Your Directors have pleasure in presenting their Twenty Fifth Annual Report and theAudited Statements of Accounts for the financial year ended March 31 2019.
|Financial Highlights: || || |
|Particulars ||Year Ended March 31 2019 ||Year Ended March 31 2018 |
| ||(र) ||(र) |
|Gross Income for the year ||50995151 ||34437921 |
|Total Expenditure before Depreciation and Tax ||61773033 ||38504389 |
|Profit /(Loss) before Depreciation and Tax ||(10777882) ||(4066468) |
|Less: Depreciation ||311672 ||235841 |
|Profit /(Loss) after Depreciation and Tax ||(11089554) ||(4302309) |
|Tax Provisions for Earlier Years ||(4840946) ||670131 |
|Other Comprehensive Income for the year ||(638785) ||(65344) |
|Balance brought forward from previous year ||(37280439) ||(33582917) |
|Profit /(Loss) available for Appropriation ||(53849723) ||(37280439) |
|Balance carried to Balance Sheet ||(53849723) ||(37280439) |
In the absence of profits your Directors do not recommend payment of any dividend forthe Financial Year 2018-2019.
State of Company's Affairs:
Some highlights of your Company's performance during the year under review are:
The gross loss (before depreciation and tax) for the year was र10777882/-as against र 4066468/- during the last year.
Net loss after taxation for the year was र 16569285/- as against र3697521/- in the last year.
The total asset under management was र128.14 Crore as against र 42.72Crore in the last year.
Shriram Hybrid Equity Fund launched in November 2013 delivered return of 10.32% (atthe end of March 2019 on a CAGR basis) since inception accompanied by lower levels ofvolatility. Two more funds have been launched by your Company during FY 2018-19Shriram Multicap Fund and Shriram Long Term Equity Fund.
Mutual fund industry continued to support the market infusing र 87879 croresinto equities during FY19 which was however lower than र 132774 crores in FY18. Thesteep correction in mid and small cap stocks the IL&FS crisis led tight liquidityconditions for the NBFC space perhaps led to comparatively lower inflow & investmentsby mutual funds into equities.
However the buoyancy of mutual fund investment can be gauged by the massive increasein contributions through Systematic Investment Plan (SIPs). The contribution of SIP stoodat र 92693 crores in FY19 up 38% even in a volatile equity market 9.13 lakh SIPaccounts were added on an average each month during the financial year with an average SIPsize of about र 3070 per account taking the total number of SIP accounts to about2.62 crores in FY19. Rising awareness about mutual funds through various initiatives andcampaigns like Mutual Funds Sahi Hai' has bolstered investor sentiment about thebenefits of SIPs. Despite a volatile equity market and several headwinds Average AssetsUnder Management (AAUM) of Indian Mutual Fund Industry at the end of March 2019 grew 7% toर 24.58 crores.
In view of the strong potential of Indian equities and considering the prevailingmarket scenario the Company is also in the process of finalizing and filing new schemesthat have a complementary objective to our existing offering and address the need of lowerrisk adjusted stable returns from the idle funds of investors without compromisingliquidity.
Nature of Business:
There was no change in the nature of the business.
The total Paid up Share Capital as on March 31 2019 was र 55 Crores comprising of60 Lakhs Equity Shares of र 10/- each and 49 Lakhs Redeemable Non-ConvertiblePreference Shares of र 100/- each.
Material Changes and Commitments:
No material changes or commitments affecting the financial position of the Company havetaken place from March 31 2019 till the date of this report.
Particulars of Loans Guarantees or Investments:
The details of the Investments and Loans covered under the provisions of Section 186 ofthe Act are given in the notes to the financial statements.
Cash Flow Statement:
The Cash Flow statement for the year 2018-2019 is attached to the Balance Sheet.
In accordance with the provisions of the Companies Act 2013 ("the Act") andin terms of the Memorandum and Articles of Association of the Company Mrs. JayashreeMahesh retires by rotation at the ensuing AGM and being eligible offers herself forreappointment.
Further Nomination and Remuneration Committee on the basis of performance evaluationof Independent Directors has recommended to the Board that the continued association ofMr. Arindom Mukherjee as Independent Director of the Company would be beneficial to theCompany. Based on the above the Board recommends the re-appointment of Mr. Mukherjee asIndependent Director of the Company not liable to retire by rotation to hold office fora second term of 5 (five) consecutive years i.e. up to June 06 2024.
