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The directors are pleased to present the 24th Annual Report of your Company together with the audited Financial Statements for the Financial Year 2018-19.
I. COMPANY’S PERFORMANCE
The Company’s financial highlights for the financial year ended on 31st March, 2019 are summarized below:
(Amount in Rs.)
Less: Total Expenditure
Profit / (Loss) before Taxation
Profit / (Loss) after Tax
II. PERFORMANCE REVIEW AND STATE OF COMPANY’S AFFAIRS
The Company’s main business is dealing in shares, securities, futures and options.
The net receipts from operations during the year under review were Rs. 6,17,94,266/- as against Rs. 57,43,754/-in the previous year. The profit after tax is Rs.7,89,236/-/-as against Rs. 3,29,342-/in the previous year.
The Company has recorded a growth in revenue and profit during the year under review.
Your Directors feel that it is prudent to plough back the profits for future growth of the Company and do not recommend any dividend for the financial year ended on 31st March, 2019.
IV. EXTRACT OF ANNUAL RETURN
Pursuant to section 134 (3) (a) and section 92 (3) of the Companies Act 2013 (hereinafter referred as “Act”), read with Rule 12 of the Companies (Management and administration) Rules, 2014 as amended, an extract of Annual Return in form MGT-9 as on March 31, 2019 has been prepared and enclosed as Annexure -I which forms part of this report.
The above referred extract of Annual Return in form MGT-9 as on March 31, 2019 is available on the website of the Company and can be accessed at http://www.bflfin.com/corporate-govrnance/#tab-id-7
V. NUMBER OF MEETINGS OF BOARD OF DIRECTORS
Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other matters.
The Meetings of the Board are held at the Registered Office of the Company at 1, Tara Nagar, Ajmer Road, Jaipur -302006 (Rajasthan). During the year under review,4 (Four) Board Meetings were held on May 15, 2018; August 09, 2018;November 13, 2018 andJ anuary 31, 2019.The intervening gap between the meetings was within the period prescribed under the Act, Secretarial Standard-1 and the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as “Regulations”).
The details of board and committee meetings held during the financial year ended 31st March, 2019 and attendance thereto are set out in the Corporate Governance Report enclosed as Annexure VI which form a part of this report.
VI. DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF CODE OF CONDUCT
The company has received necessary declaration from each of the Independent Directors of the Company that they meet the criteria of independence as provided under section 149(7) of the Act and Regulation 16 (b) and 25 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as “Regulations”) in respect of their position as an “Independent Director” of BFL Asset Finvest Limited(Formerly known as BFL Developers Limited).
In compliance with the regulations and act, the company has framed and adopted a code of conduct and ethics (“the code”). The code is applicable to the members of the board, the executive officers and all the employees of the company.
All the members of the Board and Senior Management Personnel have affirmed compliance to the code for the financial year ended on March 31, 2019.
VII. DIRECTOR’S APPOINTMENT CRITERIA AND REMUNERATION POLICY ETC.
The board has formulated policy on directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters as mandated under Section 178 (3)/(4) of the Act and Regulation 19 read with Part D of Schedule II of the Regulations, is available on the website of the Company and can be accessed at http://www.bflfin.com/wp-content/uploads/2018/02/Nomination-and-Remuneration-Policy Website.pdfand also in the Corporate Governance Report. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company.
The salient aspects covered in the Nomination and Remuneration Policy have been outlined below:
(a) To review the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the Company’s corporate strategy, with the objective to diversify the Board;
(b) To identify individuals suitably qualified to be appointed as the KMPs or in the senior management of the Company;
(c) To recommend to the Board on the selection of individuals nominated for Directorship;
(d) To make recommendations to the Board on the remuneration payable to the Directors / KMPs /Senior Officials so appointed /reappointed;
(e) To assess the independence of independent directors;
(f) such other key issues/matters as may be referred by the Board or as may be necessary in view of the regulations and provision of the Actand Rules thereunder.
(g) To make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;
(h) To ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
(i) To devise a policy on Board diversity;
(j) To develop a succession plan for the Board and to regularly review the plan;
(h) Performance Evaluation of every Director, Key Managerial Personnel and Senior Management Personnel
VIII. AUDITORS & AUDITOR’S REPORT
1. Statutory Auditors & Audit Report
M/s. Khilnani& Associates, Chartered Accountants (Firm Registration No. 005776C), Jaipur were appointed as Statutory Auditors to hold office till the conclusion of the 25thAnnual General Meeting of Company.
