DIRECTORS' REPORT To, The Members, Your directors have pleasure in presenting their Twenty-first Annual Report on the business and operations of Decillion Finance Limited (the "Company") together with the audited statement of accounts for the year ended 31st March, 2015. Operating & Financial Performance Gross revenues increased to Rs. 1,04,88,991, a growth of around 116.21% against Rs. 48,51,399 in the previous year. Profit before taxation was Rs. 5,38,697 against Rs. 7,35,184 in the previous year. The percentage of profit has decreased by 26.73% due to onetime exceptional expenditure towards Initial Listing Fees & Merchant Bankers Fees. After providing for taxation of Rs. 1,61,967 & Rs. 1,97,714 respectively, the net profit of the Company for the year under review was placed at Rs. 3,76,730 as against Rs. 5,37,470 in the previous year. Dividend With the view to conserve the resources of Company, the Directors are not recommending any dividend. Changes in Share Capital During the Financial Year 2014-15, there has been no change in the share capital of the Company. Extract of Annual Return The extract of Annual Return, in format MGT-9, for the Financial Year 2014-15 has been enclosed with this report as Annexure I. Board of Directors In accordance with the provisions of Companies Act, 2013 Ms. Bharti Ranga (DIN: 06864738), Director of the Company retires by rotation and being eligible offers herself for re-appointment. At the 20th Annual General Meeting of the company held on 30th September, 2014 the Company had appointed Mr. Ashish Jalan (DIN 06503424) and Mr. Nikunj Kanodia (DIN 06427863) as independent directors under the Companies Act, 2013 for 5 consecutive years for a term upto September, 2019. 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 listing agreement. Key Managerial Personnel Ms. Poonam Dalmia, Company Secretary was appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013 w.e.f. 21st July, 2014 and Ms. Abhijit Nagee resigned on 21st July, 2014 as Company Secretary and no other Key Managerial Person has been appointed or retired or resigned during the year under review. Number of Board Meetings During the Financial Year 2014-15, eleven (11) meetings of the Board of Directors of the Company and four (4) Audit Committee Meetings were held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Company's Remuneration Policy is available on the Company's website at www.decillion.co.in and also forms part of Directors Report as Annexure II. Declaration by Independent Directors The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Committees of the Board Currently, the Board has three committees: the audit committee, nomination and remuneration committee and stakeholders' relationship committee. All committees consist of requisite number of independent directors. Particulars of Loan, Guarantees and Investments under Section 186 The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The detail of the investments made by the Company is given in the notes to the financial statements. Related Party Transactions All Related party transactions that were entered into during the financial year were on an arms length basis and in the ordinary course of business. There are no material significant related party transactions made by the Company during the year that would have required shareholder approval under Clause 49 of the Listing Agreement. All related party transactions are reported to the Audit Committee. Prior approval of the Audit Committee is obtained on a yearly basis for the transactions which are planned and/ or repetitive in nature and omnibus approvals are taken within limits laid down for unforeseen transactions. The disclosure under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable. The Policy on Related Party transactions as approved by the Board has been uploaded on the Company's Website and may be accessed at the link <http://decillion.co.in/related-party-policy>. The details of the transactions with related parties during 2014-15 are provided in the accompanying financial statements. None of the Directors had any pecuniary relationship or transactions with the Company during the year under review. Director's Responsibility Statement The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act, 2013 and Clause 49(III)(D)(4)(a) of the listing agreement with Stock Exchanges in the preparation of the annual accounts for the year ended on 31.03.2015 and state that : (i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) the Directors have 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 of the Company for that period; (iii) the Directors have 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; (iv) the Directors have prepared the annual accounts on a going concern basis; (v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (vi) there is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Statutory Auditor M/s. S. K. Rungta & Co., Chartered Accountants (FRN: 308081E), Kolkata, were appointed as Statutory Auditors of the Company from the conclusion of the Annual General Meeting held on 30.09.2014 until the conclusion of 23rd Annual General Meeting to be held in the year 2017. 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. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. Secretarial Auditor Mr. Anand Khandelia, Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for Financial Year 2014-15 form a part of the Director Report and is attached here as Annexure III. The Secretarial Audit Report contains a remark for not appointing Chief Financial Officer, it has been stated that Company will soon appoint the CFO u/s 203 of the Companies Act, 2013. Explanation to Auditor's Remarks The Auditors' Report by the Statutory Auditors and by the Secretarial Auditor in the Secretarial Audit Report being self-explanatory, does not call for any further comments by the Board of Directors. Material Changes Affecting the Financial Position of the Company Your Company has received In Principal Approval for listing of equity shares on the BSE Limited under direct listing vide letter no. DCS/DL/MA/IP/1068/2014-15 dated 23rd March, 2015. Soon your Company will be listed at BSE Limited. Internal Control Systems and Their Adequacy The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Director. Conservation of Energy & Technology Absorption Since the Company does not own any manufacturing facility, being an Investment Company, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable. Foreign Exchange Earnings & Outgo There is no foreign exchange earnings and outgo during the year under review. Details of Subsidiary As on March 31, 2015 the Company had five Indian subsidiaries. There has been change in the number of subsidiaries but there has been no change in the nature of business of the subsidiaries, during the year under review. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in the prescribed format, AOC 1 is also included in the Board Report and is attached in the Annual Report as Annexure IV. In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company www.decillion.co.in . Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company www.decillion.co.in . Vigil Mechanism / Whistle Blower Policy The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, details of which is available on the Company's website www.decillion.co.in Management's Discussion and Analysis Report The Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed to this report. Corporate Governance The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report and annexed as Annexure V. Code of Conduct The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.decillion.co.in . All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. Deposits The Company being a non- banking financial Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet. Managerial Remuneration The information required pursuant to Section 197(12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached here as Annexure VI and forms a part of the Directors' Report. There are no employees who are in receipt of remuneration in excess of the limit specified under section 134(3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. RBI Guidelines for Non-Banking Financial Companies The Company has observed all the prudential norms prescribed by the Reserve Bank of India. The Schedule as required in terms of Paragraph 13 of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2015 is annexed herewith. Listing of Shares on BSE Your Company has received In Principle Approval for Listing of Equity Shares on the Exchanges under Direct Listing vide letter DCS/DL/MA/IP/1068/2014-15 dated March 23, 2015. Acknowledgment Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, the Ministry of Corporate Affairs, the Reserve Bank of India, Local Bodies, Executives, Staff and others at all levels for their continuous support, cooperation, assistance and look forward to their continued support in the future. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. By Order of the Board of Directors For Decillion Finance Limited Mahesh Kumar Bhalotia Director (DIN : 00280743) Jitendra Kumar Goyal Director (DIN : 00468744) Place: Kolkata Date: 30/05/2015 |