To, The Members,
Latent Light Finance Limited
(Formerly Known as Galaxy Commercial Limited)
Your directors have pleasure in presenting their 35th Annual Report together
with the Audited Statement of Accounts for the year ended on 31st March 2020.
1. FINANCIAL RESULTS
(Amount in Lakhs)
Particulars |
For the financial year 2019-20 |
For the financial year 2018-19 |
GrossTotal Income |
290.588 |
159.471 |
Less: Total Expenditures |
74.720 |
63.476 |
Net Profit before tax |
215.868 |
95.995 |
Less: Tax Expenses |
|
|
- Income Tax-Current |
13.474 |
26.725 |
- Income Tax- Earlier Year |
(7.219) |
0 |
- Deferred Tax |
(21.233) |
0.575 |
- MAT Credit Availed |
- |
1.476 |
Profit after tax |
230.847 |
67.218 |
Provision for transfer to Special Reserve Fund |
46.169 |
8.636 |
In order to comply with the provisions of Reserve Bank of India Act, 1934 the Company
has transferred Rs. 46.169 Lakhs to Special Reserve Funds and has also made provision of
Rs. 3.0305 lakhsfor Standard Assets during the year under review.
Except as mentioned above, no amount was proposed to transfer to any reserve by the
Company during the year under review.
2. COVID-19
The beginning of 2020 has witnessed the world wide spread of COVID-19 pandemic, Global
threat from COVID-19 is continuing to grow and at a rapidly accelerating rate. Authorities
in most of countries announced lockdowns causing deep economic harm and could reverse the
gains made in the industrial economy over many decades. Around the world, these
coronavirus lockdowns have driven professional and social life out of the physical world
and into the virtual realm. Industry members are reeling under severe financial stress and
are in urgent need of ample liquidity to ensure business continuity. We are hopeful that
the government will introduce more series of measures in quick succession to support
demand to ensure business continuity. The economic fallouts of this is still difficult to
assess as the situation is still evolving. In India, the economic impact of COVID-19 is
trickling in on the backdrop of an already challenging macroeconomic environment.
3. OPERATIONS OF THE COMPANY
During the year under review, the Company was engaged in carrying on the business as
Non Banking Financial Company without accepting public deposit for which the Certificate
of Registration has been obtained from the Department of Non-Banking Supervision, Reserve
Bank of India, New Delhi. The Company has provided / taken inter-corporate loans in
ordinary course of business and on arm length basis. Your directors also intend to
diversify its operation into another area / business in order to make the Company more
profitable.
4. PERFORMANCE REVIEW
During the year under review, the Company's total turnover is Rs. 290.588 lakhs as
compared to Rs. 159.471 lakhs in the previous year and the Company earned a profit after
tax of Rs. 230.847 Lakhs as compared to Rs. 67.218 Lakhs in the previous year
5. DIVIDEND
Your directors do not recommend any dividend for payment to the shareholders/ members
of the Company for the financial year ended on 31st March, 2020.
6. DIRECTORS AND KMP OF THE COMPANY
Pursuant to the provisions of section 149 of the Act, Mr. Virendra Singh Chowhan, and
Ms. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted a
declaration that each of them meets the criteria of independence as provided in section
149(6) of the Act and there has been no change in the circumstances which may affect their
status as independent director during the year.
During the year under review, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company, other than the sitting fees,
commission and reimbursement of expenses incurred by them for the purpose of attending
meetings of the Company.
Mr. Deepak Nagar, Director of the Company retires by rotation and being eligible, has
offered himself for reappointment. Your Directors recommend his re-appointment as director
of the Company.
As required under regulation 36(3) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the information on the particulars of the Directors
proposed for appointment / re-appointment has been given in the Notice of the Annual
General Meeting.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, 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 Committee, Nomination and Remuneration Committee..
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee
framed a policy for selection and appointment of directors senior management and to fix
their remuneration.
7. KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 203 of the Act, the key managerial personnel of
the Company are - Mr. Dharmender Singhal, Chief Financial Officer, Mr. Kapil Singhal,
Chief Executive Officer and Mr. Yash Gupta, Company Secretary of the Company.
