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CIFCO Finance Ltd.

BSE: 511086 Sector: Financials
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CIFCO Finance Ltd. (CIFCOFINANCE) - Director Report

Company director report

TO THE SHAREHOLDERS

Your Directors present the THIRTY-FIRST ANNUAL REPORT of the Company together with theAudited Statements of Accounts for the year ended 31st March 2015.

1. FINANCIAL RESULTS

Amount (Rs.lacs)

Year ended 31st March 2015 Year ended 31st March 2014
Total Income 58.28 15.74
Add: Reversal of provision in diminution in value of investments no longer required -- --
58.28 15.74
Profit/(Loss) before Depreciation 0.03 (61.46)
(Add)/Less: Depreciation 0.10 2.65
Profit/(Loss) Before Tax (0.07) (64.11)
(Add)/Less: Provision for Taxation -- --
Prior Years’ Tax Adjustment -- --
Profit/(Loss) after Tax (0.07) (64.11)
Add/(Less): Losses brought forward from previous year (2874.69) (2810.58)
Surplus/(Deficit) carried to
Balance Sheet (2874.76) (2874.69)

In view of the accumulated losses the Directors do not recommend any dividend forthe year under report.

3. CHANGE IN THE NATURE OF BUSINESS IF ANY

There has been no change in the nature of business of the Company.

4. MANAGEMENT ANALYSIS

The Company continued to be impeded by the restrictions for pursuing any activity of aNon-Banking Finance Company as imposed by the Reserve Bank of India. Other income was onaccount of remission of interest.

However the quantum of revenues generated being nominal it was inadequate todischarge the liabilities. In the absence of any employee on the payrolls the Companycontinued to rely on the honorary help rendered by the personnel of Associate Companieswithout any obligation legal or otherwise arising on the Company on account of such helpbeing accepted by it or any kind of binding on such personnel legal or otherwise onaccount of their rendering such help to the Company.

5. NOTE ON STATE BANK OF INDIA MATTERS

As reported earlier the Company had offered a One-Time Settlement of about Rs.7.50 lacs to State Bank of India (SBI) in respect of its Dividend Warrant Accountliability. SBI rejected the offer and the matter is presently with DRT for appropriateorders.

6. MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE BOARDREPORT

There has been no material change between the end of the Financial Year and the date ofthe Board Report.

7. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOTHE FINANCIAL STATEMENTS

There are adequate internal control procedures commensurate with the size of theCompany and the nature of its business for the purchase of inventory and fixed assets andfor the sale of goods.

8. DETAILS OF SUBSIDIARY/JOINT VENTURES

As on the date of this Report the Company has no Subsidiary.

9. ASSOCIATE COMPANIES

As on the date of this Report there is no Associate Company.

10. FIXED DEPOSITS/NON-CONVERTIBLE DEBENTURES

As reported earlier in the light of various restrictions the Company was unableto generate any income which could be deployed for repayment of the deposits as well asnon-convertible debentures (NCDs). Further the Company’s application to the CompanyLaw Board for revision in the Schedule of Repayments is still pending approval.

During the year under report no deposits have been repaid.

11. REDEMPTION OF PREFERENCE SHARES

As reported earlier 1200000 10% Cumulative Preference Shares of Rs. 10/- eachfully paid-up aggregating Rs.1.20 crores allotted by the Company in 1998 wereredeemable at par on March 31 2003. However on account of acute financial crisis beingfaced by theCompany the repayment was not done.

Further the Company was unable to issue any equity shares to facilitate suchredemption.

12. AUDITORS

M/s M.D.Pandya & Associates Chartered Accountants Mumbai bearing ICAIRegistration No.107325W hold office as Auditors of the Company upto the conclusion of theforthcoming Annual General Meeting.Acertificate has been obtained from them pursuant toSection 224 (1-B) of the Companies Act 1956 to the effect that their appointment ifmade would be within the limits prescribed thereunder.

13. AUDITORS’ REPORT

The Auditors have made certain observations in their Report on compliances not madeby the Company.

As explained earlier despite the rejection by the Reserve Bank of India (RBI) of theCompany’s application for registration as a Non-Banking Financial Company (NBFC) andthe consequential restrictions imposed by RBI the Company continued to carry onactivities of an NBFC in terms of a legal opinion obtained for the limited purpose ofdischarging its liabilities including repayment to the depositors and to meetadministrative overheads. Hence the Accounts have been prepared on a going concern basis.This has been further explained in Note 2 to the Accounts under Note 15.

