DIRECTORS' REPORT & STATE OF AFFAIRS REPORT TO THE MEMBERS, LIBORD FINANCE LIMITED Your Directors have pleasure in presenting the 21st Annual Report along with the Audited Accounts of the Company for the year ended 31st March, 2015 1. REVIEW OF OPERATIONS (a) Standalone Results The income from operation on standalone basis during the year was Rs.82.15 Lakhs (Previous Year 167.79 Lakhs). The company's turnover has decreased by about 51.04% on standalone basis due to less than average performance in the 4th quarter of this financial year largely on account of less favourable business conditions. The profits have decreased by 78.63% due to low level of operations. (b) Consolidated Results In a tough business environment that prevailed in the fiscal 2014-15, your company has achieved a turnover of Rs. 85.75 lakhs which is 48.89% less than Rs. 167.79 lakhs achieved in the previous year. This was mainly due to decrease in the revenues from the Consultancy Services provided by the Company. The net profits have decreased from Rs 45.10 lakhs to Rs 10.39 lakhs ( 76.90%) on consolidated basis. 2. OUTLOOK & PROSPECTS According to World Economic Outlook (WEO) Update published by the IMF in April 2015, the Global growth remains moderate, with uneven prospects across the main countries and regions. However, it is projected to be 3.5 percent in 2015, in line with forecasts in the January 2015 World Economic Outlook (WEO) Update. Relative to last year, the outlook for advanced economies is improving, while growth in emerging market and developing economies is projected to be lower, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries. The Indian Economy is reported to have achieved a growth rate of about 7.3% in 2014-2015 upon changes in the methods of computation. Though it was much better compared to a dismal performance of last year, it is yet far away from what can be termed as a glamorous growth rate of 10.4% achieved in the year 2010. According to the Economic Survey 2014-15, "Perspiration and inspiration, investment and efficiency, respectively, determine long-run growth. But the Indian private investment climate is clouded by the experience of the last decade. A combination of factors-weak corporate balance sheets, an impaired banking system, difficulty of exit, the deficiencies of the public private partnership (PPP) model in infrastructure-could hold back private investment going forward." On January 30, 2015 the Central Statistics Office released a new GDP series that entailed shifting the base year from 2004- 05 to 2011-12 but also using more data and deploying improved methodologies. However, as the Economic Survey also opined "These numbers seem difficult to reconcile with other developments in the economy. 2013-14 was a crisis year - capital flowed out, interest rates were tightened, there was consolidation-and it is difficult to see how an economy's growth rate could accelerate so much in such circumstances. This growth surge also appears to have been accompanied by dramatic declines in savings and investment ratios. For example, gross fixed capital formation declined from 33.6 percent in 2011-12 to 29.7 percent in 2013-14 while gross domestic savings declined from 33.9 percent to 30.6 percent. The implication is that the growth surge in the crisis year of 2013-14 was also a massive productivity surge, reflected in an incremental capital ratio that declined by about 30 percent, and total factor productivity growth that improved by over 2 percentage points. The data show that private corporate investment increased robustly in 2013-14 which seems at odds with stressed balance sheets and the phenomenon of stalled projects" However, amidst an uncertain global economic environment faced with uncertainty and volatility, the Indian economy has showed considerable resilience to the euro-zone crisis, and greater degree of preparedness for the possible hike in federal interest rates in the USA. According to the opinion given by several international financial institutions and rating agencies, it has been estimated that India is poised to be the world's fastest growing economy outpacing China soon. It can be reasonably expected that the government's 'policies of reforms' together with several positive factors such as low rates of inflation, decrease in crude oil prices and fiscal consolidation and a more favourable balance of payments may help prepare a sound base for accelerated overall growth in India.With the outlook for the economy improving, the Company sees growth opportunities for its business in the year ahead. 3. SHARE CAPITAL There was no change in the share capital of the company during the year under review. The paid up equity capital remained at Rs. 800 lakhs comprising of 80 lakh shares of Rs. 10 each as on March 31, 2015. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity. 4. DIVIDEND In view of insufficient profits made by the company due to reasons discussed above, your directors do not recommend any dividend for the current year under review. A sum of Rs. 9.60 lakhs has been transferred to the Reserves. Pursuant to transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has adjusted an amount of Rs. 5.23 lakhs against the opening balance in the statement of Profit & Losss under Reserve and Surplus. 5. FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size and nature of its operations. During the year, controls were tested and no material weakness in design and operation were observed. 