Natco Economicals Limited. Year rd Annual Report. Page 1

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2 Natco Economicals Limited Year rd Annual Report Page 1

3 CIN: L65910GJ1994PLC Corporate Profile Name of Director Designation DIN Date of Appointment Date of Resignation Ashish Pandya Whole-time Director /09/ Vishal Desai Whole-time Director /05/ Shaishav Shah Independent Director /02/ Natvarlal Chavda Independent Director /08/ Vina Joshi Independent Director /08/ Bhadresh Bhavsar Independent Director /05/ /08/2017 Dhvani Contractor Independent Director /03/ /05/2017 Meghna Raval Company Secretary - 20/02/ /04/2017 Registered Office 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad Annual General Meeting Date: 29/09/2017 Time: a.m. onwards Venue: 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad Statutory Auditors Jayesh Patel&Co. 91, Mahavir Tower, Nr. Mahalaxmi Cross Road, Paldi Ahmedabad Phone No: ; Mobile No cajbpatel@gmail.com Bankers ICICI Bank 2

4 Audit Committee Dhvani Contractor Ashish Pandya Shaishav Shah Chairman Member Member Nomination and Remuneration Committee Dhvani Contractor Ashish Pandya Bhadresh Bhavsar Chairman Member Member Stakeholders Relationship Committee Ashish Pandya Shaishav Shah Dhvani Contractor Chairman Member Member Share Transfer Agent M/s. MCS Share Transfer Agent Ltd (Vadodara) 10, Aaram Apartment, Sampatrao Colony 12, Behind Laxmi Hall, Alkapuri, Vadodara Phone No: , Website: Secretarial Auditors M/s. S Bhattbhatt& Co. B-212, Atlantis K-10, Opp. Honest Restaurant, Sarabhai Road, Vadodara Listed on Stock Exchange BSE Ltd (Bombay Stock Exchange) 3

5 Contents Notice Directors Report Management Discussion and Analysis.23 Code of Conduct & CEO/CFO Certificate MGT 9.27 MR 3 Secretarial Audit Report Auditor s Report Balance Sheet Statement of Profit & Loss Cash Flow Statement Schedules to Account Significant Accounting Policies Attendance Slip Proxy Form

6 Notice NOTICE is hereby given that the 23 rd Annual General Meeting of the Members of Natco Economicals Limited will be held on Friday 29 th September, 2017 at a.m., at registered office of the Company at 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad to transact the following businesses: ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2017 and the Profit and Loss Account for the year ended on that date and the Reports of the Directors and Auditors thereon. 2. To consider and if thought fit to pass, with or without modification(s), the following Resolution as Ordinary Resolution. RESOLVED THAT pursuant to the provisions of Section 139 & other applicable provisions of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, and pursuant to the recommendations of the Audit Committee of the Board of Directors, M/s. Jayesh Patel & Co, Chartered Accountants, Ahmedabad, (Membership No ), the retiring Auditors of the Company be and are hereby re-appointed as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) until the conclusion of the next AGM (subject to ratification by members at every AGM held after this AGM) and that the Board of Directors be and is hereby authorized to fix the remuneration as may be recommended by the Audit Committee in consultation with the Auditors. SPECIAL BUSINESS 3. To appoint Mr. Shaishav Shah as Independent Director of the Company To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: RESOLVED THAT in accordance with the provisions of Section 160 and 161of Companies Act, 2013 and other applicable provisions, if any, Mr. Shaishav Shah (DIN: ), who was appointed as an Additional Director on 10 th February, 2017, be and is hereby appointed as an Independent Director of the Company, not liable to retire by rotation, to hold office for a term of five years. RESOLVED FURTHER THAT any Director or Company Secretary of the Company be and is hereby authorized to do all such acts, deeds and things and execute all such documents, instruments as, in its discretion may be considered necessary with the Registrar of Companies. 4. To appoint Mr. Natvarlal Chavda as Independent Director of the Company To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: RESOLVED THAT in accordance with the provisions of Section 160 and 161of Companies Act, 2013 and other applicable provisions, if any, Mr. Natvarlal Chavda (DIN: ), who was appointed as an Additional Director on 09 th August, 2017, be and is hereby appointed as an Independent Director of the Company, not liable to retire by rotation, to hold office for a term of five years. 5

