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SPS Finquest

BSE: 538402|ISIN: INE502O01018|SECTOR: Finance - Leasing & Hire Purchase
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Directors Report Year End : Mar '18    Mar 16

To,

The Members,

The Directors are pleased to present their 22nd Annual Report on the business and operations of the Company together with the audited Statements of the accounts for the year ended on March 31, 2018.

SUMMARY OF FINANCIAL PERFORMANCE: (Amount in Rs. Lacs)

Year Ended 31-03-18

Year Ended 31-03-17

Total Revenue

42.74

730.52

Less: Expenses

130.09

71.41

Profit /(Loss) before Depreciation, Amortisation and Tax

(87.35)

659.11

Less : Depreciation, Amortisation

0.39

0.63

Profit Before tax

(87.74)

658.47

Less : Current Tax

47.25

183.43

Less : Deffered Tax

(88.23)

(0.93)

Short/(Excess) Provision for tax for earlier years

(39.67)

(0.56)

Profit/(Loss) After Tax

(7.09)

476.53

DIVIDEND:

Considering the loss, your Directors have not recommended any dividend.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge, confirm that -

a) in the preparation of the accounts the applicable accounting standards have been followed along with proper explanations relating to material departure;

b) appropriate accounting policies have been selected and applied consistently and have 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 loss of the Company for that period;

c) proper and sufficient care has been taken for 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;

d) the annual accounts have been prepared on a going concern basis;

e) they 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

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALSYIS

To avoid duplication of certain information in Directors’ Report and Management Discussion & Analysis, the Board of Directors of your Company has presented the composite summary of performance and functions of the Company.

INDUSTRY STRUCTURE AND DEVELOPMENT:

Your Company is Non-banking Finance Company mainly engaged in the stock financing and providing inter-corporate loans. NBFCs are strictly regulated by Reserve Bank of India by its guidelines and notifications.

GDP grew at 6.7% in the year 2017-2018 compared to 7.1% in the previous year 2016-17. The decline in growth was due to lackluster performance in the first quarter of 2017-18, when the producers undertook destocking activities with the implementation of the GST. However, improvement was witnessed in the last three quarters after waning of disruption post implementation of the GST. The gross fixed capital formation (GFCF) as a percentage of GDP remained stagnant at 28.5% since 2015-16. However, there has been an improvement in quarter 3 and quarter 4 in the investment rate. It is good to note that India rose 30 places in the World Bank’s Ease of Doing Business ranking in 2017 to rank 100th in recognition of the Government’s efforts to streamline the economy through reforms in taxation, licensing, investor protection and bankruptcy resolution and is poised to improve further.

REGULATIONS

The Capital Market is regulated by stringent rules and regulations of the Securities & Exchange Board of India (SEBI) and the stock exchanges. The Company, being registered with the Reserve Bank of India as Non-Banking Finance Company (NBFC), is also subjected to strict rules and guidelines notified by the Reserve Bank of India from time to time. Your Company is committed to the best Corporate Governance practices based on conscience, openness, fairness, transparency, compliances and ethical practices towards attaining performance with integrity and accountability thereby paving the way for enhanced investors’ and stakeholders’ confidence. Thus, ensuring long term success.

PERFORMANCE

Total revenue including other operating income for the financial year ended 31st March, 2018 was Rs.42,73,552/- as against Rs.7,30,51,879/- in the previous year. The Company incurred a loss of Rs.87,73,528/- as against a pre-tax profit of Rs.6,58,47,397/- a year ago. After providing for income-tax liability and adjusting the deferred tax assets as also provisions for tax of earlier years, there remains a loss of Rs.7,09,386/-.

Your Directors do not propose to transfer any amount to general reserve or to Reserve Fund in terms of Section 45 IC(1) of RBI Act, 1934.

MATERIAL CHANGES AND COMMITMENT

There have been no material change and commitment affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of this report.

OPPORTUNITY AND THREATS

India is expected to remain the world’s fastest growing economy with the real GDP growth at 7.4 percent and 7.5% in 2018-19 and 2019-20 respectively. Economy is rebounding after the transitory negative impact of demonatisation and GST. As per National Council for Applied Economic Research, implementation of a comprehensive GST would provide gains to India’s GDP in the range of 0.9 to 1.7per cent. However, the economy is facing a number of headwinds like non-performing assets of the banking system, elevated bond yields, increased trade protectionism, elevated global oil price and currency depreciation. High oil price need to be taken as an opportunity to boost domestic production by addressing exogenous bottlenecks.

FUTURE OUTLOOK:

As per the World Bank’s report, the India’s economy is expected to grow by 7.5% in financial year 201819 and 7.5% in 2019-20. These expectations are mainly due to increased capital outlay on infrastructure by government and improved investment climate. India continues to be one of the fastest growing economies in the world in spite of demonetization. Indian economy is on a strong growth trajectory. Your Directors feel all these will augur well for the economy in general and your Company in particular in medium to long term.

SUBSIDIARY:

The Company does not have any subsidiary company.

CONSOLIDATED FINANCIAL STATEMENT:

Since the Company does not have any subsidiary company or associate or joint venture, consolidated financial statements are not prepared.

CORPORATE GOVERNANCE:

Provisions of para C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 are not applicable to your Company. Hence, report on Corporate Governance is not annexed.

LOANS, GUARANTEE AND INVESTMENT:

Particulars of loans and investments made by the Company pursuant to Section 186 of the Companies Act, 2013 are given in the notes to the Financial Accounts, which forms part of the Annual Report. The Company has not given any guarantee.

PUBLIC DEPOSIT:

Your Company has not accepted any deposits from the public, its shareholders or employees during the year under review.

