BOARD'S REPORT TO THE MEMBERS OF THE FIRST CUSTODIAN FUND (INDIA) LIMITED The Directors take pleasure in presenting the Twenty Ninth Annual Report together with the audited financial statements for the year ended 31st March, 2015. 2. HIGHLIGHTS OF PERFORMANCE • Total income for the year decreased by 20.76% to Rs. 34.40 Lakhs as compared to Rs. 43.41 Lakhs in 2014. • Total profit before tax for the year was Rs. 0.39 Lakhs as compared to Rs. 14.04 Lakhs in 2014. 3. BUSINESS OPERATIONS The Company has earned Rs.34.40 Lacs from operations. The Company hopes to achieve good result, barring unforeseen circumstances. 4. DIVIDEND With a view to deploy the profits into the existing operations of the company, Board of Directors has not recommended any dividend for the year. 5. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 1,50,00,000/-. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, the Directors of the Company hold the equity shares of the Company as follows: 6. FINANCE The Company continues to focus onjudicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. 6.1 DEPOSITS The Company has not accepted deposit from the public and shareholders falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. 6.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 7. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company. 8. BUSINESS RISK MANAGEMENT The nature of business is investment, arbitrage and trading in shares. The inheritant risk to the business of the company is as follows: a. Monetary Policy of the Country b. Interest Rate Cycle c. Fluctuation in crude oil and commodity prices d. Changes in Government policies e. Status of Indian & World Economy The nature of risk is dynamic of business and entrepreneurship. The Company has not formed Risk Management Committee and considered it as optional item as prescribed under Clause 49 of Listing Agreement. 9. 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 (IA) function is defined in the Internal Audit Charter. The Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. 10. SUBSIDIARY COMPANIES The Company has no Subsidiary Company. 11. DIRECTORS In terms of the Articles of Association of the Company, Mr. Sushil Mantri, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Company at its Board meeting held on 29th May, 2015 has appointed Mr. Manish R Banthia as Executive Director of the Company w.e.f. 1st September, 2015. The necessary item has been included at item no. 4 of the notice. 12. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been 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) that 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) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 13. RELATED PARTY TRANSACTIONS During the year the company has not entered into any related party transactions except payment of remuneration and sitting fees to the directors. 14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. 15. AUDITORS 15.1 Statutory Auditors The Company's Auditors, M/s Paresh D. Shah & Co., Chartered Accountants, Mumbai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. 15.2 Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s P. P. Shah & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure A". 15.3 Qualifications in Secretarial Audit Report A. Appointment of Company Secretary & Chief Financial Officer: As per section 203(1 & (iii), the Company is required to appoint Company Secretary, & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer. In this regard the management of the Company has provided the following reply: i) The Company has appointed Mr. Chandrakant Pandey as Compliance Officer of the Company who looks after the compliance of Companies Act, 2013, Listing Agreement and SEBI Act and rules made thereunder; ii) The Company has availed the services of Practising Company Secretary for advising on compliance of Companies Act, 2013 and SEBI Act and rules made thereunder; iii) The Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary. B. Constitution of Nomination and Remuneration Committee: As per section 178, the Company is required to constitute Nomination and Remuneration Committee. The Company has not constituted Nomination and Remuneration Committee. In this regard the management of the Company has provided the following reply: a. The Volume and Nature of business is very small. The Company does not have the function of Nomination and Remuneration Committee. C. Appointment of Internal Auditor: As per section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor. In this regard the management of the Company has provided the following reply: i) The size of operation of the Company is very small, it is not viable to appoint Internal Auditor but the Company has establish the internal control system D. Independent Director and Woman Director: As per section 149 of the Companies Act, 2013, the Company is required to appoint Independent Director including Woman Director. The Company has not appointed Independent Director including Woman Director. Accordingly, the Company has also not constituted Audit Committee. In this regard the management of the Company has provided the following reply: a) The Volume and Nature of business is very small. Therefore, it is not viable to appoint Independent Director, Woman Director and constitute Audit Committee. 16. ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 17. CORPORATE GOVERNANCE SEBI vide its circular no. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 had amended Clause 49 and made it applicable to all the listed Companies. Further, SEBI vide its circular no. CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 had made the Clause 49 on Corporate Governance non-mandatory to the following class of Companies: a. Companies having paid up equity share capital not exceeding Rs.10 crores and Net worth not exceeding Rs.25 crores, as on the last day of the previous financial year; Provided that where the provisions of Clause 49 becomes applicable to a company at a later date, such company shall comply with the requirements of Clause 49 within six months from the date on which the provisions became applicable to the company. b. Companies whose equity share capital is listed exclusively on the SME and SME-ITP Platforms. The paid up share capital of the Company is Rs. 1.5 crores as on 31st March, 2015. The reserve and surplus is Rs. 8.32 crores. Accordingly the paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause. The Company has decided not to opt for compliance of Clause 49 for the time being, which the Company has already intimated to the BSE. 18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is as under. A. Conservation of Energy The Company is not engaged in any manufacturing activity. Hence, the Company has not taken any energy conservation measures. There are no additional investments and proposals, for reduction of consumption of energy. The Company does not fall within the category of list of industries mentioned in Schedule forming part of the rules. Hence, no disclosures are required to be given. B. Technology absorption, adaptation and innovation The Company has not deployed any Research and Development facility or absorbed any technology. Hence, no disclosures are required to be given. 19. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure B". 20. PARTICULARS OF EMPLOYEES There is no employee in the Company drawing monthly remuneration of Rs.5,00,000/- per month or Rs.60,00,000/- per annum. Hence the Company is not required to disclose any information as per Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 21. REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES No Directors/ Key Managerial Personnel are drawing any remuneration. Hence, the information required pursuant to Section 197 read with Rule 5 (1) (i) of The Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial year is not given. 22. ACKNOWLEDGEMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. 23. CAUTIONARY STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. For and on behalf of the Board of Directors (Sushil Mantri) Director (Manish Banthia) Director Place : Mumbai Date: 29th May, 2015 |