DIRECTORS REPORT To, The Members, Oscar Investments Limited Your Directors have immense pleasure in presenting this 37th Annual Report alongwith Audited Financial Statements for the financial year ended March 31, 2015. BUSINESS PERFORMANCE Consolidated During the financial year 2014-15, the Company achieved a Profit before Tax of Rs. 4642.40 lacs. The Profit after Tax was Rs. 2810.03 lacs as compared to Rs. 2865.75 lacs in the previous year. Standalone During the financial year 2014-15, the Company achieved a Profit before Tax of Rs. 4775.16 lacs. The Profit after Tax was Rs. 2912.82 lacs as compared to Rs. 3239.53 lacs in the previous year. An amount of Rs. 582.56 lacs was transferred to Statutory Reserve Fund pursuant to Section 45(I) C of the Reserve Bank of India Act, 1934. The Company's Net Worth as on March 31, 2015 stood at Rs. 168755.78 lacs as against Rs. 165866.38 lacs last year. MANAGEMENT DISSCUSSION AND ANALYSIS REPORT a. Global Economy and Industry Overview Economic growth has been gradually picking up since the beginning of FY 2014-15. The Indian economy has shown signs of recovery, having recorded more than 7% growth in FY 2014-15. GDP growth has increased to 7.3% from 6.9% in the previous year. Consumer inflation dropped to 6% from 9.5%. The fiscal deficit target too, has been reduced to 3.9% of the GDP for fiscal year 2016, from 4.1% in fiscal year 2015. The overall positive sentiment was also reflected in the improved performance of the equity market that witnessed one of the highest returns in the recent past, as also in most other segments of the financial services industry. b. Outlook Going forward, the economy is expected to record even higher growth rates of 7.8% and 8.1% in FY 201516 and FY 2016-17 respectively, as per forecasts by Fitch (Source: Fitch Ratings Global Economic Outlook, July 2015). Even the OECD is of the view that the Indian economy remains strong and stable and will record more than 7% growth in FY 2015-16 (Source: OECD Global Economic Outlook, June 2015.) The growth rate may edge over to 8% if structural reforms such as land acquisition and greater flexibility in labour laws are approved and implemented. As per IMF's update on the World Economic Outlook, forecasts for the world economy are for 3.3 percent this year, marginally lower than in 2014, and 3.8 percent next year. As for other developments, the WEO Update says that oil prices rebounded during the second quarter of 2015, the risk of deflation decreased, and financial conditions for corporate and household borrowers in most advanced economies remained broadly favorable and the increase in global growth in 2015 will be driven by stronger growth in advanced economies. Growth in these economies is forecast to increase from 1.8 percent in 2014 to 2.1 percent in 2015 (falling about 0.3 percentage points short of the forecast in April), and 2.4 percent in 2016. The financial services industry is highly correlated to overall economic growth, and as seen from the sectoral split of India's GDP growth, it has in fact been a large driver of this growth. The improving GDP growth trajectory is therefore expected to further propel the financial services industry. c. Risks And Concerns The key sources of income of Company is interest from inter-corporate loans provided to group companies. The Company is dependent upon the interest income. The Company is subject generally to changes in Indian law, as well as to changes in government regulations, changes made in the regulations by applicable regulators in India and policies and accounting principles. Any changes in the regulatory framework affecting non-banking financial companies, could adversely affect the profitability of the Company or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise. d. Internal Financial Control Systems and their adequacy The Company has proper and adequate internal financial control systems commensurate with its size and nature of its operations. These have been designed to ensure that the financial and other records are reliable for preparing financial and other statements, maintain accountability of assets, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. e. Financial Overview of the Company The total revenue of the Company on standalone basis for the Financial Year 2014-15 was Rs. 11217.57 Lacs as against Rs. 11308.58 Lacs in Financial Year 2013-14. The Profit after Tax was Rs. 2912.82 lacs as compared to Rs. 3239.53 lacs in the previous year. f. Human Resources - Contribution to Business Success HR policies and processes were strengthened with focus on building a culture where high performance is suitably rewarded. Adherence to various HR policies, alignment to organizational culture and values and efficacy of organisation structure are monitored and supported by the group HR leadership for superior business performance and higher employee engagement and satisfaction levels. Our continuous attempt has been to provide employees with challenging roles, opportunities for learning and growth, an enabling work environment, relevant training and performance support through various existing and new HR initiatives. DIVIDEND To conserve the resources of the Company for future investments your Directors have deemed it prudent not to recommend any Dividend for the financial year ended March 31, 2015. SHARE CAPITAL During the period under review, there has been no change in the Share Capital of the Company. EXTRACT OF ANNUAL RETURN An extract of the Annual Return in Form No. MGT 9 is presented in a separate section and is annexed herewith as Annexure - A to this Report. DETAILS OF SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES As on March 31, 2015, your Company has one subsidiary; Shimal Research Laboratories Limited and one step-down subsidiary; Fortis Clinical Research Limited. The Company has one Associate Company; RHC Finance Private Limited within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). During