7 RESOLVED FURTHER THAT any Director or Company Secretary of the Company be and is hereby authorized to do all such acts, deeds and things and execute all such documents, instruments as, in its discretion may be considered necessary with the Registrar of Companies. 5. To appoint Ms. Vina Joshi as Independent Women Director of the Company To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: RESOLVED THAT in accordance with the provisions of Section 160 and 161of Companies Act, 2013 and other applicable provisions, if any, Ms. Vina Joshi (DIN: ), who was appointed as an Additional Director on 09 th August, 2017, be and is hereby appointed as an Independent Director of the Company, not liable to retire by rotation, to hold office for a term of five years. RESOLVED FURTHER THAT any Director or Company Secretary of the Company be and is hereby authorized to do all such acts, deeds and things and execute all such documents, instruments as, in its discretion may be considered necessary with the Registrar of Companies. 6. To appoint Mr. Vishal Desai as Director of the Company To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: RESOLVED THAT Mr. Vishal Desai (DIN: ) who was appointed by the Board of Directors as an Additional Director of the Company with effect from 26 th May, 2017 and who holds office up to the date of this Annual General Meeting of the Company in terms of Section 161 (1) of the Companies Act, 2013 ( Act ) and relevant provisions of the Articles of Association of the Company, but who is eligible for appointment and in respect of whom the Company has received a notice in writing from a Member under Section 160 (1) of the Act with requisite deposit proposing his candidature for the office of Director of the Company, be and is hereby appointed a Director of the Company, not liable to retire by rotation. 7. To appoint Mr. Vishal Desai as Whole-time Director of the Company To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 and other applicable provisions, if any, of the Companies Act, 2013 ( Act ) read with Schedule V to the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time and subject to approval of the Central Government and other authorities, members of the Company hereby approves appointment and terms of remuneration of Mr. Vishal Desai (DIN: ) as Whole-time Director of the Company for a period of three years with effect from August 9, 2017 upon the terms & conditions as may be mutually agreed to between the Board of Directors and Mr. Vishal Desai, with authority to the Board of Directors to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to between the Board of Directors and Mr. Vishal Desai. RESOLVED FURTHER THAT the Board of Directors of the Company, be and is hereby authorized to alter, revise and amend the terms and conditions of appointment of Mr. Vishal Desai, the Director, 6

8 with mutual consent, subject to and in accordance with the applicable provisions of the Companies Act, 2013 and Schedule V thereto and approval of the Central Government and appropriate authorities, which may be obtained for the same and for the payment of remuneration as minimum remuneration to Mr. Vishal Desai. Salary 50,000/- per month which is eligible for revision on a date to be determined by the Board Governance, Nomination and Compensation Committee. Regd. Office: 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad By the Order of Board Shipra Mapara (Company Secretary) Date: 14 th August, 2017 Place: Ahmedabad 7

9 Notes: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT PROXY/PROXIES TO ATTEND AND VOTE ON A POLL INSTEAD OF HIM/HER AND SUCH A PROXY/PROXIES NEED NOT BE A MEMBER OF THE COMPANY. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than ten percent of the total share capital of the Company, carrying voting rights. In case a proxy is proposed to be appointed by a Member holding more than ten percent of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. A proxy form is sent herewith. Proxies submitted on behalf of the Companies, Societies, etc., must be supported by an appropriate resolution/authority as applicable. 2. The instrument appointing a proxy should be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. Moreover, Members /proxies should bring the attendance slips duly filled in and PHOTO ID Proof for attending the meeting. 3. Corporate Members intending to send their authorized representatives to attend the Meeting pursuant to section 113 of the Companies Act, 2013 are requested to send to the Company, a certified copy of the Board Resolution together with Specimen Signatures of those representative(s) authorised under said resolution to attend and vote on their behalf at the Meeting. 4. As required under SEBI LODR (Listing Obligation & Disclosure Requirements) Regulations, 2015, a brief resume of Directors including those proposed to be appointed/re-appointed, nature of their expertise in specific functional areas, name of Companies in which they hold directorships and memberships/chairmanships of Board Committees, shareholding and relationships between directors inter-se, are provided in the annexure to the notice. 5. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 is annexed and forms part of the Notice. 6. Members are requested to: (a) bring their copy of the Annual Report and Attendance Slip with them at the Annual General Meeting. (b) quote their Regd. Folio Number/DP and Client ID Nos. in all their correspondence with the Company or its Registrar and Share Transfer Agent. 7. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote. 8. The Register of Members and Share Transfer Books of the Company will remain closed from 27 th September, 2017 to 29 th September, 2017 (both days inclusive). 9. Pursuant to Section 72 of the Companies Act, 2013, Members who hold shares in the physical form can nominate a person in respect of all the shares held by them singly or jointly. Members who hold shares in single name are advised, in their own interest, to avail of the nomination facility by filing required form. 10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in physical form can submit their PAN details to the Company/Registrar and Share Transfer Agents. 8

