DIRECTORS REPORT TO THE MEMBERS, The Board of Directors of your Company have pleasure in presenting the 23rd Annual Report of the Company along with the Audited statement of accounts and the Auditor's Report for the year ended 31st March, 2015. BUSINESS REVIEW/STATE OF THE COMPANY'S AFFAIRS Total revenues for the year ended March, 31, 2015 amounted to Rs 461 Lacs as compared to Rs. 64.32 Lacs in the previous year. Profit before interest and depreciation for the financial year 2014-15 is amounted to Rs. 387.92 Lacs as against Rs. 13.45 Lacs in the last year. The Profit for the financial year 2014-15 is Rs. 342.40 Lacs as against the profit of Rs. 16.68 Lacs in the previous financial year. Statement on Financial Conditions and Results of Operations of the Company describing the Company's objectives, expectations or predictions are given in Management Discussion and Analysis Report attached to this Board Report. RBI GUIDELINES The Company is registered with the Reserve Bank of India as a NBFC within the provisions of the NBFC (Reserve Bank of India) Directions, 1998. The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it. DIVIDEND The Board of Directors do not recommend any dividend on the Equity Shares of the Company for the current financial year due to conservation of Profits. RESERVES Our Company has in accordance with the provisions of Section 45-IC of the Reserve Bank of India (RBI) Act, 1934, created a Reserve Fund and during the year under review the Company has transferred an amount of Rs. 68,48,058 out of the profits of the year to the said Reserve Fund. CHANGE IN SHARE CAPITAL During the year under report, your Company raised the Authorized Capital of the Company to Rs. 30,00,00,000/- consisting of 3,00,00,000 Equity Shares of Rs 10/- each. During the Year under report, 30,00,000 Equity Shares of Rs. 10/- each were issued by the Company thereby raising the Paid-up Capital at Rs. 24,92,17,131/- PUBLIC DEPOSITS Your Company had neither accepted any Public Deposits during the year nor the Company has any plan to accept any deposits from the public. SUBSIDIARY AND ASSOCIATE COMPANIES As on March 31, 2015, your Company has the following entities as its subsidiaries and Associates : a. Almondz Infosystem Private Limited b. Almondz Insurance Brokers Private Limited c. Almondz Re-Insurance Brokers Private Limited (Step-down Subsidiary) d. Express Infra Financial Consultancy Private Limited e. Latitude 23 Communications Limited f. Apricot Infosoft Private Limited g. Shivsathi Niketan Limited h. Avonmore Developers Private Limited i. Anemone Holdings Private Limited j Glow Apparels Private Limited k Almondz Global Securities Limited (Associate) l Yug Infrastructures Private Limited (Associate) During the period under report, Almondz Global Securities Limited and Red Solutions Private Limited have also became the subsidiaries of your Company w.e.f 01.04-2015 and 17.07.2015 respectively. Pursuant to Sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies in the prescribed format AOC-1 is attached with the Balance Sheet of the Company for the financial year ended March 31, 2015. CONSOLIDATED FINANCIAL STATEMENTS Pursuant to Clause 32 and 50 of the Listing Agreement and Section 129(3) of the Companies Act, 2013, your Company has prepared Consolidated Financial Statements as per the Accounting Standards applicable to the Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors' Report are annexed with this Report. The said Financial Statements are also available on the website of the Company, www.avonmorecapital.in MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis Report, covering matters listed in Clause 49 of the Listing Agreement for the year under review, is given as a separate statement elsewhere in the Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review, the Management of the Company underwent the following changes : ? Mr. Sanjay Grover, Non-Executive Independent Director of the Company resigned from the directorship of the Company w.e.f. 26.05.2014. The Board of Directors placed on record their appreciation for the valuable services and guidance provided by him during his tenure as Director of the Company. ? Ms. Ashu Gupta was appointed as an Additional Director of the Company w.e.f. 20 March 2015. Her tenure is expiring at the ensuing Annual General Meeting of the Company. She has expressed her willingness to accept the office as the Director of the Company and offer herself for re-appointment at the forthcoming Annual General Meeting of the Company. ? In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Govind Prasad Agrawal is liable to retire by rotation at the ensuing Annual General Meeting of your Company and being eligible have offered himself for his appointment. Your Board recommends his re-appointment. ? Ms. Reema Sachdeva stepped down as the Company Secretary, with effect from September 30, 2014 and Mr. Kunal Madaan was appointed as the Company Secretary and a KMP, with effect from December 5, 2014. Pursuant to sub-section (6) of Section 149 of the Companies Act, 2013, a declaration by Independent Director(s) that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 is received and taken on record. An independent director shall hold office for a term up to five consecutive years on the Board of the Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. LISTING The Company is listed with Bombay Stock Exchange Limited and Delhi Stock Exchange Limited. SECRETARIAL AUDITORS Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s N. Gupta & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015, The Secreterial Audit report in the prescribed Form No MR-3, is annexed as Annexure-1. There are no qualifications, reservations or adverse remarks or disclaimers made by M/s N. Gupta & Associates, Company Secretaries in their audit report. 