7. DIRECTORS & KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013, Mr. Nawal Agrawal (DIN - 01753155), Director of the Company will be retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Dr. (Mrs.) Vandna Dangi (DIN - 00886496) has been appointed as the Managing Director & Chief Executive Officer with effect from 10.3.2015 for a term of three years. Details about her remuneration are provided in the Notice as well as Annexure to the Directors' Report. During the year under review, Mr. Nawal Agrawal has been appointed as the CFO of the Company with effect from 10.3.2015 for a term of three years. Mr. V. H. Pandya (DIN - 00031857), an Independent Director of the Company who was re-appointed as a Director, liable to retire by rotation has expressed his unwillingness to be reappointed due to ill health and old age issues in the Annual General Meeting to be held on 30.9.2015. The Board places on record deep appreciation for the commendable contribution made by him during his long association with the company as an independent director. 8. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS In pursuance of SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 to all Recognized Stock Exchanges, amongst others, made the compliance with the provisions of amended Clause 49 of the Listing Agreement, non-mandatory for time being, to those companies having paid-up equity share capital not exceeding Rs 10 Crore and Net Worth not exceeding Rs. 25 Crore as on the last day of the previous financial year. Considering that the Company's paid-up equity share capital was less than Rs 10.00 Crore and the Net Worth was less than Rs 25 crore as on 31.3.2014, compliance with the provisions of revised Clause 49 of the Listing Agreement are not mandatory to the Company. Therefore, a separate Section on Corporate Governance and Management Discussion and Analysis Report and other details as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange do not form part of this Annual Report. 9. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the year there were five Board Meetings held on 26.05.2014, 30.07.2014, 31.10.2014, 21.01.2015 and 9.03.2015. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 10. DECLARATION GIVEN BY INDEPENDENT DIRECTORS As per the requirement of Section 149 (7) of the Companies Act, 2013, the Independent Directors have given their respective declarations that they meet the criteria of independence as specified under Section 149 (6) of the Act. 11. REMUNERATION POLICY Based on the recommendation of the Nomination & Remuneration Committee, the Board of Directors has approved and adopted a Remuneration policy for Directors, Key Managerial Personnel and other employees of the Company under section 178 (3) of the Companies Act, 2013. The remuneration policy is annexed to this Report and forms part of this Report. 12. CODE OF CONDUCT The Code of Conduct for the Board of Directors and the Senior Management has been adopted by the Company. The Code of Conduct has been disclosed on the website of the company at www.libord.com 13. SUBSIDIARY COMPANIES/ ASSOCIATED COMPANIES The Company has M/s. Libord Stock Brokers Private Limited (LSBPL) as its Subsidiary Company. LSBPL is registered as a stock broker under the SEBI Act and is an approved member of the BSE Limited. Your Company has 93.57% of equity holding in LSBPL. The net profit after tax of LSBPL is Rs. 0.79 lakhs for the year ended on 31.3.2015. LSBPL is yet to commence business as a trading member of the BSE Ltd. M/s. Libord Advisors Private Ltd (LAPL) is an Associate Company of your Company. Your Company has 46.29% of the equity holding in the Associate Company LAPL. LAPL is a SEBI registered Category 1 Merchant Banker w.e.f. 18.10.2013. The net profit after tax of LAPL is Rs. 7.73 lakhs for the year ended as at 31.3.2015. During the year 2014-15, no Company has become or ceased to be the Company's subsidiary or associate. 14. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has adopted a Whistle Blower Policy to report to the Management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy. Under this policy, the employees can approach the Company's Compliance Officer and/or Chairman of the Audit Committee. Whistle Blower Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination be meted out to any person for a genuinely raised concern. The Whistle Blower Policy of the Company is also posted on the website of the Company. 15. PREVENTION OF INSIDER TRADING The Company has adopted a code of conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The "Code of Fair Disclosure, Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders" has been adopted and has been disclosed on the website of the company at www.libord.com The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. 16. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The provisions of Section 135 of the Companies Act, 2013 are not presently applicable to the Company. 17. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (3c) & (5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed: (i) That in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. (iii) That the Directors have taken proper and sufficient care of 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. (iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a going concern basis. (v) That the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (vi) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively 18. BUSINESS RISK MANAGEMENT Pursuant to section 134 (3) (n) of the Companies Act, 2013, the Company has undertaken suitable measures for the development and implementation of a risk management policy for the Company including identification of elements of risk, if any, which in the opinion of the board may threaten the existence of the Company. At present the Company has not identified any element of risk which may threaten the existence of the Company. 