10 11. All documents, transfers, dematerialization requests and other communications in relation thereto should be addressed directly to the Company s Registrar & Transfer Agents. 12. Members holding shares in multiple folios in physical mode are requested to apply for consolidation to the Company or its Registrar & Share Transfer Agent along with relevant Share Certificates. 13. Members are requested to send all correspondence concerning registration of transfers, transmissions, subdivision, consolidation of shares or any other shares related matter and/or change in address and bank account, to company s Registered Office. 14. Members desirous of getting any information on any items of business of this Meeting are requested to address their queries to Compliance Officer of the Company at the registered office of the Company at least ten days prior to the date of the meeting, so that the information required can be made readily available at the meeting. 15. Voting through Electronic Voting (E-Voting Procedure): 1.In compliance with provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014 as substituted by the Companies (Management and Administration) Amendment Rules, 2015 ( Amended Rules 2015 ) and Clause35B of the Listing Agreement, the Company is pleased to provide members facility to exercise their right to vote on resolutions proposed to be considered at the 23 rd Annual General Meeting (AGM) by electronic means and the business may be transacted through e- Voting Services. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM ( remote e-voting ) will be provided by National Securities Depository Limited (NSDL). 2. The facility for voting through ballot paper shall be made available at the AGM and the members attending the meeting who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through ballot paper. 3. The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. 4. The remote e-voting period commences on Tuesday 26 th September, 2017 (9:00 am) and ends on Thursday 28 th September, 2017 (5:00 pm). During this period members of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of 23rdSeptember, 2017, may cast their vote by remote e-voting. The remote e- voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not be allowed to change it subsequently. 5. The process and manner for remote e-voting are as under: A. In case a Member receives an from NSDL [for members whose Ids are registered with the Company/Depository Participants(s)]: (i) Open and open PDF file viz; Natco Economicals Limited remote e-voting.pdf with your Client ID or Folio No. as password. The said PDF file contains your user ID and password/pin for remote e-voting. Please note that the password is an initial password. (ii) Launch internet browser by typing the following URL: 9

11 (iii)click on Shareholder Login (iv)put user ID and password as initial password/pin noted in step (i) above. Click Login. (v) Password change menu appears. Change the password/pin with new password of your choice with minimum 8 digits/characters or combination thereof. Note new password. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. (vi) Home page of remote e-voting opens. Click on remote e-voting: Active Voting Cycles. (vii) Select REVEN of Natco Economicals Limited. (viii) Now you are ready for remote e-voting as Cast Vote page opens. (ix) Cast your vote by selecting appropriate option and click on Submit and also Confirm when prompted. (x) Upon confirmation, the message Vote cast successfully will be displayed. (xi) Once you have voted on the resolution, you will not be allowed to modify your vote. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. Together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through to suhasbrd@rediffmail.comor natcoecolimited@gmail.com with a copy marked toevoting@nsdl.co.in. B. In case a Member receives physical copy of the Notice of AGM [for members whose IDs are not registered with the Company/Depository Participants(s) or requesting physical copy]: (i) Initial password is provided as below/at the bottom of the Attendance Slip for the AGM: REVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN. (ii) Please follow all steps from Sl. No. (ii) To Sl. No. (xii) Above, to cast vote. 16. In case of any queries, you may refer the frequently asked Questions (FAQs) for Members and remote e-voting user manual for Members available at the download section of or call on toll free no.: If you are already registered with NSDL for remote e-voting then you can use your existing user ID and password/pin for casting your vote. 18. You can also update your mobile number and id in the user profile details of the folio which may be used for sending future communication(s). 19. The voting rights of members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date of 23 rd September, Any person, who acquires shares of the Company and become member of the Company after dispatch of the Notice of AGM and holding shares as of the cut-off date i.e. 23 rd September, May obtain the login ID and password by sending a request at evoting@nsdl.co.inornatcoecolimited@gmail.com. However, if you are already registered with NSDL 10