8. DECLARATION OF INDEPENDENCE:
Pursuant to the provisions of section 149 of the Act, Mr. Virendra Singh Chowhan, and
Ms. Sangeeta Bhardwaj are the independent directors of the Company. They have submitted a
declaration that each of them meets the criteria of independence as provided in section
149(6) of the Act and there has been no change in the circumstances which may affect their
status as independent director during the year. . Further, none of the directors of your
Company are disqualified under the provisions of Section 164 (2) (a) & (b) of the
Companies Act, 2013.
During the year under review, the Independent Directors of the Company had no pecuniary
relationship or transactions with the Company, other than the sitting fees, commission and
reimbursement of expenses incurred by them for the purpose of attending meetings of the
Company.
As required under regulation 36(3) of SEBI (LODR) Regulations, 2015, the information on
the particulars of the Directors proposed for appointment / re- appointment has been given
in the Notice of the Annual General Meeting.
9. RETIREMENT BY ROTATION OF THE DIRECTORS
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Mr. Deepak Nagar, Non-Executive Director of the Company, is
liable to retire by rotation at the ensuing Annual General Meeting and has tendered his
willingness to be re-appointed as the director of the Company and therefore shall
reappointed at the ensuing Annual General Meeting. The matter has been placed for noting
by members at the ensuing Annual General Meeting, details of which are given in the Notice
of Annual General Meeting.
10. MEETINGS
During the year under review Nine (9) Board Meetings were convened and held. The
intervening gap between the Board meetings was within the period prescribed under the
Companies Act, 2013.
11. COMMITTEES OF THE BOARD
Currently, the Company has Two Committees, as indicated below:
i) Audit Committee;
ii) Nomination and Remuneration Committee;
12. DEMATERIALISATION OF SHARES
The Company has connectivity with NSDL & CDSL for dematerialization of its equity
shares. The ISIN No. INE515K01018 has been allotted for the Company. Therefore, the
investors may keep their shareholding in the electronic mode with their Depository
Participates.
As on 31st March, 2020, only 78% (Approx) of the Company's paid up Equity
Share Capital is in dematerialized form and balance 22 % (Approx) is in physical form. The
Company's Registrars & Transfer Agent is M/s Indus Portfolio Private Limited, having
their communication office at G-65, Bali Nagar, New Delhi-110015.
13. NOMINATION AND REMUNERATION POLICY
The Company has devised a policy on Nomination, Remuneration and Board Diversity
including criteria for determining qualifications, positive attributes, independence of a
director and other matters specified under the provisions of Section 178 of the Companies
Act, 2013. The Policy also includes the criteria for nomination, appointment and removal
of Directors, Key Managerial Personnels (KMPs) and Senior Management and to fix their
remuneration. No change in the policy since the last financial year.
14. AUDIT COMMITTEE
During the year all the recommendations of the Audit Committee were accepted by the
Board. The composition of the Audit Committee is given in the General Information about
the company which forms part of the Annual Report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under regulation 34 of SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015, the Management Discussion and Analysis Report is enclosed
as a part of this report.
16. DIRECTORS 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 in the
preparation of the Financial Statement for the financial year ended on 31st
March, 2020 and state:
i) That in the preparation of Annual Accounts for the financial year ended as at 31st
March, 2020, the applicable Accounting Standards have been followed along with proper
explanation relating to the material departures.
ii) That the Directors have selected such Accounting Policies and applied them
consistently and made judgements 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 financial year
ended as at 31st March, 2020 and of the profit and loss of the Company for the
financial year ended on 31st March, 2020.
iii) That 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 or other irregularities.
iv) That 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.
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory and
secretarial auditors and external consultants, including audit of internal financial
controls over financial reporting by the statutory auditors, and the reviews performed by
management and the relevant board committees, including the audit committee, the board is
of the opinion that the Company's internal financial controls were adequate and effective
during financial year 2019-20.
17. PUBLIC DEPOSITS
The Company has not invited or accepted any public deposits within the meaning of
Section 73 of the Companies Act, 2013 and the rules made thereunder and section 45-I(bb)
of the Reserve Bank of India Act, 1934 during the year under review. The Company does not
hold any public deposit as on date and will not accept the same in future without the
prior approval of Reserve Bank of India in writing.
