BOARD'S REPORT Dear Members, 1. Your Directors are Pleased to present the 29th Annual-Report and the Company's Audited financial statement for the Financial Year ended March 31st 2015. 2. PERFORMANCE During the year, due to subdued economy and lower repayment strength of the borrowers, and slow off take of the second hand commercial vehicle segment, the recovery process of the company resulted into considerable NPA. The management therefore taking precautions for further disbursement of new loans and therefore the performance of the company became relatively poor both in terms of volume of business and profits. Once the economy improves and the credit cycle of the segment shows improved results, then the company shall again endeavor to undertake the size of operations into full scale. 3. DIVIDEND The Board of Directors of the Company recommends payment of dividend @ Rs. 1/- for equity shares of Rs. 10/- each (10%) for the year 2014-15 previous year @ Rs.l/-for equity shares of Rs. 10/-each (10%). 4. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUNDS (IEPF) Pursuant to the provisions of section 205A(5) and section 205C of the companies Act, 1956, (which are still applicable as the relevant section's under the Companies Act, 2013 are yet to be notified) the amounts pertaining to the dividends that remained unclaimed and unpaid for a period of seven years from the date it became first due for payment, have been transferred from time to time to IEPF on the due dates by the company and no claims in this respect shall lie against the company. The dividend remains unpaid-unclaimed in the Company has been given in the Corporate Governance Report attached with the annual report of the Company. 5. TRANSFER OF AMOUNT TO THE RESERVES The Company has transferred Rs, 19,38,717/- to the NBFC Reserves as per requirement of the Directions of the RB! to the NBFC Companies (Previous year Rs.1,01,99,870/-) except that no amount has been transferred or withdrawn from the reserves by the Company. 6. CREDIT RATING The company's borrowings enjoy BBB-/stable credit ratings from CRISIL. The rating has been revised from BBB (Stable) in the previous year. 7. NQN PERFORMING ASSETS AND PROVISIONS The company is ascertained Non Performing Assets under Non Banking Financial (Non deposit accepting or holding) Company's Prudential norms (Reserve Bank) Directions, 2007, as amended from time to time, and made adequate provisions against. The company did not recognize interest income on such Non Performing Assets. The Company has also written off unrecoverable amount as bad debts. 8. ASSOCIATES/SUBSIDIARIES/JOINT VENTURE COMPANIES The company does not have any subsidiary and joint venture company. The company also does not have any associate within the meaning of Section 2(6) of the Companies Act, 2013 either at the beginning or end of the financial year. However, the Company is an associate of foreign Company namely Agarwai Coal Corporation(s) Pte. Ltd. (Singapore) which hold 36.93% shares in the Company. 9. DISCLOSURE U/S 134 (3) Pursuant to the provisions of sec 134 (3) read with companies (Accounts) rules. 2014, The required information's & disclosures, to the extent applicable to the company are discussed elsewhere in this report and their relevant information's are as under:- 9.1. The extracts of Annual Return in the Form MGT-9 as per Annexure-A. 9.2 Policy of company for the appointment of Directors and their remuneration as per Annexure-B. 9.3 The particulars of related party contracts are enclosed herewith in form AOC-2 as per Annexure - C . 9.4 The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report and is annexed as per Annexure-D. There is no employee drawing remuneration of Rs. 500000/- per month or Rs. 6000000/- per year, therefore the particulars of employees as required U/s 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable to the Company. 10. RISK MANAGEMENT COMMITTEE The company has constituted risk management committee and the policy is disclosed on the website of the company. (www.admanumfinance.com). 11. DISCLOSURE OF CODES. STATNDARDS. POLICIES AND COMPLIANCES THEREUNDER a) Know Your Customer and Anti money laundering measure policy. Your company has a board approved Know Your Customer and Anti Money Laundering measure policy (KYC and AML Policy) in place and adheres to the said policy. The said policy is in line with the RBI Guidelines. Company has also adheres to the compliance requirement in terms of the said policy including the monitoring and reporting of cash and suspicious transactions. There are however, no cash transactions of the value or more than Rs.1000000/- or any suspicious transactions whether or not made in cash noticed by the company in terms of the said policy. b) Fair Practice Code Your company has in place a Fair Practice Code (FPC), as per RBI Regulations which includes guidelines from appropriate staff conduct when dealing with the customers and on the organizations policies vis-a-vis client protection. Your company and its employees duly complied with the provisions of FPC. c) Code of Conduct for Board of Directors and the Senior Management Personnel Your company has adopted a code of conduct as required under clause 49 of the Listing Agreement for its BOD and the senior management personnel. The code requires the directors and employees of the company to act honestly, ethically and with integrity and in a professional