19. PARTICULARS OF MATERIAL ORDERS During the year under review, neither any Regulator nor any Court or Tribunal has passed any significant and material order impacting the going concern status and the Company's operations in future. 20. BOARD EVALUATION The performance of Board of Directors and the Committees constituted by the Board and the individual Directors has been evaluated during the Financial Year ended 31.3.2015. 21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES Particulars of contracts or arrangements with related parties as required pursuant to the provisions of section 134(3)(h) and rule 8 of the Companies (Accounts) Rules, 2014 in form no. AOC- 2 is annexed to this report and forms part of this report. 22. PURCHASE OF SHARES OF THE COMPANY The Company does not give any loan, guarantee or security, or any financial assistance to the employees of the Company for the purpose of purchase or subscription for any shares of the Company pursuant to Section 67 (2) of the Companies Act, 2013. 23. EXTRACT OF ANNUAL RETURN An extract of the Annual Return as provided under section 92(3) of the Companies Act, 2013 is annexed to this Report and forms part of this Report. 24. AUDIT COMMITTEE a) Terms of Reference To oversee iter alia, the Company's financial reporting process and disclosure of its financial information, to recommend the appointment of Statutory Auditors and fixation of the audit fees, to review and discuss with the Auditors about internal control systems, scope of audit including observations of the auditors on adequacy of internal control systems, major accounting policies & practices, adopting accounting standards and complying various requirements concerning financial statements, if any, to review the Company's quarterly and annual financial statements before submission to the Board of Directors b) Composition of Audit Committee The Audit Committee comprises of three directors with Independent Directors forming the majority. Mr. Romil Choksey, is the Chairman of the Audit Committee. Mr. V.H. Pandya and Mr. Lalit Kumar Dangi are the other two members of the Audit Committee. The members possess adequate knowledge of accounts, audit and finance, among others. The composition of the Audit Committee meets the requirement as per section 177 of the Companies Act, 2013. There are no recommendations of the Audit Committee which have not been accepted by the Board. During the year, four Audit Committee meetings were held on 26.05.2014, 30.07.2014, 31.10.2014 & 21.01.2015. 25. 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, Ms Shivani Surana Member of the Institute of Company Secretaries of India (Membership Number ACS: 35359) and a Company Secretary in Practice (CP Number: 13273) had been appointed for conducting the Secretarial Audit of the Company for the financial year 2014-15. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a Secretarial Audit report. The observations made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 (3) of the Companies Act, 2013 besides that the Company could not appoint a Company Secretary in the Year 2014-15 as it could not locate a suitable candidate. The company is currently in the process of appointing a Company Secretary. 26. AUDITORS At the Annual General Meeting, Members will be required to appoint Auditors for the next term. M/s. Amar Bafna & Associates, Chartered Accountants, Mumbai, the existing Auditors have furnished a certificate, confirming that if re-appointed, their re-appointment will be in accordance with Section 139 read with Section 141 of the Companies Act, 2013. The Members are requested to consider their re-appointment as Auditors of the Company for the next term of one year, and authorize the Board of Directors to fix their remuneration. The Auditors Report to the shareholders for the year under review does not contain any qualification. 27. CERTIFICATION AND RECOGNITION A Certification of Registration as a stock broker was granted by SEBI under SEBI Act to Libord Stock Brokers Private Limited (A Subsidiary Company of Libord Finance Limited), to act as a member of the BSE Limited w.e.f. 16.4.2015. 28. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.The details of the investments made by company is given in the notes to the financial statements. 29. STATEMENT PURSUANT TO LISTING AGREEMENT The Company's Equity Shares are listed at BSE Ltd., Mumbai. The listing fee for the year under review has been paid to BSE timely. 30. PERSONNEL The information required to be disclosed in the Directors' Report pursuant to section 197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 is set out as an Annexure to the Report. 31. ACKNOWLEDGEMENTS Your Directors place on record their appreciation for the valuable contribution made by the staff members of the company. Your Directors wish to place on record their appreciation for the active support given by Banks, Investors, Shareholders, Brokers, Employees and Customers. By the Order of the Board Dr.(Mrs.) Vandna Lalit Dangi Managing Director Place: Mumbai Date: 31.07.2015 |