TRANSACTION WITH RELATED PARTIES:

All the transactions with related parties entered into during the financial year 2017-2018 were on arm’s length basis and also in the ordinary course of business. Details of all related party transactions are placed before the audit committee. The policy on related party transactions as approved by the Board of Directors is placed on the Company’s website.

Since all the transactions with the related parties entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable.

CONSERVATION OF ENERGY, ETC.

Since your Company is not engaged in any manufacturing activity, information as required under the provisions of Section 143(3)(m) of the Act is not furnished. During the year, the Company neither earned nor spent any foreign exchange.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

To comply with the Articles of Association of the Company and the Companies Act, 2013, Mr. Sandeep P. Shah (DIN: 00368350) shall retire by rotation in the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

During the year under review, none of the non-executive directors had any pecuniary relationship or transactions with the Company.

The Company has the following personnel as the Key Managerial Personnel (KMP) under Section 203 of the Companies Act, 2013:

1. Mr. Girish Jajoo, Managing Director

2. Mr. Subhash R. Yadav, Chief Financial Officer

3. Mrs. Pinal Daiji, Company Secretary.

DISCLOSURE BY INDEPENDENT DIRECTORS

All the Independent Directors have furnished declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013.

AUDIT COMMITTEE

The Committee presently comprises of Ms. Ankita M. Shah, Independent Director, Ms. Payal Shah, Independent Directors and Mr. Girish Jajoo. All the members of the Committee are having financial and accounting knowledge. The Committee met 4 times during the financial year 2017-18.

NOMINATION & REMUNERATION COMMITTEE/POLICY

The said Committee presently comprises of Ms. Ankita Shah and Mr. Priyesh Jhaveri. The Committee met once during the financial year.

The Nomination and Remuneration Policy recommended by the Nomination & Remuneration Committee is duly approved and adopted by the Board of Directors. The said policy is annexed to the report as Annexure 1.

STAKEHOLDER RELATIONSHIP COMMITTEE

The Stakeholder Relationship Committee consists of three members viz. Mr. Sandeep Shah, Chairman, Ms. Ankita Shah and Mr. Girish Jajoo as its members. The Committee mainly looks into redressal of shareholders and investors grievances with respect to transfer of shares, dematerialization of shares, nonreceipt of annual report or declared dividend, etc. The shareholders grievances committee met four times during the year. During the year ended 31st March, 2018, the Company did not receive any complaint from any of its members.

BOARD MEETINGS

Seven meetings of the Board were held during the year under review. One meeting of the Independent Directors was also held during the year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 the Board of Directors had done the annual evaluation of its own performance, its committees and individual directors. The Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of criteria such as the contribution of the individual director to the Board and committee meetings.

CSR COMMITTEE

The Company does not fulfill any of the three criteria specified in Section 135(1) of the Companies Act, 2013 and as such is not required to comply with the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014.

INTERNAL CONTROL SYSTEM

Adequate internal control systems are in place to maintain quality of product, proper accounting as per norms and standards prescribed, asset maintenance and its proper use. The Company has an independent internal auditor, who periodically reviews the accounts and reports to the Audit Committee.

RISK MANAGEMENT

The management continuously access the risk involved in the business and all out efforts are made to mitigate the risk with appropriate action. All the assets of the Company are adequately covered by comprehensive insurance.

EMPLOYEE:

Relations between the management and employees were cordial through-out the year.

The particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as annexure 2 and forms part of this report.

Information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Management Personnel) Rule, 2014, and forming part of Directors’ Report for the year ended 31st March, 2018 is given in a separate annexure to this report. The said annexure is not being sent alongwith this report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Members, who are interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by the members at the registered office of the Company, 21 days before the 22nd annual general meeting and up to the date of the said annual general meeting during normal business hours on working days.

AUDITORS

According to Directors, there is no adverse remarks made by Statutory Auditors in their report. Notes to the accounts are self explanatory to comments/observation made by the auditors in their report. Hence, no separate explanation is given.

M/s. Kochar & Associates, Chartered Accountants, Statutory Auditors of your Company, were appointed as Statutory Auditors by the members of the Company in their 21st Annual General Meeting held on 26th September, 2017 for consecutive five years.

During the year, Secretarial Audit was carried out by Mr. Upendra C. Shukla, Practicing Company Secretary for the financial year 2017-18. The report on the Secretarial Audit is appended as Annexure 3 to this report. According to the Board of Directors the report does not have any adverse remark.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

No such order was passed by any of the authorities, which impacts the going concern status and company’s operations in future.

EXTRACT OF ANNUAL RETURN

An extract of Annual Return in Form MGT-9 in pursuance to the provisions of Section 92(3) of the Companies Act, 2013 is annexed to this report as Annexure 4 and forms part of this report.

VIGIL MECHANISM

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement. The whistle blower policy is adopted by the Board of Directors and is hosted on the website of the Company.

FRAUD REPORTING

During the year, no fraud whether actual, suspected or alleged was reported to the Board of Directors. PREVENTION OF SEXUAL HARRASSMENT AT WORKPLACE

Since the Company does not have any woman employee, the provisions of the ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act are not applicable.

CAUTIONARY STATEMENT

Statements in the Annual Report, particularly those which relate to Management Discussion and Analysis may constitute forward looking statements within the meaning of applicable laws and regulations. Although the expectations are based on the reasonable assumption, the actual results might differ.

ACKNOWLEDGEMENT

The Directors wish to place on record their deep sense of appreciation to the Company’s Bankers and all the staff members for their unstinted support. Your directors also wish to thank the shareholders for confidence reposed in the management of the Company.

For and on behalf of the Board

Pramod Shah

Mumbai, Chairman

May 30, 2018 DIN : 00685016

Source : Dion Global Solutions Limited
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