidance / support to management outside Board / Committee meetings Criteria for Evaluation of NEDs and MDs/WTDs. i. Participation in terms of adequacy ii. Transparency MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS The Evaluation of Board, its Committees and Individual Directors was carried out as per process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee. The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinated by the Chairman of Independent Directors' meeting for Board and Non-Independent Directors while the process of evaluation of the Independent Directors was co-ordinated by the Chairman of the Company. Based on this, Chairman of the Company briefed the Board and each of the Individual Directors, as applicable. With respect to the Committees, the Chairperson of each of the Board Committees evaluated the performance of their respective Committee and reported the same to the Board for discussion; from which the final result emerged. FAMILIARISATION PROGRAMME The Company undertook various steps to make the Independent Directors have full understanding about the Company. 9. AUDIT COMMITTEE During the year under the review the Board has re-constituted the Audit Committee in accordance with the applicable provisions of the Companies Act, 2013 and Listing Regulation. The composition and terms of reference of the Audit Committee is as under: There has been no instance where the Board has not accepted the recommendations of the Audit Committee. The Company has established the vigil mechanism through Whistle Blower Policy for all the stakeholders of the Company which also provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases as per the Policy. The Whistle Blower Policy will be applicable to all the stakeholder of the Company, which is an extension of the Code of Business Conduct through which the Company seeks to provide a mechanism for the Stakeholders to disclose their concerns and grievances on Unethical Behavior and Improper/Illegal Practices and Wrongful Conduct taking place in the Company for appropriate action. The Company shall oversee the vigil mechanism only through the Audit Committee. If any of the members of the Audit Committee have a conflict of interest in a given case, they should recuse themselves and the others in the Committee would deal with the matter on hand. The Policy provides necessary safeguards to all Whistle Blowers for making Protected Disclosures in Good Faith and any Stakeholder assisting the investigation. It also provides the detailed scope and role of Whistle Blower and the manner in which concern can be raised. Further, the Policy contains provisions relating to investigation of the protected disclosures, protection to the whistle blower, decision by CFO, CEO or Audit Committee and reporting & monitoring by the Company. The policy has been placed on the website of the company at the below link: http://www.gujaratleasefinancing.co.in/>policies RISK MANAGEMENT POLICY The Board of Directors has developed and implemented Risk Management Policy for the Company. The Policy lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Chief Risk Officer, Risk Champions and Co-ordinators. 10. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTS A separate report on Corporate Governance and Management Discussion and Analysis Reports are furnished forms part of Annual Report and the certificate from the Company's Auditors regarding compliance of conditions of Corporate Governance is annexed to the Boards'Report. 11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO. The Company has no activities relating to conservation of energy or technology absorption. There has been no foreign exchange earning or outgo during the year under review. 12. PARTICULARS OF EMPLOYEES The information required underpursuant to Section 197 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided below: 1. The ratio of the remuneration of each director to the median employee's remuneration: No directors is being paid any remuneration except the sitting fees to Independent Directors only, hence no ratio is worked out. 2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: Nil 3. The percentage increase in the median remuneration of employees in the financial year: 10% 4. The number of permanent employees on the rolls of company: 2 employees as on 31st March, 2016. 5. The explanation on the relationship between average increase in remuneration and company performance: The Company has discontinued its business operation since the FY 1999-2000 hence performance evaluation of the Company could not be done. The Company does not have any operational income. The Company pays remuneration to its employees who have been appointed as Key Managerial Personnel during the year in accordance with applicable provisions of the Companies Act, 2013. 6. Comparison of the remuneration of the Key Managerial Personnel against the performance of the company: Refer point no. 5 8. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year: Not applicable 9. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company:Refer point no. 5 10. The key parameters for any variable component of remuneration availed by the directors: Not applicable 11. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:Not applicable 12. Affirmation that the remuneration is as per the remuneration policy of the company: Refer point no. 5 The Company does not have employee under the category as specified in Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 13. EXTRACT OF THE ANNUAL RETURN The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure-B to this Report. 14. ACKNOWLEDGEMENTS Your Directors are grateful to RBI, GIIC Limited, the Government of Gujarat and Torrent Group for their continued guidance and support to the Company. The Directors are pleased to place on record their appreciation for the excellent support extended by the banks The Board would also like to express great appreciation for the understanding and support extended by the employees and Shareholders of the company in the difficult period. For and on behalf of the Board Harnish Patel Director-in-Charge (DIN: 00114198) Place: Ahmedabad Date : 19th May, 2016 |