Necessary proposals for reappointment of the aforesaid Directors have been included inthe notice convening the AGM and the respective Resolutions are recommended for yourapproval.
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 hereinafter referred to as Listing Regulations'. Inthe opinion of the Board they fulfil the conditions of independence as specified in theAct and the Listing Regulations and are independent of the management. Further theIndependent Directors have complied with the Code for Independent Directors prescribed inSchedule IV to the Act.
Profile of the Directors as required under Regulation 36 of the Listing Regulationsare given in the Notice of the 25th Annual General Meeting.
During the year under report your Company has not accepted any fixed deposits.
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual performance evaluation of its own performance and the Directorsindividually as well as the evaluation of the working of its Committees.
The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.
Policy on Directors' Appointment and Remuneration:
The Board has framed a policy which lays down a framework in relation to remunerationof Directors Key Managerial Personnel and Senior Management of the Company.
The key features of the policy are as follows:
1. Criteria for appointment and removal of Director Key Managerial Personnel andSenior Management.
2. Criteria for performance evaluation.
3. Criteria for fixing the remuneration of Director Key Managerial Personnel andSenior Management.
The details of this policy are explained in the Corporate Governance Report and arealso available at www.shriramamc.com.
During the year 4 Board Meetings and 4 Audit Committee Meetings were convened and held.The details of the meetings are given in the Corporate Governance Report. The gap betweenthe Meetings was within the period prescribed under the Act and as per Regulation 17(2)and 18 (2) of the Listing Regulations respectively.
Pursuant to the requirement of Regulation 21 of the Listing Regulations the Companyhas constituted Risk Management Committee. The Company has in place a Risk ManagementPolicy commensurate with its size of operations which lays down a process foridentification and mitigation of risks that could materially impact its performance.
Corporate Social Responsibility:
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
Directors' Responsibility Statement:
Pursuant to the provisions of Section 134 (3) (c) of the Act the Directors confirmthat to the best of their knowledge and belief:
a) In the preparation of Annual Accounts and Financial Statements for the year endedMarch 31 2019 the applicable Accounting Standards have been followed along with properexplanations relating to material departures if any;
b) That such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgments and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2019 and of the Loss of the Company for the year ended on thatdate;
c) That proper and sufficient care has been taken for the maintenance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d) The Annual Accounts have been prepared on an ongoing concern basis;
e) That they have laid down internal financial controls commensurate with the size ofthe Company and that such financial controls were adequate and were operating effectively;
f) That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
Related Party Transactions:
All related party transactions of the Company are at arm's length basis and are in theordinary course of business. None of the related party transactions entered into by theCompany were in conflict with the Company's interest. There are no materially significantrelated party transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict with the interest of the Company atlarge. Members approval for material Related Party Transaction as defined under theListing Regulations shall be obtained at the ensuing Annual General Meeting.
All Related Party Transactions are placed before the Audit Committee/Board asapplicable for their approval. The particulars of contracts or arrangements with relatedparties in Form AOC -2 are annexed herewith as Annexure A'.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals:
During the year under report there were no significant material orders passed by theRegulators/ Courts/ Tribunals impacting the going concern status and Company's operationsin future.
Internal Financial Controls and their adequacy:
The Company has put in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size of the Company.
The Audit Committee comprises of Mr. Prabhakar Karandikar (Independent Director) asChairman Mr. Arindom Mukherjee (Independent Director) as Member Mrs. Jayashree Mahesh(Non- Independent Director) as Member and Mr. Kshiti Ranjan Das (IndependentDirector) as Member. All the recommendations made by the Audit Committee were accepted bythe Board.
Vigil Mechanism / Whistle Blower Policy:
As per the provisions of Section 177(9) of the Act the Company is required toestablish a Vigil Mechanism for Directors and employees to report genuine concerns.Regulation 4 (2) (d) (iv) of Listing Regulations also provides for establishment of vigilmechanism for directors and employees for above mentioned matters. The Company has aPolicy for Prevention Detection and Investigation of Frauds and Protection ofWhistleblower. The detail of the Vigil Mechanism is posted on the website of the Companyi.e. www.shriramamc.com.