Further the Company has also been legally advised that in the light of RBI’srejection referred above the applicability of the various provisions of "PrudentialNorms Directions" does not arise. Hence Prudential Norms for Income RecognitionAssets Classification and Provisioning for Non-PerformingAssets have not been followed.

As regards repayment of deposits in compliance of the Order passed by the Company LawBoard (CLB) read together with the Corrigendum issued thereunder as also the repaymentof Non-

CumulativeDebenturesintermsofthe Schedule prepared therefor the developments inrespect thereof during the period under report have been explained separately as well asin Note Nos.6(a) and 6(b) to the Accounts under Note 15.

As regards the observation regarding disqualification of Directors for appointment asDirectors in terms of Section 164(2) of the Companies Act 2013 the Board was revampedand the present Directors offered themselves for appointment with the sole intention ofco-ordinating with the Promoters of the Company in their efforts to discharge theCompany’s liabilities expeditiously notwithstanding that such appointment wouldattract disqualification under the said Section as stated herein and as observed by theAuditors.

14. SHARE CAPITAL

During the year under report the Company has not issued any shares.

15. NOMINATION AND REMUNERATION COMMITTEE RISK MANAGEMENT COMMITTEE OR ANY OTHERCOMMITTEE

The Company is not paying remuneration to its Directors and hence has not constitutedany Remuneration Committee. Further in the absence of any commercial activities as wellas means of revenue generation constitution of any Committee to monitor the activities isnot feasible and hence not constituted.

16. EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return prepared in Form MGT-9 in pursuance of Section 92of the Companies Act 2013 is annexed and forms part of this Report.

17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

Given the nature of business being retailing providing information with regard toconservation of energy and technology absorption as required under Section 134 of theCompanies Act 2013 and the Rules thereunder and hence information in this regard is notrequired to be furnished. Further the Company neither used nor earned any foreignexchange during the year under report.

18. CORPORATE SOCIAL RESPONSIBILITY

In the absence of any commercial activity for the last several years and the hugeaccumulated losses being suffered by the Company the Company has not been able to take upany project as part of Corporate Social Responsibility and hence disclosures thereon incompliance of the provisions of clause (o) of Section 134(3) of the Companies Act 2013read together with Rule 9 of the Companies (Corporate Social Responsibility) Rules 2014have not been made.

19. DIRECTORS

Mr.S.K.Nandi retires by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for reappointment.

20. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year 2014-2015 the Board of Directors met four times viz. on 30thMay 2014; 14th August 2014 14th November 2014 and 31stJanuary 2015.

21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 TheCompany has not granted any loans secured or unsecuredtocompaniesfirms or other partiescovered in the register maintained under Section 189 of the Companies Act 2013 and henceno information is required to be furnished.

Details of investments in all bodies corporate are given in Note 8 in the FinancialStatements.

22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has not entered into any contract with any related party.

23. MANAGERIAL REMUNERATION

The Company has not paid remuneration to the Key Managerial Personnel.

24. COST AUDIT REPORT

Given the nature of the Company’s activities the provisions relating tosubmission of Cost Auditors’ Report do not apply to the Company.

25. CORPORATE GOVERNANCE

A report on Corporate Governance is included as a part of this

Annual Reportalongwith certificatefrom the Company’s Auditors.

26. PARTICULARS OF EMPLOYEES

During the year under report there was no employee of the category mentioned inSection 134 and the Rules thereunder and hence information in this regard is not requiredto be furnished.

27. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act 2013 the Directors herebyconfirm that:

1. In the preparation of the Annual Accounts the applicable accounting standards havebeen followed;

2. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your Company at the end of the financial year covered underthis Report and of the profit of your Company for the year;

3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities;

4. The Annual Accounts have been prepared on a going concern basis.

5. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.

6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.

28. ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation of thedevoted and diligent services rendered by personnel of Associate Companies at all levelsand the cooperation extended by them. The Board also wishes to place on record itsgratitude to the Company’s Bankers.

FOR AND ON BEHALF OF THE BOARD

S.K.NANDI V.M.SATYAN
Mumbai DIRECTOR DIRECTOR
Dated: 14th August 2015 DIN: 00075702 DIN: 00076016

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