12 for remote e-voting then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using Forgot User Details/Password option available on A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper. 22. Mr. S.D Bhattbhatt, Company Secretary (Membership No ), Proprietor M/s. S Bhattbhatt& Co., Practising Company Secretary has been appointed as the Scrutinizer to scrutinize the voting and remote e-voting process in a fair and transparent manner. 23. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the assistance of scrutinizer, by use of ballot paper for all those members who are present at the AGM but have not cast their votes by availing the remote e-voting 24.The Scrutinizer shall after the conclusion of voting at the AGM, will first count the votes cast at the meeting and thereafter unblock the votes cast Through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shall make, not later than three days of the conclusion of the AGM, a consolidated scrutinizer s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith. 25. The Results declared along with the report of the Scrutinizer shall be placed on the website of the Company and on the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in writing. The results shall also be immediately forwarded to the BSE Limited, Mumbai. 26. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Office of the Company during normal business hours (9.00 am to 5.00 pm) on all working days except Saturdays, up to and including the date of the Annual General Meeting of the Company. 27. This Notice has been updated with the instructions for voting through electronic means as per the Amended Rules All documents referred to in the accompanying notice and Statutory Registers are open for inspection at the registered office of the Company on all working days (barring Saturday and Sunday) between a.m. to 1.00 p.m. prior to the Annual General Meeting. 29. The entire Annual Report is also available on the Company s website Regd. Office: 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad By the Order of Board Shipra Mapara (Company Secretary) Date: 14 th August, 2017 Place: Ahmedabad 11

13 Explanatory Statement pursuant to section 102 of the Companies Act, 2013 Item No. 3: Appointment of Mr. Shaishav Shah, as Director of the Company Subject to the necessary approval by the Members of the Company in the General Meeting, the Board of Directors of the Company at its Meeting held on 10 th February, 2017, appointed Mr. Shaishav Shah (DIN: ),as Additional Director of the Company, pursuant to Section 161 of Companies Act, Hence, he would hold office upto the date of ensuing Annual General Meeting. The Company has received consent in writing to act as Director in Form DIR-2 and intimation in Form DIR-8 pursuant to Rule 8 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 to the effect that he is not disqualified under sub-section (2) of section 164 of the Companies Act, The Board considers that his association would be of immense benefit to the Company and it is desirable to avail his services as Director. Accordingly, the Board recommends resolution no. 4 in relation to appointment of Mr. Shaishav Shah, as Director of the Company, for the approval of Shareholders of the Company. None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the said Resolution. Brief profile of Director: Name of Director Shaishav Shah Age 31 years Nationality Indian Date of Appointment 10/02/2017 Qualification and Expertise He is Post Graduate and has cleared Intermediate examination of Chartered Accountant (CA). He has experience as Financial Consultant for about 5 years. Shareholding in Natco Nil Economicals Limited List of Outside Nil Directorship Item No. 4: Appointment of Mr. Natvarlal Chavda, as Director of the Company Subject to the necessary approval by the Members of the Company in the General Meeting, the Board of Directors of the Company through Circular Resolution passed on 09 th August, 2017 appointed Mr. Natvarlal Chavda (DIN: )as Additional Director of the Company pursuant to Section 161 of Companies Act, Hence, he would hold office upto the date of ensuing Annual General Meeting. The Company has received consent in writing to act as Director in Form DIR-2 and intimation in Form DIR-8 pursuant to Rule 8 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 to the effect that he is not disqualified under sub-section (2) of section 164 of the Companies Act,

14 The Board considers that his association would be of immense benefit to the Company and it is desirable to avail his services as Director. Accordingly, the Board recommends resolution no. 5 in relation to appointment of Mr. Natvarlal Chavda, as Director of the Company, for the approval of Shareholders of the Company. None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the said Resolution. Brief profile of Director: Name of Director Natvarlal Chavda Age 65 years Nationality Indian Date of Appointment 09/08/2017 Qualification and Expertise He is Retired Additional Collector of Gujarat Administrative Services. He is holding a Bachelor Degree in Commerce. He has very rich experience in the field of Administration and Management. Shareholding in Natco Nil Economicals Limited List of Outside Nil Directorship Item No. 5: Appointment of Ms. Vina Joshi as Director of the Company: Subject to the necessary approval by the Members of the Company in the General Meeting, the Board of Directors of the Company through Circular Resolution passed on 09 th August, 2017 appointed Ms. Vina Joshi (DIN: ) as Additional Director of the Company pursuant to Section 161 of Companies Act, Hence, she would hold office upto the date of ensuing Annual General Meeting. The Company has received consent in writing to act as Director in Form DIR-2 and intimation in Form DIR-8 pursuant to Rule 8 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 to the effect that she is not disqualified under sub-section (2) of section 164 of the Companies Act, The Board considers that her association would be of immense benefit to the Company and it is desirable to avail her services as Director. Accordingly, the Board recommends resolution no. 6 in relation to appointment of Ms. Vina Joshi, as Director of the Company for the approval of Shareholders of the Company. None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the said Resolution. Brief profile of Director: Name of Director Vina Joshi Age 61 years Nationality Indian Date of Appointment 09/08/2017 Qualification and Expertise She has rich experience in the field of Education. She has done her Master in Arts from Gujarat University. She has experience in writing Articles on Politics and History. Shareholding in Natco Nil 13

