DIRECTORS’ REPORT: To The Members Sharda Capsec Limited Your Directors have great pleasure in presenting the 18th Annual Report of your Company along with the Audited Accounts for tin ended 31st March 2012. DIVIDEND In view of accumulated losses, your directors recommend no dividend. MANAGEMENT DISCUSSION AND ANALYSIS REPORT INDUSTRY STRUCTURE AND DEVELOPMENT The non-banking financial sector was considerably affected by economic slowdown presented an unenviable picture. Policy responses for helping the sector were rather inadequate. The foray of commercial banks and other NBFCs into retail loans continues to be a threat for business growth. The global financial crisis has considerably affected the Flow of foreign investments into India. Attrition level in the industry continues to be high. Retaining talented professionals is therefore a great challenge before the company. The outlook of current economic scenario is positive. Due to stiff competition with Banks, NBFCs are facing lot of challenges and threats. Those NBFCs which have sources of fund independent of banks at lower cost than that of the banks own cost of funds are in a position to grow & develop in fund based businesses. FUTURE OUTLOOK, RISK AND CONCERN While the outlook for the Indian economy continues to remain positive, the growth trajectory is likely to moderate. Rising food and commodity prices across the world, volatile financial markets and a diminished risk appetite among international investors are bound to have their impact on the Indian economy. The recent developments in the stock markets have also dampened the earlier buoyancy and optimism in the economy. Your Company's strategy, as in the past, will be to focus on profitable growth, leveraging its intimate knowledge of the market and customer relationships that have been built on a strong foundation of personalized service. OPPORTUNITIES AND THREATS NBFCs continue to face strong competition from banks and financial institutions due to comparatively low cost of funds at their disposal. The spreads in the lending business have also narrowed considerably, bringing risk adjusted margins to generally unviable levels. The Company is looking forward to opportunities in the investment as well as in the insurance sector and intends to make maximum utilization of its potential in the near future. ADEQUACY OF INTERNAL CONTROL SYSTEM The internal control system of the Company has been designed with the basic objectives of ensuring efficient use and safeguarding of resources, compliance with statutes, policies & procedures and prompt reporting of transactions. The management ensures that all regulatory guidelines are complied with at all levels. The Audit Committee, constituted by the Board reviews the adequacy of internal Control system. Besides the responsibility for implementing adequate systems and controls, the Audit Committee is also responsible for strengthening and modifying the system from time to time according to the changing requirements of the Company. FINANCIAL PERFORMANCE During the year under review, your Company has achieved total income of Rs. 279.71 lacs as Compared to Rs. 14.31 lacs in the previous year. The company has suffered the Loss for the year ended 2012 for Rs. 1.53 lacs as compared to the profit of Rs. 3.39 lacs in the previous year. The company has not transferred any profits to Statutory Reserve during the year in view of section 45IC of the Reserve Bank of India Act, 1934. SEGMENTWISE PERFORMANCE Company operates in one segment only. FIXED DEPOSITS Your Company has not accepted any fixed deposit from shareholders or public during the period under review with in the meaning of section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975. There is no unclaimed or unpaid deposit as on 31st March, 2012. DIRECTORS Presently your Board constitutes of Six (6) Directors comprising of Mr. Ashok Kumar Yadav, being non executive professional directors, Mr. vnkush Kothwani, Mr. Surinder Mehta, Mr. Rahul Anand and Mr. Rajesh Srinivas being non-executive independent director, Mr. Virender Mehta oeing executive Professional director. Pursuant to section 256 of the Companies Act of 1956 and in accordance with the Article 89 of the Article of Association of the company Mr. Ankush Kotwani Director of the company retires by rotation and being eligible for re-appointment. None of the directors of the company is Disqualified for being appointed as Director as specified in section 274(1) (g) of the Companies Act of 1956. MATERIAL CHANGES There are no material changes and commitments, affecting the financial position of the Company between the end of the financial year and the date of Directors' Report. DIRECTORS' RESPONSIBILITY STATEMENT In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, and to the best of their knowledge and belief and according to the information and explanation obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditors' Report thereon, your Directors confirm that: a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, wherever applicable; b) 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 as at March 31, 2012, and of the profit of the Company for the Year ended on that date. c) 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; and d) The Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2012 on a 'Going Concern' basis. COMPLIANCE CERTIFICATE The Company has obtained Compliance Certificate in view of Section 383A of the Companies Act, 1956 read with rule 3 of Companies (Compliance Certificate) rules, 2001 as per the amendments made in Companies (Appointment and Qualifications of Secretary) Rules, 1988 vide notification issued on 5th January 2009. AUDITORS M/s Arora Rajesh & Co., Chartered Accountants, F-42, Sector-20, Noida-201301 (G.B. NAGAR), the Auditors of your Company, who hold office until the conclusion of the ensuring Annual General Meeting, expressed their willingness to be reappointed as Auditors of your Company in the forthcoming Annual General Meeting. The observations of the Auditors in their report on accounts read with the relevant notes are self explanatory. PARTICULARS OF EMPLOYEES During the Year under review, none of the Employees of the Company was in receipt of Remuneration for the Year which was more than the limit prescribed under Sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no particulars are required to be disclosed in this Report. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION In view of the nature of activities which are being carried on by the Company, Rule 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy and technology absorption respectively, are not applicable to the Company. FOREIGN EXCHANGE INCOME/OUTFLOW There has been no foreign exchange income/outflow during the year under review. CORPORATE GOVERNANCE REPORT In terms of Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance forms part of the Annual Report. A Certificate from Statutory Auditors confirming the conditions on compliance as mentioned under Clause 49 of the Listing Agreement is given as Annexure to the Corporate Governance Report. ACKNOWLEDGEMENT Your Directors would like to place their grateful appreciation for the assistance and co-operation received from the Company's bankers, stakeholders etc. The Directors also acknowledge with appreciation the support and co-operation rendered by various Govt. agencies and Departments. Your Directors would also wish to place on record their deep sense of appreciation for the continued support of all the investors of the Company. We look forward to your continued support in the future. For and on behalf of the Board of Directors Virender Pal Mehta Chairman Place: New Delhi Dated: 01.09.2012 |