As required under the provisions of Section 139 of the Companies Act, 2013, the Company has received a written certificate from M/s. Khilnani & Associates, Chartered Accountants (Firm Registration No. 005776C) to the effect that they confirm with the limits specified in the said Section and that they are not disqualified for appointment within the meaning of Section 141 of the said Act.
As per the provisions of Section 40 of the Companies (Amendment) Act, 2017 notified with effect from 7th May, 2018, there is no requirement for ratification of appointment of statutory auditors at every AGM and therefore, the board has not proposed the ratification of appointment of the said auditor at the ensuing AGM.
The Financial Statements and the Auditor’s Report for the financial year ended on 31st March, 2019 are free from any qualification, reservation or adverse remarks; further the notes on accounts are self-explanatory. The Auditors’ Report is enclosed with the financial statements in this annual report.
2. Secretarial Auditor& SecretarialAudit Report
As per Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every Listed Company is required to appoint a Secretarial Auditor to carry out Secretarial Audit of the Company.
In consonance with the requirements of aforementioned, M/s V. M. & Associates, Company Secretaries in Practice, Jaipur, (Firm Registration No. P1984RJ039200) were appointed as secretarial auditors to conduct the secretarial audit of the Company for the financial year 2018-19.
Secretarial Audit Report issued by M/s V. M. & Associates, Company Secretaries in Practice, in respect of the secretarial audit of the Company in Form MR-3 for the financial year ended on 31st March, 2019, is given in Annexure II to this Report.
The Secretarial Audit report for the financial year ended 31st March, 2019 is free from any qualification, reservation or adverse remark.
Further, the Board in its meeting held on May 28, 2019 has re-appointed M/s V. M. & Associates, Company Secretaries in Practice, Jaipur as Secretarial Auditor of the Company to carry out secretarial audit of the Company for the financial year 2019-2020.
3. Internal Auditor
Pursuant to Section 138 of the Actr ead with Companies (Audit and Auditors) Rules, 2014, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors to carry out Internal Audit of the Company.
In consonance with the aforementioned, M/s Shiv Shankar Khandelwal& Co., Chartered Accountants, Jaipur (Firm Registration No. 006852C) was appointed to conduct the Internal Audit of the Company for the financial year 2018-19.
The Internal Audit Report is received yearly by the Company and the same is reviewed and taken on record by the Audit Committee and Board of Directors.
The Board in its meeting held on May 28, 2019 has re-appointed M/s Shiv Shankar Khandelwal & Co., Chartered Accountants, Jaipur (Firm Registration No. 006852C) as the Internal Auditor of the Company for the financial year 2019-20.
IX. LOANS, GUARANTEES AND INVESTMENTS IN SECURITIES BY THE COMPANY
Pursuant to Section 186(11) of the Act loans made, guarantees given or securities provided or acquisition of securities by a Non Banking Financial Company(NBFC) registered with Reserve Bank of India, in the ordinary course of its business are exempted from the applicability of Provisions of Section 186 of the Act. As such, the particulars of loans and guarantee have not been disclosed in this Report. However the same are mentioned in the Note No.6 of audited financial statement for the financial year ended on March 31, 2019.
X. RELATED PARTY TRANSACTIONS
All the related party transactions that were entered during the financial year are done on arm’s length basis. Relevant Form for disclosure of particulars of contracts/arrangements/Transactions entered into by the company with related parties referred to in sub-section (1) of section 188 of the Actis given in Annexure III to this Report. The Company’s Policy on Materiality of Related Party Transactions is put up on the company’s website and can be accessed athttp://www.bflfin.com/wp-content/uploads/2018/02/P0LICY-0N-MATERIALITY-OF-RELATED-PARTY-TRANSACTION.pdf
XI. TRANSFER TO RESERVES:
Reserve and Surplus account as at March 31, 2019 of your company increased by3.19 % to Rs.2,55,15,179/- as against Rs.2,47,25,943/-in the previous financial year. Your Company has proposed to transfer to Special Reserve 20% of the profit in compliance with the extent norms of Reserve Bank of India (RBI).