Establishment of Internal Complaints Committee:
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. No complaints of sexual harassment were received during theyear.
Auditors and Auditors' Report:
The Company's Statutory Auditors M/s. G. D. Apte & Co. (Firm Registration No.100515W) Chartered Accountants Mumbai were appointed as Statutory Auditors of theCompany for a period of five consecutive years at the 23rd Annual General Meeting held onAugust 10 2017 on a remuneration mutually agreed upon by the Board of Directors and theStatutory Auditors.
Their appointment was subject to ratification by the Members at every subsequent AGMheld after the AGM held on August 10 2017. Pursuant to the amendments made to Section 139of the Act by the Companies (Amendment) Act 2017 effective from May 07 2018 therequirement of seeking ratification of the Members for the appointment of the StatutoryAuditors has been withdrawn from the Statute.
In view of the above ratification by the Members for continuance of their appointmentat this AGM is not being sought. The Statutory Auditors have given a confirmation to theeffect that they are eligible to continue with their appointment and that they have notbeen disqualified in any manner from continuing as Statutory Auditors.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
No fraud has been reported by the Auditors to the Audit Committee or the Board.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Mr. Suhas S.Ganpule Practising Company Secretary Proprietor of M/s. SG & Associates toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith as "Annexure B". The Secretarial Audit Report does notcontainanyqualification reservation or adverse remark.
Subsidiaries Joint Ventures or Associate Companies:
During the year under report there was no change in the associate company. The Companydoes not have any subsidiary or joint venture.
The Report on Corporate Governance forms part of the Directors' Report and is annexedherewith.
As required by the Listing Regulations Auditors' Report on Corporate Governance and adeclaration by the Managing Director with regards to Code of Conduct are attached to thesaid Report.
The Management Discussion and Analysis is given as a separate statement forming part ofthe Annual Report.
As required under Listing Regulations a detailed report on Corporate Governance alongwith the Certificate from the Company Auditors' confirming compliance forms an integralpart of this Report and certificate duly signed by theManagingDirectorandChiefFinancialOfficer Statements of the Company for the yearended March 31 2019 was submitted to the Board of Directors at their Meeting held on May08 2019. These certificates are attached to the Report on Corporate Governance.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo:
1. Conservation of Energy
The Company has no activity involving Conservation of Energy.
2. Technology Absorption
The Company has no activity involving Technology Absorption.
3. Foreign Exchange earnings and outgo
The Company did not have any foreign exchange earnings or outgo during the year underreview.
Extract of Annual Return
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of the Companies (Management andAdministration) Rules 2014 the extract of the Annual Return in the prescribed Form MGT-9is annexed herewith as "Annexure C". The complete Annual Return isavailable on the Company's Website www.shriramamc.com
Compliance with Secretarial Standards:
The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India (SS1 andSS2) respectively relating to Meetings of the Board and its Committees which havemandatory application.
Amount if any proposed to transfer to reserves:
The Company has made no transfers to reserves during FY 2018-2019.
Particulars of Employees:
During the year under report your Company has not employed any person who was inreceipt of remuneration in excess of the limits specified under Section 197 of the Actread with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
The details required as per Rule 5 (1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is annexed herewith as "Annexure D".As per the provisions of Section 136(1) of the Act the Annual Report excluding theinformation required as per Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 on employee's particulars is being sent to the memberswhich is however available for inspection at the Registered office of the Company duringworking hours of the Company up to the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining such information may write to the Company Secretary inthis regard.
The Board of Directors take this opportunity to express their sincere appreciation forthe excellent support and cooperation received from the Securities and Exchange Board ofIndia Association of Mutual Funds of India Stock Exchange Authorities AuditorsBankers Distributors other Service providers and Board of Trustees of Shriram MutualFund.
The Directors wish to place on record the continued enthusiasm total commitmentdedication and efforts employees of the Company at all levels.
We are also deeply grateful to the Shareholders of the Company and also to the largebody of investors of scheme of Shriram Mutual Fund for the continued confidenceand thefaith reposed in the Fund and look forward to their continued patronage.
| ||By Order of the Board |
| ||For Shriram Asset Management Company Limited |
|Place: Mumbai ||Prabhakar Karandikar |
|Date: May 08 2019 ||Chairman |
| ||DIN No: 02142050 |