the Financial year under review, there has been no material change in the nature of business of the subsidiaries. A report on the performance and financial position of each of the subsidiaries included in the Consolidated Financial Statement is provided, in accordance with the provisions of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, as a separate statement in Form AOC- 1, annexed to the Consolidated Financial Statements of the Company, containing the salient features of the financial statement of Company's subsidiaries and hence is not repeated here for sake of brevity. During the year under review, the Board of Directors has formulated a Policy on Subsidiaries which has also been uploaded on the Company's website and can be accessed through the link <http://oscarinvestments.org/pdf/Policy-on-Subsidiaries.pdf> Pursuant to the provisions of Section 136 of the Act, the Financial Statements including Consolidated Financial Statements of the Company along with other documents required to be attached thereto and separate audited accounts in respect of each of its subsidiaries are available on the website of the Company. CONSOLIDATED FINANCIAL STATEMENTS Pursuant to Clause 32 of the Listing Agreement and Section 129 of the Companies Act, 2013, Consolidated Financial Statements of your Company and all its subsidiaries, duly audited by the Statutory Auditors of the Company, is published in this Annual Report. The Consolidated Financial Statements have been prepared in accordance with Accounting Standard aS 21 and AS 23 issued by The Institute of Chartered Accountants of India. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS The Company being an NBFC, is exempted from the provisions of Section 186 [except sub-section (1)] of the Act. Accordingly, details of particulars of loans, guarantees or investments as required to be provided as per Section 134(3)(g) of the Act are not provided. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions that were entered into during the financial year were in ordinary course of business and on arm's length basis. There were no materially significant transactions with related parties in the financial year which were in conflict with the interest of the Company. All Related Party Transactions are placed before the Audit Committee for approval as per the Related Party Transaction Policy of the Company as approved by the Board. The policy has also been uploaded on the Company's website and can be accessed through the link <http://www.oscarinvestments.org/pdf/Oscar-RPT->Policy.pdf Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Act are provided in Form AOC- 2 which is annexed herewith as Annexure- B and forms part of this report. RISK MANAGEMENT As an NBFC, the Company is exposed to credit risk, liquidity risk and interest rate risk. The Company has a Risk Management Policy, which is being monitored by the Risk Management Committee. Company's Asset-Liability committee (ALCO) set up in line with the guidelines issued by the RBI, monitors asset-liability mismatches, and ensures that there are no material imbalances or excessive concentration on either side of the balance sheet. The company manages the risk by maintaining a conservative financial profile and by following prudent business and risk management practices. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Anuj Chowdhry, Non-Executive Independent Director has resigned from the Board of Directors of the Company with effect from May 11, 2015. The Board of Directors placed on records its deep appreciation for the valuable services and guidance provided by him during the tenure as Director of the Company. Mr. Ravi Sikka (in capacity of Non-executive Independent Director) was appointed as Additional Director of the Company by the Board of Directors on May 29, 2015 pursuant to the provisions of Section 161 of the Act and Articles of Association of the Company. In terms of Section 161 of the Act, Mr. Ravi Sikka will hold office upto the date of the ensuing Annual General Meeting of the Company. The Company has received notice in writing from a Member along with the deposit of requisite amount proposing Mr. Ravi Sikka for appointment as Director of the Company. Pursuant to Section 149(10) of the Act, the Board of Directors recommends, the appointment of Mr. Ravi Sikka for a term of 3 (three) consecutive years, at the ensuing Annual General of the Company. The Company has received declarations from Mr. Ravi Sikka confirming that he meets the criteria of independence as provided in Section 149(6) of the Act and Clause 49 of the Listing Agreement. In terms of the provisions of Section 152 of the Act and Article of Association of the Company, Mr. Shivinder Mohan Singh, Non -Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible has offered himself for re-appointment. The Nomination and Remuneration Committee and the Board of Directors recommend his re-appointment. The brief resume of the Directors proposed to be appointed/ re-appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships, memberships/chairmanships of board committees and shareholding (both own or held by/ for other persons on a beneficial basis) in the Company, as stipulated under Clause 49(VIII)(C) of the Listing Agreement, are provided in the Notice convening the Annual General Meeting of the Company. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company. The Company has received declarations from all the Independent Directors of the Company in terms of Section 149(7) of the Act that they meet with the criteria of independence as provided in Section 149(6) of the Act. Ms. Indu Kardam, Company Secretary and Compliance Officer resigned from her office with effect from September 23, 2014. Consequently Mr. Pankaj Singh was appointed as the Company Secretary and Compliance Officer by the Board of Directors with effect from September 23, 2014. Mr. Pankaj Singh, Company Secretary and Compliance Officer of the Company resigned from the post with effect from October 31, 2014 and Mr. Hariom Rastogi was appointed in his place by the Board of Directors with effect from November 1, 2014. Mr. Hariom Rastogi, Company Secretary and Compliance Officer of the Company resigned from the post with effect from March 31, 2015 and Ms. Karishma Jain was appointed in his place by the Board of Directors with effect from April 1, 2015. BOARD MEETINGS The Board of Directors of the Company met eight times during the financial year 2014-15. The details of various Board Meetings are provided in the Report on Corporate Governance, which forms part of this report. The intervening gap between two meetings of the Board was within the period as prescribed under the Companies Act, 2013 and Listing Agreement. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the effectiveness of board processes, information and functioning etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, constructive contribution to discussion and strategy etc. The Board and the Nomination & Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, constructive contribution to discussion and strategy, etc. The summary of the evaluation reports were presented to the respective committees and Board for their consideration. The Board of Directors expressed their satisfaction with the Annual Performance Evaluation process and evaluation results. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was also evaluated. REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for appointment of Directors, Key Managerial Personnel and their remuneration as well as policy on other employees remuneration. The detailed policy is available on the website of the Company can be accessed through the link <http://oscarinvestments.org/pdf/DIRECTORS-APPOINTMENT-&-REMUNERATION-POLICY.pdf> FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company has laid down a policy on training for Independent Directors. The Directors are updated on the regulatory changes, Business strategy and operations by the senior leadership of the Company periodically. Apart from this, during the year under review one familiarization program was conducted by respective functional heads of the Company to familiarize the Directors with the business model of Research& Information Services. Details of Familiarization Program conductedare uploaded on the website of the Company and can be accessed through the link <http://oscarinvestments.org/pdf/Familiarisation-programme-for-Independent-Directors.pdf> AUDIT COMMITTEE The composition of the Audit Committee is in compliance with provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. During the year, all the recommendations of the Audit Committee are included in the Report on Corporate Governance, which forms part of this report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, based on the representation as provided to the Board by the management, confirm that: a. In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, wherever applicable; b. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015; 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 for the financial year ended March 31, 2015 on a 'going concern' basis; e. The Directors had laid down internal financial controls to be followed by the Company and such internal controls are adequate and were operating effectively; and f. The Directors had devised proper systems to ensure proper compliance with provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company believes, it is in responding to the needs of the people, benefitting communities and protecting the environment that will ultimately determine the sustainability of continued progress. In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established a Corporate Social Responsibility (CSR) Committee during the financial year 2014-2015. The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The Company is in the process of identifying appropriate NGO partners for execution of identified projects. Hence, the Company did not spend any money on CSR in FY 2014-15, but it shall do so in FY 2015-16. Annual Report on CSR in format prescribed in companies (Corporate Social Responsibility Policy) Rules, 2014 in attached as Annexure C. CORPORATE GOVERNANCE Your Company continues to be committed to uphold the standards of Corporate Governance and adhere to the requirements set out by Clause 49 of the Listing Agreement with the BSE Limited. A separate Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed as a part of this Report along with the Auditors' Certificate thereon. AUDITORS Pursuant to the provisions of Section 139 of the Companies Act, 2013 ("Act") read with Companies (Audit and Auditor) Rules, 2014, M/s S. R. Bagai & Co., (Firm Registration No. 002388N ), Chartered Accountants were appointed as Statutory Auditors of the Company, from the conclusion of the 36th Annual General Meeting (AGM) of the Company held on September 30, 2014 till the conclusion of 38th AGM to be held in the year 2016, subject to ratification of their appointment at every AGM. The Company has received a written confirmation from them to the effect that their ratification, if made, would be within the limits specified under the Act and that they are not disqualified from being re-appointment as Auditors of the Company. Accordingly, based on the recommendation of the Audit Committee, the Board of Directors recommends the ratification of appointment of M/s S. R. Bagai & Co. as Statutory Auditors of the Company from the conclusion of the forth coming AGM till the conclusion of the next AGM. AUDITORS REPORT The Auditors Report does not contain any qualification, reservation or adverse remark. Further the observations of the Auditors in their report read together with the Notes to Financial Statement are self-explanatory and therefore, in the opinion of the Board of Directors, do not call for