and respectful manner. A certificate of the Management is attached with the Report in the Corporate Governance section. d) Code for Prohibition of Insider Trading Practices Your company has in place a code for prevention of insider trading practices in accordance with the model code of conduct, as prescribed under SEBI { prohibition of insider trading) regulations, 1992, as amended and has duly complied with the provisions of the said code. The BOD at its meeting held on 31/01/2015 adopted (i) AMFL code of practices and procedures for fair disclosure of unpublished price sensitive information and (ii) AMFL code of conduct for prohibition of insider trading, as per SEBI (Prohibition of Insider Trading) Regulations, 2015, which shall become effective from 15/05/2015. e) Whistle blower policy Pursuant to the provisions of section 177(9) and (10) of the Companies Act 2013 read with rule 7 of Companies {Meeting of Boards and its powers) Rules, 2014 and clause 49 of the listing agreement, the company and adopted a whistle blower policy which provides for a vigil mechanism that encourages and supports its directors and employees to report instances of unethical behavior, actual or suspected, fraud or violation of the company' code of conduct policy. It also provides for adequate safeguards against victimization of persons who use this mechanism and direct access to the chairman of audit committee in exceptional cases. Policy of the whistle blower of the Company has been given at the website of the Company at www.admanumfinance.com and attached the same as Annexure H to this report. f) Prevention, Prohibition and Redressal of Sexual Harassment of women at workplace The company has in place a policy on prevention, prohibition and redressal of sexual harassment of women at workplace. The primary objective of the said policy is to protect the women employees from sexual harassment at the place of work and also provides for punishment in case of false and malicious representations. No compliant, however is received by the company underthe said policy in FY 2014-15. g) Nomination, Remuneration and Evaluation policy (NRE Policy) The Board has, on the recommendation of the nomination and remuneration committee framed a nomination, remuneration and evaluation policy which lays down the criteria for identifying the persons who are qualified to be appointed as directors and, or senior management personnel of the company, along with the criteria for determination of remuneration of directors, KMP's and other employees and their evaluation and includes other matters, as prescribed under the provisions of section 178 of Companies Act, 2013 and clause 49 of the Listing Agreement. Policy of the Company has been given at the website of the Company at www.admanumfinance.com and attached the same as Annexure B to this report. The details of the same are also covered in Corporate Governance Report forming part of this annual report. h) Related Party Transactions Policy There were no materially significant related party transactions held during the FY 2014-15 that may have potential conflict with the interest of company at large. Transactions entered with related parties as defined under the Companies Act, 2013 and Clause 49 of the listing Agreement during the financial year were mainly in the ordinary course of business and on an arm's length basis. The related party transaction policy as formulated by the company defines the materiality of related party and lays down the procedures of dealing with related party transactions. The details of the same are posted on our web-site (www.admanumfinance.com) i) Corporate Social Responsibility Policy Company has framed Corporate Social Responsibility (CSR Policy), as per the provisions of Companies (CSR Policy) Rules, 2015 which, inter alia, lays down the guidelines and mechanism, directly or indirectly through eligible trust or institutions for undertaking socially useful projects for welfare of the society. As per the provisions of section 135 of Companies Act, 2013, the company has constituted a Corporate Social Responsibility Committee. The composition of the CSR Committee and its terms of reference are given in the Corporate Governance Report forming part of this annual report. The Company has under an obligation to spend an amount of Rs. 1842174 being the 2% of Average net profit of preceding three financial years and the company has discharged the said obligation as per the CSR policy of the company. The details of CSR activities are annexed as per Annexure-E to this report. And the CSR Policy of the Company are posted on our web-site (www.admanumfinance.com). 12. LISTING OF SHARES OF THE COMPANY The equity shares of the company continue to remain listed on BSE limited (code:511359). The company has paid the due listing fees to BSE Limited for the financial year 2015-16 on time. 13. BRANCH NETWORK Your company has established an integrated branch network to spread the financial operations at different states and locations. At present the company has 24 branches as at 31/03/2015. 14. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Directors of your company consists of 6 directors. During the year Shri Vinod Kumar Agarwai, (DIN 00136613) the Managing Director of the company, due to his pre-occupation has vacated the office as such and has become the Non-Executive Director & Chairman of the company w.e.f. 16/08/2014. Mr. J.N Choudhury (DIN 00136766) continued to hold the office as Director-in-Charge&CEO. Mrs. Dolly Choudhury (DIN 069359S2) appointed as wholetime director w.e.f. 31/07/2014. CA Aseem Trivedi, CA Vishnu Gupta and Mr. D.P Kori are the Independent Directors of the Company for a term of 5 years w.e.f. l" April, 2014. All Independent directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the companies Act, 2013 and clause 49 of the Listing Agreement and forms part of this report. In the opinion of the Board they fulfill the criteria on Independency. In accordance with the provisions of Section 152 of the companies Act 2013 read with relevant provisions of Articles of Association of the company there are none of any directors is liable to retire by rotation. The brief resume of directors proposed to be appointed/ reappointed, nature of their expertise in specific functional areas and names of the companies in which they hold directorship along with their membership/chairmanship of committees of the board as stipulated under Clause 49 of Listing Agreement of stock exchanges, or provided in the Corporate Governance section along withthe Annual Report. Based on the confirmations received, none of the directors are disqualified from being appointed, reappointed as directors in terms of section 164 of the Companies Act, 2013. CS Mohd. Raees Sheikh, a whole time Company Secretary, and Mr. Vikas Gupta, Chief Financial Officer of the company are designated as key managerial personnel of the company w.e.f. l" April, 2014 as per the provisions of section 203 of the Companies Act, 2013. 15. PERFORMANCE EVALUATION Pursuant to the provision of Companies Act, 2013 and clause 49 of the Listing agreement, the performance of the Board, its committee's and individual directors are evaluated by number of meetings held, time spent in each meeting deliberating the issues, quality of information/data provided to the members, the time given to them to study the details before each meeting, quality of deliberation in each meeting, contribution of each directors, the details of decisions taken and measures adopted in implementing the decision and feedback to the board. 16. BOARD MEETINGS During the FY 2014-15 the Board of directors has passed resolutions by circulation on 07-04-2014 and six Board meetings were convened and held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. The details of the Board meetings held during the year along with the attendance of the respective directors there at are set out in the Corporate Governance Report forming part of this annual report. 17. SIGNIFICANT/ MATERIAL ORDERS PASSED BYTHE REGULATOR ORCOURTORTRIBUNALS There were no significant/material orders passed by any regulator or court or tribunal which would impact the going concern status of the company and its future operations. 18. INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL SYSTEM The company has appointed an independent firm of Chartered Accountants for conducting the audit as per the internal audit standards and regulations. The internal auditor reports to the audit committee of the board. The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism with interaction of KMP and functional staff. The company has taken stringent measures to control the quality of disbursement of loan and its recovery to prevent fraud. The company has also taken steps to check the performance of the functional employees of the company at branch level. 19. SECRETARIAL AUDIT REPORT Pursuant to the provisions of section 204 of the Companies Act, 2013 and the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the BOD of the company had appointed M/s D.K. Jain & Co., Practicing Company Secretaries, Indore to undertake the secretarial audit of the company for the FY 2014-15. The secretarial audit report for the FY ended March 31", 2015 is annexed as Annexure - F to this report. The said report does not contain any material qualification, reservation or adverse remark, except the delay caused in the filing of some documents, which were already filed with the adequate additional filing fee and has been approved by the RoC/MCA, therefore do not calls for any further comment. 20. AUDITOR AND AUDITORS REPORT At the 28'" Annual General Meeting held on 25" September, 2014, the members had appointed M/s Mahendra Badjatya & Co (ICAI Firm Registration Number 001457C) Chartered Accountants as statutory auditors of the company, by way of ordinary resolution u/s 139 of the Companies Act, 2013 to hold office for a term of 3 years from the conclusion of 28lh AGM until the conclusion of the 31st AGM of the company subject to ratification of appointment by the members of the company at every AGM as per the provisions of the Companies Act, 2013. Based on the recommendation of the audit committee, the BOD at their meeting held on 29/05/2015 recommended the ratification of appointment of M/s Mahendra Badjatya & Co, Chartered Accountants as statutory auditors of the company, and that, the necessary resolution in this respect is being included in the notice of the 29th AGM for the approval of the members of the company. The company has received consent from statutory auditors and confirmation to the effect that they are not disqualified to be appointed as statutory auditors of the company in terms of the provisions of the Companies Act, 2013 3nd rules framed thereunder. The Notes to the Accounts referred to in Auditors Report are self explanatory and does not call for any further comment. 