15 Economicals Limited List of Outside Directorship Nil Item No. 6 & 7: Appointment of Mr. Vishal Desai as Director of the Company: Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed that Mr. Vishal Desai, (DIN: ), has been appointed as Wholetime Director of the Company. The appointment of Mr. Vishal Desai shall be effective upon approval by the members in the Meeting. None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the said Resolution. Brief profile of Director: Name of Director Vishal Desai Age 48 years Nationality Indian Date of Appointment 09/08/2017 Qualification and Completed MLO FED and UST Licensing, Active NMLS License, BS Expertise in Business & Marketing (Calcutta University). He is Mortgage Loan Officer, Sistar Mortgage, USA. He has served as Vice President (Marketing) at TDT Copper, Ahmedabad. He was a Director in TDT Infra, Ahmedabad. Also, he was Assistant Vice President at T D Bank, USA. Shareholding in Natco Nil Economicals Limited List of Outside Nil Directorship Regd. Office: 304, Abhijit-1, Near Mithakhali Six Road, Navarangpura, Ahmedabad By the Order of Board Shipra Mapara (Company Secretary) Date: 14 th August, 2017 Place: Ahmedabad 14

16 To The Members, Your Directors present this 23rd Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, Particulars Current Year (in Rupees) Previous Year (in Rupees) Total Income 34,82,421 29,07,617 Profit/(Loss) before Finance Cost and Depreciation 5,85,463 (14,59,013) Less : Finance Cost Profit/(Loss) before Depreciation 5,85,463 (14,59,013) Less : Depreciation 31,832 40,133 Profit/(Loss) before Tax 5,53,631 (14,99,146) Provision for Tax Current Tax Deferred Tax Tax For earlier Years 1,66, Balance of Profit/(Loss) for the year before Extra-Ordinary items 3,87,541 (15,03,394) Extra-Ordinary items -- 80,000 Balance of Profit/(Loss) for the year after Extra-Ordinary items 3,87,541 (15,83,394) Balance Brought forward from the Previous year (11,86,517) 3,96,877 Amount available for appropriation Proposed Dividend Tax on proposed Dividend Balance Profit/(Loss) carried to Balance Sheet (7,98,976) (11,86,517) Performance Review During the year under review your Company sustained with limited growth path due to which though the gross total income increased from Rs. 29,07,617/- to Rs. 34,82,421/- in comparison of last year and the Company incurred loss of (7,98,976) in the year under review as compared to loss incurred in previous year of Rs. (11,86,517). Dividend Directors Report Financial Results Your directors did not recommend payment of any dividend for the year ended 31 st March,

17 Directorate On the recommendations of nomination and remuneration committee, Mr. Shaishav Shah has been appointed as Independent Director of the Company with effect from 10 th February, 2017 to hold office for a term of five years. A brief profile of Mr. Shaishav Shah is given separately in the notice convening AGM. Your directors recommend his appointment for the members' approval. On the recommendations of nomination and remuneration committee, Mr. Natvarlal Chavda has been appointed as Independent Director of the Company with effect from 09 th August, 2017 to hold office for a term of five years. A brief profile of Mr. Natvarlal Chavda is given separately in the notice convening AGM. Your directors recommend his appointment for the members' approval. On the recommendations of nomination and remuneration committee, Ms. Vina Joshi has been appointed as Independent Director of the Company with effect from 09 th August, 2017 to hold office for a term of five years. A brief profile of Ms. Vina Joshi is given separately in the notice convening AGM. Your directors recommend her appointment for the members' approval. On the recommendations of nomination and remuneration committee, Mr. Vishal Desai has been appointed as Whole-time Director of the Company with effect from 09 th August, 2017 to hold office for a term of three years. A brief profile of Mr. Vishal Desai is given separately in the notice convening AGM. Your directors recommend his appointment for the members' approval. Mr. Bhadresh Bhavsar has resigned as Independent Director of the Company with effect from 09 th August, Transfer to Reserves Due to Loss for the year under review accumulated loss in the tune of Rs Lakhs was transferred to General Reserve. Number of Board Meetings held during the year The number of Board Meetings held during the year from 1 st April 2016 to 31 st March 2017 is given below: th May, th July, th August, nd August, th November, th February, th March, 2017 The time gap between any two meetings did not exceed four months. The compliance report in respect of laws applicable to the Company has been periodically reviewed by the Board of Directors of the Company. Directors Responsibility Statement: Your directors confirm: I. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure. 16