any further explanation. SECRETARIAL AUDITOR REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 ("Act") and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2015, the Board of Directors of the Company had appointed M/s Abhishek Mittal & Associates, as the Secretarial Auditor of the Company to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report of the Company for the financial year ended March 31, 2015, is annexed herewith as Annexure D to this Report. The Comments of Auditors' in the Secretarial Audit Report and the reply to the same is as follows: -The appointment of Auditor was done in Annual General Meeting (AGM) held on 30.09.2014 for 2 years subject to ratification by the members at the next AGM. The attachments of Form GNL-2 filed with Registrar of Companies, reflects the period of appointment for 1 year only as the appointment was subject to ratification by the members at the next AGM. Reply: Since the appointment of Auditors was done at the AGM held on 30.09.2014 ,subject to ratification by the members at the next AGM, the Form GNL-2 was filed showing period of appointment as 1 year (2014-15) only .The Company is also filing ADT-1 for 2015-16 in the current year with respect to appointment of Auditors for the financial year 2015-16. -The Company does not have Chief Financial Officer (CFO) as whole time key managerial personnel. Reply: The Company is looking for a suitable candidate for the position of Chief Financial Officer (CFO) and the appointment shall be made immediately upon selection of a suitable candidate as CFO. -The Board Resolution regarding the fact that the Company has not accepted public deposit & will not accept public deposit during the financial year was passed in the meeting held on 30.05.2015. Reply: The Company's first Board Meeting for the financial year 2014-15 was held on 30th May, 2015 and accordingly the resolution that the Company has not accepted public deposit & will not accept public deposit during the financial year was passed in that meeting. -Few of the returns of the RBI have been filed after the due date. Reply: The Returns to RBI are generally filed on time. There was a delay in filing of few returns with RBI, however the Company will make all the filings on time. -The Company has obtained membership of Credit Information Companies (CIC) from only one CIC namely Credit Information Bureau (India) Limited on 27th May, 2015. Reply: The Company, being an NBFC, is in the process of applying for membership of other CIC Companies also. PUBLIC DEPOSITS Your Company has neither invited nor accepted any deposits from the public within the meaning of the Section 2(31) of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the period under review. LISTING WITH STOCK EXCHANGE The Equity Shares of your Company continue to be listed on BSE Limited ("BSE"). The Annual Listing Fee for the financial year 2015-16 has been paid to the BSE. STATUTORY DISCLOSURES None of the Directors of your Company is disqualified as per provision of section 164(2) of the Act. The Directors of the Company have made necessary disclosures, as required under various provisions of the Act and the Listing Agreement. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In view of the nature of activities which are being carried on by your Company, the particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies' (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Research and Development and Technology Absorption are not applicable to the Company. There were no Foreign Exchange Earnings and Outgo during the year. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Disclosures pertaining to remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure E and forms part of this report. Further, there is no employee of the Company, who was employed throughout the financial year and in receipt of remuneration of Rs.60 lakhs or more, or employed for the part of the financial year and in receipt of Rs.5 lakhs or more a month. Accordingly, details as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been provided. The details of remuneration paid to the Directors including Executive Directors of the Company are given in Form No. MGT-9 forming part of this Report. VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Company has a vigil mechanism named Whistle Blower Policy for Directors and employees of the Company to report their genuine concerns and to deal with instance of unethical practices, fraud and mismanagement or gross misconduct by the employees of the Company, if any that can lead to financial loss or reputation risk to the organization. The policy has also been uploaded on the website of the Company and can be accessed through the link http:/ /oscarinvestments.org/pdf/Whistle-Blower-Policy.pdf DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. No case has been reported during the year under review. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY Except as disclosed above or elsewhere in this Annual Report, there have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year under review and the date of this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its operations in future. ACKNOWLEDGEMENTS Your Directors would like to express their sincere appreciation for the co-operation and assistance received from the Company's Bankers, Regulatory Bodies, Stakeholders including Financial Institutions and other business associates who have extended their valuable sustained support and encouragement during the year under review. Your Directors also gratefully acknowledge and appreciate the commitment displayed by all executives, officers and staff towards the success of the Company. We look forward for your continued support in the future. On behalf of the Board of Directors Sd/- (Japna Malvinder Singh) Managing Director DIN : 00238896 Sd/- (Shivinder Mohan Singh) Director DIN : 00042910 Place: New Delhi Date : August 03, 2015 |