DIRECTORS' REPORT Your Directors are pleased to present the Company's 29th Annual Report and the audited accounts for the year ended 31st March, 2014. PERFORMANCE REVIEW: During the year under review, the Company has generated total revenue of Rs. 82, 44,501.27 as against 1,16,68,668.49 of the previous financial year. The net profit for the year under review has been Rs. 24,26,705.02 as against Rs. 26,02,974.41 during the previous financial year. Your Directors are continuously looking for the new avenues for future growth of the Company and expect more growth in future period. A detailed analysis of the financial results is given in the Management Discussion and Analysis Report, which forms part of this report. DIVIDEND & APPROPRIATIONS: In order to conserve the resources, in the year 2014-15, the Directors do not recommend any dividend for the year. BOARD OF DIRECTORS: 1. Mrs. Chaitali Bharatbhai Patel (DIN: 06957559), Director of the Company retires by rotation and, being eligible, offers herself for re-appointment. 2.Mrs. Chaitali Bharatbhai Patel (DIN: 06957559), Woman Promoter Director was appointed on the Board as a Director on 30th September, 2014 after getting approval of the shareholders in the previous Annual General Meeting. 3.Independent Directors: The Independent Directors have submitted their declarations of independence, as required pursuant to the provisions of section 149(7) of the Act, stating that they meet the criteria of independence as provided in SUBSIDIARY. JOINT VENTURE AND ASSOCIATE COMPANY: The company has no subsidiary company, Joint Venture Company or Associate Company. PUBLIC DEPOSIT: During the year under review your Company has not accepted deposit form public as envisaged by Chapter V of the Companies Act, 2013 and as per rules and regulations framed by Reserve Bank of India for Non Banking Finance Companies. CHANGE IN THE NATURE OF BUSINESS: There is no Change in the nature of the business of the Company done during the year. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS / OUTGO: As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant data pertaining to conservation of energy, technology absorption are not applicable and hence, not given. Moreover, the Company has no Foreign Exchange earnings and outgo. PARTICULARS OF EMPLOYEES: There are no employees drawing the remuneration in excess of limits prescribed under Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. MATERIAL CHANGES AND COMMITMENTS. IF ANY. AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT: No such material changes and commitments, affecting the financial position of the company have occurred and hence no comments required. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS: During the year no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. CHANGES IN SHARES CAPITAL: The Company has not made any changes in the share capital of the company during the year under review. INSURANCE: All the assets of the company are adequately insured and the Company has developed proper system for taking insurance on all its assets in order to mitigate the risk. AUDITORS: I. STATUTORY AUDITORS & AUDITORS' REPORT: In view of the internal process of re-alignment at the Statutory Auditors' firm, M/s. J. M. Patel & Bros., (FRN: 107707W), Chartered Accountants, Ahmedabad has been reappointed as the Statutory Auditors of the Company. The Statutory Auditors of the Company, M/s. J. M. Patel & Bros., (FRN: 107707W), Chartered Accountants, Ahmedabad hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from M/s. J. M. Patel & Bros. to the effect that their appointment, if made, will be as per the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014. The Statutory Auditors have expressed its intention to hold office from the conclusion of the 29th Annual General Meeting of the Company, up to the conclusion of the 34th Annual General Meeting pursuant to the provisions of the said sections, subject to approval of the Members and thereafter, ratification of the appointment at every Annual General Meeting. Accordingly, a resolution is being submitted to the Members for the appointment of M/s. J. M. Patel & Bros., Chartered Accountants and to allow the Board to fix their remuneration for the current year. II Auditors' Report: The Auditors' Report does not contain any adverse remark(s) and hence no comments required. The notes of accounts referred to in the auditors' report are self explanatory and therefore do not require any further comments. III INTERNAL CONTORL SYSTEM Pursuant to the provisions of section 138 of the Companies Act and rules made there under, the company has proper system of Internal Control and it has also appointed internal auditor to look after the matters of internal control. V SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT: Pursuant to the provisions of section 204 of the Act and The Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, the Company has appointed M/s. Ronak Doshi & Associates, Practicing Company Secretary to undertake Secretarial Audit for the financial year ended on 31st March, 2015. Secretarial Audit Report is attached to this report as Form MR-3". The Board has duly reviewed the Secretarial Auditor's Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Act. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Board of your Company has constituted a CSR Committee. As on 31 March, 2014, the Committee comprises three Directors. CSR Committee has recommended to the Board, a CSR Policy, indicating the activities to be undertaken by the Company, which is approved by the Board and carried to the Annual Report. The company's net profit, turnover and net worth are outside the criteria of Section 135 of the Companies Act, 2013, therefore, it is not required to spend any amount under CSR Activity. ENVIRONMENT. HEALTH AND SAFETY: The Company is a Non banking finance company hence it is not in such activity which affects the environment adversely, however, it accords the highest priority to Environment, Health and Safety. The management is constantly reviewing the safety standards of the employees and the management believes in the concept of sustainable development. MANAGING THE RISKS OF FRAUD. CORRUPTION AND UNETHICAL BUSINESS PRACTICES: i. Vigil Mechanism / Whistle Blower Policy: The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company's Code of Conduct or Ethics Policy. ii. Business Conduct Policy: The Company has framed "Business Conduct Policy". Every employee is required to review and sign the policy at the time of joining and an undertaking shall be given for adherence to the Policy. The objective of the Policy is to conduct the business in an honest, transparent and in an ethical manner. The policy provides for anti-bribery and avoidance of other corruption practices by the employees of the Company. AUDIT COMMITTEE: The Audit Committee comprises of 4 members namely, Chairman Shri Gandalal Ambalal Patel, Shri Kantilal