The board does not propose to transfer any amount to General Reserve.
XII. RBI COMPLIANCES:
The company has complied with all the provisions of Master Direction - NonBanking Financial Company -Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.
XIII. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY/CHANGE IN THE NATURE OF BUSINESS
In pursuance to Section 134 (3) of the Act, No material changes and commitments have occurred after the closure of the financial year to which the financial statements relate till the date of this report, affecting the financial position of the company.
XIV. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Particulars with respect of conservation of energy, technology absorption, foreign exchange earnings and outgo:
The information required under Section 134(3) (m) of the Actread with the Companies (Accounts) Rules, 2014 relating to the conservation of energy and technology absorption, foreign exchange earnings and outgo are given below:
(a) Conservation of energy:
(b) Technology absorption
(c) Foreign exchange earnings and Outgo
Foreign exchange earnings and outgo is reported to be NIL during the financial year under review.
XV. RISK MANAGEMENT
The Company has developed and implemented a risk management policy which encompasses practices relating to identification, assessment monitoring and mitigation of various risks to key business objectives. The Risk management framework of the Company seeks to minimize adverse impact of risks on our key business objectives and enables the Company to leverage market opportunities effectively.
The various key risks to key business objectives are as follows:
Liquidity Risk: It is the risk that the Company will be unable to meet its financial commitment to a Bank/ Financial Institution in any location, any currency at any point in time. Liquidity risk can manifest in three different dimensions for the Company.
Funding Risk: To replace net outflows due to unanticipated outflows.
Time Risk: To compensate for non receipt of expected inflows of funds.
Call Risk: Due to crystallization of contingent liabilities or inability to undertake profitable business opportunities when desirable.
Interest Rate Risk: It is the risk where changes in market interest rates might adversely affect the Company’s financial condition. The short term/immediate impact of changes in interest rates are on the Company’s Net Interest Income (NII). On a longer term, changes in interest rates impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all re-pricing mismatches and other interest rate sensitive positions.
XVI. CORPORATE SOCIAL RESPONSIBILITY
Company’s net worth is below than Rs. 500 crore, Turnover is less than Rs.1000 Crore and Net profit (Before Tax) is less than Rs. 5 Crore, hence provisions of section 135 of the Actread with the Companies (Corporate Social Responsibility Policy) rules, 2014, are not applicable on the Company.
XVII. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the act, the Board of Directors has carried out an annual performance evaluation of its own performance, board committees and individual directors. The performance of the Board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the Board composition and structure, effectiveness of board processes, manner of conducting the meetings, value addition of the Board members and corporate governance etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January, 2017.
The detailed evaluations parameters and the process have been explained in Corporate Governance Report.
Other Statutory Disclosure as required under Rule 8(5) of the Companies (Accounts) Rules, 2014
I. Financial Summary/highlights are already mentioned in the beginning of the report.
II. CHANGE IN NATURE OF BUSINESS
There is no change in the nature of Business of the Company.
III. DIRECTORS/KEY MANAGERIAL
Following changes occurred in the Board of Directors:
- The Board of Directors at its meeting held on August 09, 2018 appointed Mr. Kuldeep Jain, as Additional Director in the capacity of Independent Director of the Company and it is proposed to appoint him as an Independent Director at the ensuing AGM, for a period of five years commencing from August 9, 2018 to August 8, 2023.
Mr. Kuldeep Jain fulfills the conditions for his appointment as an Independent Director as specified in the Act and of Securities and Exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015.He has a vast expertise and knowledge, it will be in the interest of the Company that Mr. Kuldeep Jain is appointed as an Independent Director.
- Mr. Surendra Mehta, resigned from the post of Independent Director with effect from August 11, 2018due to personal resons.
- On the basis of report of performance evaluation done by Nomination and Remuneration Committee and Board of Directors of the company the performance of Mr. Puneet Kumar Gupta is found satisfactory. Therefore the Board of Directors at its meeting held on May 28, 2019 has recommended the re-appointment of Mr. Puneet Kumar Gupta for a second term of 5 (five) consecutive years on the Board of the Company upto August 15, 2024 subject to the approval of shareholders in the ensuring Annual General Meeting.