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 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 at the end of the financial year and of the profit and 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 this Act 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; (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 were adequate and operating effectively. AUDITORS AND AUDITORS' REPORT M/s H.K.Chhabra & Co., Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the forthcoming Annual General Meeting is recommended for re-appointment of the Company's Auditors for a period of 5 years from the conclusion of ensuing annual general meeting till the conclusion of Annual General Meeting of the Company to be held in year 2020 subject to ratification every year. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 Further, the report of the Statutory Auditors alongwith notes to Schedules is enclosed to this report. The Auditors' Report is self-explanatory and therefore do not call for any further comments. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The provisions of Section 134(3)(m) of the Companies Act, 2013, and the rules made there under relating to conservation of energy, technology absorption do not apply to your company as it is not a manufacturing Company. However, your Company has been increasingly using information technology in its operations and promotes conservation of resources. There was no foreign exchange inflow or Outflow during the year under review. PARTICULARS OF EMPLOYEES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, No employee have drawn remuneration in excess of the limits set out in the said rules. Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personal) Rules, 2014 are provided in Annexure - 2. CORPORATE GOVERNANCE A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance with conditions of Corporate Governance as also the Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement is annexed to this Report. Further, as required under Clause 49 of the Listing Agreement, a certificate, duly signed by the Managing Director and Chief Financial Officer on the Financial Statements of the Company for the year ended March 31, 2015, was submitted to the Board of Directors at their meeting held on May 29, 2015. The certificate is attached to the Report on Corporate Governance. GROUP COMING WITHIN THE DEFINITION OF GROUPS DEFINED IN THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 (54 of 1969) The following persons constitute the Group coming within the definition of group as defined in the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) : Mr. Navjeet Singh Sobti Ms. Gurpreet N S Sobti Innovative Money Matters Private Limited Almondz Global Securities Limited Or any other Company, firm or trust promoted or controlled by the above. The above disclosure has been made; inter alia, for the purpose of Regulation 10(1)(a)(ii) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. MEETINGS OF THE BOARD During the year 6(six) meetings of the Board of Directors were held i.e. 28th May, 2014; 14th August, 2014; 14th November, 2014, 13th February, 2015, 20th February 2015 and 30th March 2015. For further details, please refer report on Corporate Governance forming part of Annual Report. AUDIT COMMITTEE The Audit Committee comprises of three Independent Directors and one Non-Executive Director viz., Mr. Ajay Kumar (Chairman), Mr. Govind Prasad Agrawal, Mr. Shyam Sunder Lal Gupta and Mr. Chand Krishan Tikku as members. All the recommendations made by the Audit Committee were accepted by the Board. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). Since there was no unpaid /unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply. EXTRACTS OF ANNUAL RETURN An extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in the prescribed Form No. MGT 9 is attached as Annexure - 3. INFORMATION ON MATERIAL CHANGES AND COMMITMENTS There are no material changes or commitments affecting the financial position of the Company which have occurred between March 31, 2015 and August 14, 2015, being the date of this report. RELATED PARTY TRANSACTIONS The Company has adopted Framework on Related party Transactions for the purpose of identification and monitoring of such Transactions. Details of Material Contracts and arrangements or transactions with related party on an arm's length basis with respect to transactions covered under Section 188 (1) of the Act in the prescribed Form No. AOC-2, is attached in Annexure-4 Further, details of Related Party transactions as required to be disclosed by Accounting Standard-18 on "Related Party Disclosures" specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, are given in the Notes to the Financial Statements. During the year, the Company has not entered into any transactions with Related Parties which are not on an arm's Length Basis and which require disclosure in this report in terms of the provisions of Section 188(1) of the Act. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY A Risk Management Policy for the Company has been adopted by the Board. The Company manages risk through a detailed Risk Management Policy framework which lays down guidelines in identifying, assessing and managing risks that the businesses are exposed to. Risk is managed by the Board/Risk Management Committee of the Board through appropriate structures that are in place at your Company, including suitable reporting mechanisms. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company has not developed and implemented any Corporate Social Responsibility initiative under the provisions of Section 135 of the Companies Act, 2013, read with Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014, as the said provisions are not applicable. PARTCULARS OF LOANS, GUARANTEE OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 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 whose principal business is acquisition of securities. Details of guarantees and/or security in connection with loans to other Bodies Corporate or persons as covered under the provisions of Section 186 of the Act, are given in the Standalone Financial Statements. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS During the year under report, there are no significant or material orders passed by any regulator, court or tribunal impacting the going concern status and Company's operations in future. EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS Pursuant to the provisions of the Companies Act, 2013 and revised Clause 49 of the Listing Agreements with Stock Exchanges, the Board has carried out an annual performance evaluation of its own performance, the individual director's performance including Chairman and independent directors as well as an evaluation of the working of all Board Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. In compliance with the provisions of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement with the Stock Exchanges, the Independent Directors held a meeting on March 30, 2015, and : • Reviewed the performance of non-independent directors and the Board as a whole • Reviewed the performance of the Chairperson of the Company • Assessed the quality, quantity and timeliness of flow of information between the Company's management and the Board, which is necessary for the Board to effectively and reasonably perform their duties Necessary implementations of their suggestions have been initiated. HUMAN RESOURCES Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. VIGIL MECHANISM Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with clause 49 of the Listing Agreement The Company has established a Vigil Mechanism for its Directors and employees to report their genuine concerns or grievances, actual or suspected fraud or violation of the Codes of Conduct or policy. The said mechanism encompasses the Whistle Blower Policy and provides for adequate safeguards against victimization of persons who use such mechanism. It also provides direct access to the Chairman of the Audit Committee. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.avonmorecapital.in under whistle blower Policy link. INTERNAL CONTROL SYSTEMS ACMS's Internal control systems is designed to ensure operational efficiency, accuracy and promptness in financial reporting and compliance with Laws and regulations. The internal control system is supported by an internal audit process for reviewing the adequacy and efficiency of the internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the management and are reviewed by the Audit Committee of the Board, which also reviews the adequacy and effectiveness of the internal controls. ACMS's internal control system is commensurate with its size, nature and operations. NOMINATION AND REMUNERATION POLICY In Accordance with the provisions of Section 178 of the Companies Act, 2013, the Board of Directors have adopted a Policy on Directors appointment and remuneration, including the criteria for determining qualification positive attributes independence of a Director and other matters. The Remuneration policy for directors, Key Managerial Personnel and all other employees is aligned to the philosophy on the commitment of fostering a culture of leadership with trust. The Remuneration policy aims to ensure that the level and composition of the remuneration of Directors, Key Managerial Personnel and all other employees is reasonable and sufficient to attract, retain and motivate them to successfully run the Company. ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their appreciation for the commitment displayed by all the employees for their commitment, commendable efforts, team work and professionalism, in the performance of the Company during the year. For and on behalf of the Board of Directors Avonmore Capital & Management Services Limited Govind Prasad Agrawal Director(DIN : 00008429) Ashok Kumar Gupta Managing Director (DIN : 02590928) Place : New Delhi Date : 14th August, 2015 |