Joytiram Patel, Smt. Chaitaliben B Patel and Shri Pravinbhai Keshavlal Patel. The audit committee duly met at regular intervals during the mentioned financial year and in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. The Meetings of Audit committee was held four times on during the financial year and further details of attendance of directors in the Committee meeting are mentioned in Corporate Governance Report. The Committee periodically discussed the Financial Reporting process, reviewed the Financial Statements, and discussed the quality of the applied accounting principles and significant judgment that affected the Company's Financial Statements. Before presenting the audited accounts to the members of the Board, the Audit Committee recommended the appointment of the statutory auditors, subject to the Board's approval. The audit Committee reviewed with adequacy of internal control systems with the management, statutory and internal auditors. INDUSTRIAL RELATIONS: Industrial Relations during the year under review continued to be cordial. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND: The company has not declared dividend in any of the previous seven years and hence there is no fund lying as unclaimed/unpaid dividend and hence it is not required to transfer to IEPF Account. ACCOUNTING STANDARDS AND FINANCIAL REPORTING: The Company incorporates the accounting standards as and when issued by the Institute of chartered Accountants of India. The Company Complied with the Stock Exchange and legal requirement concerning the Financial Statements at the time of preparing them for the Annual Report. CORPORATE GOVERNANCE: Your Company follows the principles of effective Corporate Governance. The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the revised Clause 49 of the Listing Agreement executed with the Stock Exchange(s). A separate section on Corporate Governance is included in the Annual Report and Certificate from Company's Auditors confirming the compliance with the code of Corporate Governance as enumerated in Clause-49 of the listing agreement with the Stock Exchange is annexed hereto. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT: Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement executed with the Stock Exchange, is presented in a separate section forming part of the Annual Report. DEMATERIALISATION OF EQUITY SHARES: As per direction of the SEBI and Bombay Stock Exchange Limited, the shares of the Company are under compulsory demat form. The Company has established connectivity with both the Depositories i.e. National Securities Depository Limited and Central Depository Services (India) Limited and the demat activation number allotted to the Company is ISIN: INE 006C01015. Presently shares are held in electronic and physical mode (81.68% of shares in demat, 18.32% in physical mode). LISTING: The equity shares of the company are listed in the Bombay Stock Exchange Limited which has the connectivity in most of the cities across the country. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: The Board of Directors duly met at regular intervals during the mentioned financial year and in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. The details regarding the meetings of board of directors and the attendance of the directors in the same is mentioned in Corporate Governance Report. NUMBER OF MEETINGS OF THE AUDIT COMMITTEE: The Audit Committee duly met at regular intervals during the mentioned financial year and in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. The details regarding the meetings of Audit Committee and the attendance of the directors in the same is mentioned in Corporate Governance Report. NUMBER OF MEETINGS OF THE NOMINATION AND REMUNERATION COMMITTEE: The Nomination and Remuneration Committee duly met at regular intervals during the mentioned financial year and in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. The details regarding the meetings of Nomination and Remuneration Committee and the attendance of the directors in the same is mentioned in Corporate Governance Report. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (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 Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. DIRECTORS' RESPONSIBILITY STATEMENT: In terms of section 134[3] [c] of the Act, your Directors state that: a)in the preparation of the annual financial statements for the year ended on 31st March, 2015, applicable accounting standards read with requirements set out under schedule III of the Act, have been followed along with proper explanation relating to material departures, if any, b)such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2015 and of the profit of the company for the year ended on that date, c) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities, d) the annual financial statements are prepared on a going concern basis, e) proper internal financial controls are in place and that the financial controls are adequate and are operating effectively and f) the systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively. PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS UNDER SECTION 186: During the period under report, the Company has not provided guarantee to any person or Body Corporate. It has given current Loans to some parties in its ordinary course of business and as it is an NBFC company, it is outside the purview of Section 186 of the Companies Act, 2013. EXTRACT OF ANNUAL RETURN: Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with rules 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return is annexed herewith as MGT-9 and forming part of the report. RISK MANAGEMENT POLICY: The Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company. The same has also been adopted by your Board and is also subject to its review from time to time. Risk mitigation process and measures have been also formulated and clearly spelled out in the said policy. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES: The Particulars of contracts or arrangements with related parties are given in the prescribed Form AOC-2 appended herewith as Annexure-A. ACKNOWLEDGMENT: Your Directors wish to place on record their sincere appreciation to the financial institutions, Company's bankers and customers, vendors and investors for their continued support during the year. Your Directors are also pleased to record their appreciation for the dedication and contribution made by employees at all levels who through their competence and hard work have enabled your Company achieve good performance year after year and look forward to their support in future as well. REGISTERED OFFICE: 1st Floor, Deshna Chamber, B/h, Kadva Patidar Wadi, Ashram Road, Ahmedabad -380014. Date: 27-08-2015 BY ORDER OF THE BOARD FOR. K Z LEASING AND FINANCE LTD. Sd/-Pravinkumar K Patel (Chairman and Managing Director) (DIN:00841628) Sd/-Ankit P Patel (Director) (DIN:02901371) |