- In accordance with the provisions of the Act and the Articles of Association of the Company, Mrs. Sobhag Devi Baid, Non-Executive Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re- appointment.
- Mr. Mahendra Kumar Baid (DIN: 00009828) retired by rotation and reappointed in previous AGM held July 31, 2018.
IV. ASSOCIATE COMPANIES, JOINT VENTUREAND SUBSIDIARY COMPANIES
During the year under review, there was no associate, Joint Venture and subsidiary Company.
V. DETAILS RELATING TO DEPOSITS
The Company has not accepted any deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 2014 or Chapter V of the Actand guidelines and directions of Non-Banking Financial Companies (Acceptance of Public Deposits)(Reserve Bank) Directions, 2016 as prescribed by Reserve Bank of India in this regard and as such no details are required to be furnished.
VI. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concern status and the operations of the Company in future pursuant to Rule 8 (5) (vii) of the Companies(Accounts) Rules, 2014 .
VII. INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports.
Other Disclosures required under the provisions of the Act, and Regulations, as may be applicable
1. COMMITTEE OF DIRECTORS
The Board has constituted three Committees, viz. Audit Committee, Nomination and Remuneration Committee, Stakeholder’s Relationship Committee. Other details are laid down in the Corporate Governance segment of this Annual Report.
2. PARTICULARS OF REMUNERATION OF DIRECTORS, KMP’s AND EMPLOYEES
- None of the employee of the company was in receipt of the remuneration exceeding the limits prescribed u/s 197 (12) read with rule 5, sub-rule 2 of The Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 of the Actduring the year under review. Following is the list of the employees of the Company:
- The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-section 12 of Section 197 of the Actread with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure IV.
3. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.
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.
The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19.
- Number of complaints received: NIL
- Number of complaints disposed off: NIL
4. MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion & Analysis report pursuant to Regulation 34 of Regulations is annexed herewith as Annexure V to this report.
5. CORPORATE GOVERNANCE REPORT
A report on Corporate Governance for the financial year on ended March 31, 2019 along with Statutory Auditor’s Certificate on compliance with the provisions of Corporate Governance under Regulations is annexed herewith as Annexure VI to this report.
6. MANAGING DIRECTOR AND CFO CERTIFICATE
The Managing Director and the Chief Financial Officer of the Company give annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of the Regulations. The Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2) of the Regulations. The annual certificate given by Managing Director and the Chief Financial Officer is published in this Report.
7. DISCLOSURE OF ACCOUNTING TREATMENT
The Financial Statement of the Company for FY 2018-19 have been prepared with the applicable accounting principles in India and the mandatory Accounting Standard (‘AS’) as prescribed under Section 133 of the Act read with the rules made there under.
8. REPORTING OF FRAUDS BY AUDITORS:
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and Rules framed thereunder.
9. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to sub section 3 (c) of Section 134 of the Act, the Board of Directors of the Company hereby state and confirm that:
i. in the preparation of the annual accounts for the year ended on March 31, 2019, the applicable accounting standards have been followed and there are no material departures from the same;
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 ended on March 31, 2019and of the profit and loss 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 were operating effectively; and
vi. 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.
10. VIGIL MECHANISM
In line with the provisions of Regulations, the Act, and the principles of good governance, the company has devised and implemented a vigil mechanism, in the form of ‘Whistle-Blower Policy’. Detailed information onthe Vigil Mechanism of the company is provided in the Report on the Corporate Governance which forms part of the Annual Report.
11. DISCLOSURE ON SECRETARIAL STANDARDS BY DIRECTORS
The company complies with all applicable standards issued by the Institute of Company Secretaries of India. The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
Your Board acknowledges with appreciation, the invaluable support provided by the Company’s stakeholders, auditors, advisors and business partners, all its customers for their patronage. Your Board records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Company has set for the future.
Date: May 28, 2019 FOR AND ON BEHALF OF THE BOARD
BFL ASSET FIVEST LIMITED
(Formerly known as BFL Developers Limited)
Place: Jaipur Sd/- Sd/-
SOBHAG DEVI BAID MAHENDRA KUMAR BAID
(Director) (Managing Director)