18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company, being a non-banking finance company registered with the Reserve Bank of
India and engaged in the business of giving loans or finance & investment activities,
is exempt from complying with the provisions of section 186 of the Companies Act, 2013.
Accordingly, the disclosures of the loans given as required under the aforesaid section
have not been given in this Report.
19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of internal control geared towards achieving
efficiency in its operations, safeguarding assets, optimum utilization of resources and
compliance with statutory regulations. The Company has an Internal Control System,
commensurate with the size, scale and complexity of its operations. Testing of such
Internal Control measures and systems forms a part of Internal Audit function. The
Internal Auditors of the Company conduct audits of various departments based on an annual
audit plan covering key areas of operations. Internal Audit reviews and evaluates the
adequacy and effectiveness of internal controls, ensuring adherence to operating
guidelines and systems and recommending improvements for strengthening them. To maintain
its objectivity and independence, the Internal Audit function reports to the Chairman of
the Audit Committee of the Board. The Audit Committee of the Board of Directors reviews
the adequacy of internal controls. This has improved the management of the affairs of the
Company and strengthened transparency and accountability. The Management ensures adherence
to all internal control policies and procedures as well as compliance with regulatory
guidelines. No significant audit observations and recommendations have been received from
the Internal Auditors of the Company.
20. SECRETARIAL AUDIT REPORT
The Company has, at its meeting held on 14th August, 2019. appointed M/s
Naveen Garg & Associates,, a firm of Company Secretaries in practice to undertake
the Secretarial Audit of the Company for the financial year 2019-20 in terms of provisions
of section 204 of the Companies Act 2013 read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. Report of the Secretarial Auditor for
the Financial ended 31st March, 2020 is attached as an annexure as Annexure
"A" which forms part of this report.
Further the statutory auditors' report and secretarial auditors' report does not
contain any qualifications, reservations or adverse remarks.
21. AUDITORS
a) STATUTORY AUDITORS:
Therefore, pursuant to Section 139, 142 and other applicable provisions of the
Companies Act, 2013 and the Rules made thereunder, , M/s Divyank Khullar &
Associates, Chartered Accountants, New Delhi (Firm Regn. No.:- 025755N) was be
appointed as Statutory Auditors of the Company in the 32nd AGM held in year
2017, From the date of conclusion of the 32nd AGM of the Company till the date
of conclusion of 37th Annual General Meeting to be held for the financial year
ending on 31st March 2022.
As amendment notified under Section 40 of Companies Amendment Act, 2017 correspondence
to Section 139 of Companies Act, 2013, now the requirement related to annual ratification
of appointment of auditors by members is omitted, so ratification of auditor in Annual
General Meeting not required. Your Company has not received any unwillingness to Continue
as auditor, so M/s Divyank Khullar & Associates will continue as auditor.
b) SECRETARIAL AUDITORS:
Pursuant to the provisions of section 204 of the Companies Act 2013 read with rule the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company
has, at its meeting held on 01st September, 2020 appointed M/s Naveen Garg
& Associates, a firm of Company Secretaries in practice to undertake the
Secretarial Audit of the Company for the financial year 2020-21.
c) INTERNAL AUDITOR:
The Board of Directors has, at its meeting held on 01st September, 2020
appointed M/s. P B & CO., (FRN: 031984N) Chartered Accountants, as the Internal
Auditor to undertake Internal Audit of the Company for Financial Year 2020-21 in terms of
provisions of section 138 of the Companies Act, 2013
22. 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".
23. RELATED PARTY TRANSACTIONS
During the year under review, the main business of the company is financing &
investment in shares and granting inter-corporate loans. All related party transactions
entered into with related parties were placed before the Audit Committee for their
approval at commencement of the financial year. The audit committee decided that such
transactions are in the ordinary course of business and are on arm's length basis. None of
the transactions with related parties fall under the scope of section 188(1) of the
Companies Act, 2013. Even though the provisions of Companies Act, 2013 read with rules
made thereunder regarding related party transactions are not attracted to such
transactions as these are in ordinary course of business and on an arm's length basis, but
some transactions were material related party transaction by virtue of SEBI (LODR)
Regulations, 2015. All related party transactions so entered are disclosed in Financial
Statement of the Company as attached herewith. Given that the company does not have
anything to report pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with
Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2, therefore the same is not
provided.