21. DIRECTORS RESPONSIBILITY STATEMENT The Directors' Responsibility Statement referred to in clause (c) of sub-section (3)of Section 134 of the Companies Act, 2013: a) In the preparation of the annual accounts for the year ended March 31" 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there is no material departures from the same; 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 March 31" 2015 and of the profit and loss of the company for the year ended on that date; c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding 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 are adequate and operating effectively. 22. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS Pursuant to Clause 49 of the Listing Agreement with the stock exchange, the corporate governance report, management discussion and analysis and the auditor's certificate regarding compliance of conditions of corporate governance is enclosed herewith as per Annexure - G. 23. DETAILS OF FRAUD Pursuant to the provisions of section 134(3) and 143(12) of the Companies Act, 2013, read with Rule 13 of Companies (Audit and Auditors) Rules, 2014 the disclosure in respect of fraud detected by the company is as under:- The company has detected fraud by its employees in collusion with borrowers at certain locations involving an amount of Rs. 60.21 Lakh in the financial year 2013-14 which amount is increased to Rs. 227.03 Lakh in the financial year 2014-15. The investigations of police & at the end of the Company are in Progress & after the recovered amount the Company has written off an amount of Rs. 215.79 Lakh as unrecoverable in the books of Accounts in the current financial year. The matter is reported to the Reserve Banks of India & also to Ministry of Corporate Affairs, Government of India, New Delhi. The Fraud has been reported to the Central Government in the prescribed form ADT-4. Further that there is no other fraud as reported by the Auditors to the Central Government which needs to be disclosed as per requirement of the provisionsof section 134(3)(ca) of the Companies Act, 2013. 24. ANN UAL EVALUATION Pursuant to the provisions of the companies Act, 2013 and Clause 49 of the listing agreement, an Annual Performance evaluation of the Board, the directors individually as well as the evaluation of the working of the board committees including audit committee and other committees of the board of directors of the company was carried out during the year and is covered under the corporate governance report forming part of this annual report. 25. DEPOSITS The Company is a non-deposit taking category - B NBFC Company. The company does not have any pubic deposits within the meaning of Section 73 of the Companies Act, 2013. Further that there is no outstanding falls under the category of deposits at the end of the financial year. 26. ADEQUACY OF INTERNAL FINANCIAL CONTROLS The company has an adequate internal financial control backed by sufficient qualified staff, system software and special software's. The company has also an internal audit system by the external agency. Barring collusion and conspiracy of the staff and customers in respect of fraud detected by the company, the Board is of the opinion that there is an adequate internal financial control in the company 27. COMMITTEE OF THE BOARD The company has duly constituted the following committee as per the provisions of section 177 of Companies Act, 2013 and other provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the stock exchanges. (a) Nomination and Remuneration Committee, (b) Audit Committee (c) Stakeholders' Relationship Committee, (d) Risk Management Committee; (e) CSR Committee; (f) Internal Committee for Sexual Harassment of Women at the Work Place. The details of the composition of the audit committee and other committees and their respective terms of reference are included in the corporate Governance report forming part of this annual report. The Audit Committee and other Board Committees meet at regular intervals and ensure to perform the duties and functions as entrusted upon them by the board. 28. DISCLOSURE AS PER TERMS OF PARAGRAPH 9BB OF NON BANKING FINANCIAL COMPANIES PRUDENTIAL NORMS (RESERVE BANK) DIRECTIONS. 1998. The desired disclosure is enclosed herewith as per attached financial statements. 29. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO. Particulars under Companies (Disclosure of particulars in the report of Directors) Rules, 1988 on conservation of energy and technology absorption are NIL. There was no foreign exchange earnings and outgoing except the Remittance of Dividend (USD Equivalent 57584.93) is Rs. 27,70,000/-. 30. ACKNOWLEDGMENT The Board of Directors places its sincere gratitude for the assistance and co-operation received from Banks, Customers and Shareholders. The Directors take this opportunity to express their sincere appreciation for the dedicated services of the Executives and staffs for their contribution to the overall performance of the company. By Order of the Board Ad-Manum Finance Limited CIN- L52520MP1986PLC003405 sd/- (Vinod Kumar Agarwai) Director & Chairman DIN-00136613 sd/- (Jayanta Nath Choudhury) Director-ln-Charge & CEO DIN-00136766 Registered Office: "Agarwai House", Ground Floor 5, Yeshwant Colony, YN Road INDORE-452003 (M.P.) Place: Indore Date: 29-05-2015 |