18 II. III. IV. That the directors have selected such accounting policies & applied them consistently & made judgment & estimates that are reasonable & prudent so as to give a true & fair view of the state of affairs of the company at the end of the financial year & of the Profit of the company for the year. That the directors have taken proper & sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company & for preventing & detecting fraud & other irregularities. That the directors have prepared the annual accounts on a going concern basis. Listed on Stock Exchanges At Present the Equity shares of the Company are listed and traded with the Bombay Stock Exchange Limited and the Listing Fee for the year has been duly paid. Scrip Code of the Company is Corporate Governance Report As per SEBI LODR, Compliance with the provisions of regulation 17 through 27 and clauses (b) to (i) of sub regulations 46 and Para C, D and E of schedule V is not mandatory for the time being, in respect of the following class of Companies: a. Companies having paid up equity share capital not exceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 Crore, as on the last day of previous financial year; b. The listed entity which has listed its specified securities on the SME Exchange; As such our Company falls in the ambit of aforesaid exemption Consequently Corporate Governance does not forms part of the Annual Report for the Financial Year However, the Company is following industry best corporate governance standards. Associate & Subsidiary Companies The company does not have any Associate or Subsidiary Companies Deposits The Company has not invited or accepted any fixed deposit from the public during the year under review. Secretarial Audit Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexure to this report. Extracts of Annual Return and other disclosures under Companies (Appointment & Remuneration) Rules, 2014 The Extract of Annual Return in Form MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules 2014 and Rule 12 of Companies (Management & Administration) Rules, 2014 duly certified by the Practising Company Secretary is annexed hereto 17

19 and forms part of this report. Further the Disclosure in the Board Report under Rule 5 of Companies (Appointment & Remuneration) Rules, 2014 is also annexed hereto and forms part of this report. Declaration on Independent Directors The Board of Directors declares that the Independent Directors Mr. Shaishav Shah, Mr. Natvarlal Chavda & Ms. Vina Joshi: a) in the opinion of the Board, are persons of integrity and possesses relevant expertise and experience; b) who were or were not a promoter of the company or its holding, subsidiary or associate company who are not related to promoters or directors in the company, its holding, subsidiary or associate Company; c) Who have or had no pecuniary relationship with the company, its holding, subsidiary or associate company; d) Their promoters or directors, during the two immediately preceding financial years or during the current financial year; e) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company or their promoters, or directors, amounting to two percent or more of its gross turnover of total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; Who, either himself or any of his relatives i. Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the Financial Year in which he is proposed to be appointed; ii. is or has been an employee or propriety or a partner, in any of the three financial years immediately preceding the Financial Year in which he is proposed to be appointed, of A Firm of Auditors or Company Secretaries in Practice or Cost Auditors or the Company or its Holding, Subsidiary or Associate Company; or Any legal or a consulting firm that has or had any transaction with the Company, its Holding, Subsidiary or Associate Company amounting to ten percent or more of the gross turnover of such firm; iii. iv. Holds together with his relative two per cent, or more of the total voting power of the Company; or Is a Chief Executive or Director, by whatever name called, of any non-profit organization that receives twenty-five percent or more of its receipts from the Company, any of its Promoters, Directors or its Holding, Subsidiary or Associate Company or that holds two per cent or more of the total voting power of the Company. 18