The details of the transactions with related parties during the financial year 2019-20
are provided in the accompanying financial statements.
24. 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 lays down the standard procedure of business conduct which is expected to be
followed by the Directors and the designated employees in their business dealings and in
particular on matters relating to integrity in the work place, in business practices and
in dealing with stakeholders. All the Board Members and the Senior Management personnel
have confirmed compliance with the Code.
25. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read
with the rules made thereunder and pursuant to the provision of SEBI (Listing Obligations
and Disclosure Requirements), 2015, the Company has established a Vigil Mechanism to be
known as the Whistle Blower Policy' for its Directors and Employees, to report
instances of unethical behaviour, actual or suspected, fraud or violation of the Company's
Code of Conduct. The aim of the policy is to provide adequate safeguards against
victimization of Whistle Blower who avails of the mechanism and also provide direct access
to the Chairman of the Audit Committee, in appropriate or exceptional cases.
Accordingly, Vigil Mechanism / Whistle Blower Policy have been formulated with a view
to provide a mechanism for the Directors and employees of the Company to approach the
Ethics Officer or the Chairman of the Audit Committee of the Company.
The purpose of this policy is to provide a framework to promote responsible and secure
whistle blowing. It protects employees willing to raise a concern about serious
irregularities within the Company.
During the financial year 2019-20, no such complaint of unethical or improper activity
has been received by the Company
26. RISK MANAGEMENT
The company operates in the Financial Services Sector, which is affected by variety
factors linked to economic development in India and globally which, in turn, also affected
global fund flows. Any economic event across the globe can have direct or indirect impact
on your company. To mitigate this, Company has diversified its revenue stream across
multiple verticals. Your Company's risk management system is a comprehensive and
integrated framework comprising structured reporting and stringent controls. Through its
approach it strives to identify opportunities that enhance organizational values while
managing or mitigating risks that can adversely impact the company's future performance.
Within the organization, every decision taken is after weighing the pros and cons of such
a decision making taking note of the risk attributable.
The Board of Directors of the Company has framed and implemented a Risk Management
framework depicting the process for loan proposal approval, loan management post
disbursement and day to day monitoring to manage credit risk. It sets out the standards
helpful in achieving a high-quality loan portfolio with optimal returns.
27. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view
to regulate trading in securities by the Directors and designated employees of the
Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits
the purchase or sale of Company shares by the Directors and the designated employees while
in possession of unpublished price sensitive information in relation to the Company and
during the period when the trading window is closed. The Board is responsible for
implementation of the Code. All Board of Directors and the designated employees have
confirmed compliance with the Code.
28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS AND OUTGO
During the year under review, the provisions of Section 134(3)(m) of the Companies Act,
2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are as follows:
Conservation of Energy
Your Company carries out its business in an environmental friendly manner and is on the
look-out for different ways and means to reduce the consumption of energy in its business
activity.
Technology Absorption, Adaption and Innovation
The Company continues to use the latest technologies for improving quality of its
services. The Company's business does not require significant import of technology.
Foreign Exchange Earnings and Outgo
There was no foreign exchange earnings and outgo in the Company during the financial
year.
29. MATERIAL CHANGES AND COMMITMENTS, IF ANY
There was no material changes and commitments affecting the financial position of the
company which have occurred between the end of the financial year of the Company to which
the financial statements relate and the date of the report;
30. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of the
Companies Act, 2013 to the Board of Directors during the year under review
31. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review, provision of section 135 and Schedule VII of the
Companies Act, 2013 pertaining to Corporate Social Responsibility are not applicable to
our Company. Hence, details of expenditures on CSR activities are not required to be
furnished.
32. CREDIT RATING
There was no credit rating obtained from any agency during the period under review.
33. LISTING OF SECURITIES
Presently, the Securities of the Company are listed on BSE Limited, Mumbai. The listing
fee for the financial year 2020-21 has been paid.
34. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013:
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. Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed-off
during the year 2019-20.
No of complaints received |
: 0 |
No of complaints disposed off |
: N.A. |
35. ACKNOWLEDGEMENTS
Your directors would like to place their grateful appreciation for the assistance and
co-operation received from the Company's bankers during the year under review. The
directors also acknowledge with appreciation the support and co-operation rendered by
various Government 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.
|