20 Particulars of Loans, Guarantees or Investments The particulars of Loans, Guarantees or Investments as covered under provision of section 186 of the Companies Act, 2013 made by the Company during Financial Year are given under the respective head and the same is furnished in the notes to the Financial Statement. Related Party Transactions There were no materially and significant transaction with Related Parties i.e. Promoters, Directors or the Management, their Subsidiaries or relatives conflicting with the Companies interest. There were no transactions that took place with related parties which can be considered not to be in the normal course of business. Particulars of Employees None of the Employees of the Company was in receipt of the remuneration exceeding the limits prescribed under section 197 of the Companies Act, 2013 as amended, during the year under review. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and out-go. Since your Company does not own any manufacturing facility particulars about Conservation of Energy and Technology Absorption are not applicable. The Foreign Exchange Earnings and out-go for the year under review is nil. Risk Management Policy Implementation The board takes responsibility for the overall process of risk management in the organization. Risk Management is the process of minimising and mitigating the risk. Its start with identification and evaluation of risk. The Company has followed strict approach to deal with possibility of any risk in the finance business. To Control the Operational risk Company has taken several measures and applied strict credit strategies. Through a detailed risk management programme, each functional head addresses opportunities and the attendant risks through a systematic approach aligned to the Company's objectives. The audit committee also reviews reports covering operational, financial and other business risk areas. Formation and Adoption of Different Policies: a) Policy Determination of Materiality: In Accordance with Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the Company has adopted a policy determination of Materiality containing Disclosure of Events or Information relating to specified securities. b) Policy for Preservation of Documents: Regulation 9 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 requires every listed entity should formulate a policy for preservation of documents and accordingly the Company has adopted the same and uploaded the same on the website. c) Policy on Materiality of Related Party Transactions: The Company has adopted a policy of Related Party Transactions with a view to set out the materiality thresholds for the Related Party Transactions and the manner of dealing with the transactions between the Company and its related 19

21 parties based on the Companies Act, 2013, SEBI (LODR) Regulations and any other laws and regulations as may be applicable to the Company. d) Whistle Blower Policy: The Company has adopted the Whistle Blower Policy for their employees and directors to report the concerns about unethical behaviour, actual or suspected fraud or violation of the code of conduct or policy as per Section 177(9) of the Companies Act, 2013 and as per Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, Remuneration policy A Nomination & Remuneration Policy has been formulated pursuant to the provisions of section 178 and other applicable provisions of the Companies Act, 2013 and rules thereto and SEBI LODR stating therein the Company s policy and Directors/Key Managerial Personnel/other Employees appointment and remuneration recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. The said policy may be referred on Company s Website. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year , the Company has not received any complaint on sexual harassment. Auditors M/s. Jayesh Patel & Co, Chartered Accountants, Ahmedabad, (Membership No ), retires at the ensuing Annual General Meeting and are eligible for re-appointment. In accordance with the provisions of the Companies Act, 2013, it is proposed to re-appoint them as Auditors for the Financial Year from the conclusion of this Annual General Meeting (AGM) until the conclusion of the next Annual General Meeting, subject to the approval of shareholders. Audit Committee The Audit Committee comprises of Mr. Shaishav Shah (Independent Director) Mr. Vishal Desai (Independent Director) and Mr. Ashish Pandya all are financially literate and having accounting and related Administrative Expertise. The Independent Auditors and the Secretarial Auditors of the Company are also invited to the Audit Committee meetings. The Chairman of the Audit Committee Mr. Shaishav Shah was present at the Annual General Meeting of the Company held on 29 th September, During the financial year Seven (7) meetings of the Audit Committee were held as on: th May, th July, th August, nd August, th November, th February, th March,

22 As on March 31, 2017, all three Directors of the Board are the Members of Audit Committee & the details of the meetings attended by members during the year are as follows: Name of Member Designation No. of Meeting held Dhvani Contractor Chairman 7 7 Ashish Pandya Member 7 3 Shaishav Shah Member 7 1 No. Meeting attended of Stakeholders Relationship Committee In compliance with the provisions of Listing Agreement and Section 178 of Companies Act, 2013, the Company re-constituted this committee as Stakeholders Relationship Committee. This committee of the Board of the Company looks into various issues relating to shareholders/investors including transfer and transmission of shares held by shareholders in physical format as well as non-receipt of dividend, Annual Report, shares after transfer and delays in transfer of shares. The committee also looks into issues including status of dematerialization/rematerialization of shares and issue of duplicate share certificates and tracks investor complaints and suggests measures for improvement from time to time. During the financial year Seven (7) meetings of the Shareholders / Investors Grievance Committee were held as on: th July, th August, th November, th March, 2017 As on March 31, 2017, the Shareholders / Investors Grievance Committee comprised of the following members & the details of the meetings attended by members during the year are as follows: Name of Member Designation No. of Meeting held Ashish Pandya Chairman 4 2 Shaishav Shah Member 4 1 Dhvani Contractor Member 4 4 No. Meeting attended of Nomination and Remuneration Committee In compliance of Section 178 of Companies Act, 2013 the Board has constituted the Remuneration Committee. The terms of reference of the committee inter alia include Succession planning for Board of Directors and Senior Management Employees, identifying and selection of candidates for appointment of Directors/Independent Directors based on certain laid down criteria s, identifying potential individuals for appointment of Key Managerial Personnel and other Senior Managerial position and review the performance of the Board of Directors and Senior Management Personnel including Key Managerial Personnel based on certain criteria approved by the Board. While reviewing the performance, the committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents, remuneration commensurate with the 21

23 performance of individual and group and also maintains a balance between fixed and incentive pay reflecting both short and long term objectives of the Company. Acknowledgement Your Directors wish to place on record their appreciation for the whole hearted and sincere cooperation the Company has received from its banker, State Bank of India and various Government agencies. Your Directors also wish to thank all the employees for their co-operation. For Natco Economicals Limited Place: Ahmedabad Ashish Pandya Vishal Desai Date: 26 th May, 2017 (Whole Time Director) (Director) 22

24 Management Discussion & Analysis ECONOMIC OUTLOOK India remains the fastest growing economy in the world - economic fundamentals are strong, and reform momentum continues. GST is on track for implementation in the second quarter of the fiscal year, and is expected to yield substantial growth dividends from higher efficiencies, and raise more revenues in the long term, according to a new World Bank report. While, agriculture growth delivered in , the report notes that investment growth remains subdued, partly because of banking sector stress. IMF projects India to grow at 7.7 per cent in 2018, estimating a significant increase against the backdrop of ongoing economic reforms. However India s economy was slowing down in early FY17, until the favorable monsoon started lifting the economy, but the recovery was temporarily disrupted by the government s demonetization initiative. On November 8, 2016, the government demonetized 86 percent of India s currency in circulation. Demonetization caused an immediate cash crunch, and activity in cash reliant sectors was affected. GDP growth slowed to 7.0 per cent year-on-year (y/y) during the third quarter of from 7.3 percent in the first quarter. GDP growth in the fourth quarter of the previous financial year, , has turned out to be below the expectation of most economic analysts. India s economic growth slowed to 6.1% in the fourth quarter ending March 2017, compared with 7.1% in the previous quarter, as the government s note ban decision slowed activity in cash-dependent sectors. COMPANY OVERVIEW AND PERFORMANCE India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. However the November 2016 demonetisation hit micro finance companies very badly as loan repayments slowed down and defaults increased. On a year-on-year basis, break-up of the GVA data shows that all sectors, with the exception of agriculture and the public administration segment saw a sharp slowdown. Growth in the finance sector slowed to a mere 2.2 percent compared to 9 percent in the year-ago period. The rating agency expects net interest margins for micro finance companies to decline to 80 to 100 basis points. Operating expenses are also likely to increase due to investments to be made on information technology and collections infrastructure by most players. Although your company is overcome to the fear of Bad and doubtful debts however cautious approach is demand in the current scenario. Clearly a business which has to manage its 80%costs with staff, occupancy costs cannot be viable unless there is 99% efficiency in collections. OPPORTUNITIES & THREATS: Any changes in the regulatory environment could affect the performance of the Company. The financial policies and the monetary policies are able to lead the growth of financial sector. The Indian 23

25 banking sector has put digital transformation high on its agenda, especially after the demonetisation announcement. This pushed the industry to work quickly to enhance its customer facing platforms and invest in payment tools. Your Company also aims at using its technological advantage and an unique business model to reduce the cost of funds for the borrowers and earn a greater spread than its competitors. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has established its internal control system commensurate with the requirement of its size. The Company has proper and adequate system of internal controls to ensure that all its assets are safeguarded and protected against loss from unauthorized use or disposition of assets and that the transactions are recorded and reported. The Finance Department of the company is well staffed with experienced and qualified personnel who will play an important role in implementing and monitoring the internal control environment and compliance with statutory requirements. The Internal Control Systems and the procedures have been repeatedly fine-tuned and improved upon in line with business changes. The Company has also established Standard Operating Procedures for all its functional areas. The internal controls and audit systems are being reviewed periodically by the management and Audit Committee and steps are taken as part of continuous improvement. HUMAN RESOURCE: The relationship with the employees continues to be cordial. The Company recognizes the importance and contribution of its employees for its growth and development and constantly endeavours to train nurture and groom its people The Company puts emphasis on attracting and retaining the right talent. The company places emphasis on training and development of employees at all levels and has introduced methods and practices for Human Resource Development. CAUTIONARY STATEMENT: [ The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the Company s growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward looking statements expressed in this report consequent to new information or developments, events or otherwise. The operational performance and future outlook of the business has been reviewed by the management based on current resources and future development of the Company. DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY S CODE OF CONDUCT: This is to confirm that the Company has adopted a Code of conduct for its employees including the director. I confirm that the Company has in respect of the financial Year ended 31st March, 2017, 24