To the Members of the Company
Your Directors have pleasure in presenting the 35th Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2017. The Financial Results of the Company are summarized below:
(Rs. In Lacs)
|PARTICULARS ||YEAR ENDED 31st MARCH 2017 ||YEAR ENDED 31st MARCH 2016 |
|Income from Operations ||543.06 ||450.82 |
|Profit Before Depreciation and Taxes ||282.99 ||301.12 |
|Less: Depreciation ||(0.59) ||(1.15) |
|Less : Provision for : || || |
|(a) Income tax ||(88.49) ||(76.68) |
|(b) Deferred tax ||-- ||-- |
|Income Tax paid of Earlier years ||(0.56) ||(1.64) |
|Provisions for Loans & Advances || ||-- |
|Profit for the Year ||194.47 ||224.93 |
|Add: Brought forward from last year ||518.71 ||364.81 |
|Distributable Profits ||713.19 ||589.74 |
|Appropriated as under: || || |
|Transfer to Special Reserve ||(38.89) ||(44.99) |
|Proposed Equity Dividend ||(21.70) ||(21.70) |
|Tax on Distributed Profits ||(4.42) ||(4.34) |
|Balance Carried Forward to Balance sheet ||648.18 ||518.71 |
Your directors are pleased to recommend the dividend for the financial year 2016-17 onEquity Shares of Rs.10/- each at Re 0.20 paise per equity share equivalent to 2% of thepaid up share capital of the Company aggregating to Rs. 2170260/- (Rupees Twenty OneLakhs Seventy thousand Two Hundred and Sixty Only)
Income from operations stood at Rs. 543.06 lacs for fiscal 2017 i.e. a 20.46%increase on year on year (YOY) basis
Profit before taxes for fiscal 2017 is Rs. 282.40 lacs
Profit after taxes for fiscal 2017 is Rs. 194.47 lacs
Basic earning per share for fiscal 2017 was Rs. 1.79 per share DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association Mrs. Annu Agrawal Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible offers herself for reappointment.
In accordance with the provisions of Sections 196 197 203 and Schedule V of theCompanies Act 2013 read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 Mr. Bharat N. Shiroya Managing Director of the Company whoseterm is going to be expiring on 1st October 2017. Hence Board of Directors in the Boardmeeting held on 5th August 2017 subject to approval of the members had approved hisreappointment for further period of 3 years w.e.f. forthcoming Annual General Meeting.
All independent directors have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force).
All the directors of the Company have confirmed that they are not disqualified frombeing appointed as directors in terms of Section 164 of the Companies Act 2013.
A brief resume and other details as stipulated under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. For the above director seeking re-appointmentis given as Additional Information on Directors which forms part of the Notice.
(i) Board Evaluation
Board Evaluation Pursuant to the provisions of the Companies Act 2013 and Regulation27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution and independence of judgment thereby safeguarding the interestof the Company. The performance evaluation of the Independent Directors was carried out bythe entire Board. The performance evaluation of the Chairman and the Non IndependentDirectors was carried out by the Independent Directors. The board also carried out annualperformance evaluation of the working of its Audit Nomination and Remuneration as well asStakeholders Relationship Committee. The Directors expressed their satisfaction with theevaluation process.
(ii) Details of Board Meetings held
During the year four Board Meetings and one Independent Directors' meeting were held.The details of the meetings and attendance thereof have been given in Corporate GovernanceReport. The provisions of Companies Act 2013 and Regulation 27 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 were adhered to whileconsidering the time gap between two meetings.
(iii) Constitution of Committees
As per the Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has constituted an Audit Committee Nomination &Remuneration Committee and a Stakeholders Relationship Committee the details of whichhave been mentioned in the Corporate Governance Report.
DETAILS OF KEY MANAGERIAL PERSONNEL
The Company has appointed Mr. Kirit Dharod as Company Secretary & ComplianceOfficer of the Company with effect from 11th February 2017.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement clause (c) of subsection (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
1. That in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standard had been followed along with properexplanation relating to material departures.
2. That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for the year under review.
3. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provision of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
4. That the directors had prepared the accounts for the financial year ended 31stMarch 2017 on a going concern basis.
5. That the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
(i) Statutory Auditors
The Statutory Auditors of the Company M/s. Bansal Bansal & Co. CharteredAccountants Mumbai whose term is expiring at the forthcoming Annual General Meeting.Hence the Board of Directors based on the recommendation of the Audit Committee at itsmeeting held on 5th August 2017 proposed the appointment of M/s A.R. Sodha& Co. Chartered Accountants (Firm Registration No. 110324W) as the StatutoryAuditors of the Company for a period of five years to hold office from the conclusion ofthis AGM till the conclusion of the Fortieth Annual General Meeting of the Company to beheld in the calendar year 2022 subject to ratification of their appointment at everyAnnual General Meeting if so required under the Act.
(ii) Secretarial Auditors
Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act 2013read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014 and as ameasure of good Corporate Governance practice the Board of Directors of the Companyhereby appointed M/s. R M Mimani & Associates LLP Practising Company Secretaries asSecretarial Auditors of the Company for the Financial Year 2016-17. The report of theSecretarial Auditors is enclosed as Annexure - 3 to this report.
(iii) Internal Auditors
M/S SARA & Associates has performed their duties as an Internal Auditors of thecompany for the F.Y 2016-17 and their report is reviewed by the Audit Committee from timeto time. Further Board of Directors of the Company has appointed M/s. SARA &Associates as an Internal Auditors of the company for the F.Y 2017-18.
COMMENTS ON AUDITOR'S REPORT
(i) Statutory Auditors
As regards exposure norms of RBI for a single borrower the limit has exceeded of oneof the Borrower in the previous year and the said exposure is secured which is more thansufficient to cover the entire amount due from the borrower and the management isconfident of realizing these dues.
(ii) Secretarial Auditors
With regard to point no. (i) and (iii)
The Companies Act 2013 aims to ensure transparency in the transactions and dealingswith the related parties of the Company. The provisions of Section 188(1) of the CompaniesAct 2013 read with Regulation 23 of SEBi (Listing Obligations and DisclosureRequirements) Regulations 2015 that govern the Related Party Transactions requires thatfor entering into any contract or arrangement with the related party the Company shallobtain prior approval of the Board of Directors and prior approval of the shareholders byway of an Special Resolution even though the said transactions is in the ordinary courseof business but not at arm's length price or exceeding the prescribed limits. Although weare registered Non Banking Finance Company (NBFC) registered with Reserve Bank of IndiaKolkata and in the normal course of business and to have more transparency in relatedparties' transactions the Board is seeking shareholders' approval / ratification for thesaid transaction.
Since your Company is registered Non Banking Finance Company (NBFC) and in the ordinarycourse of business it has availed the loan from M/s ANAND RATHI GLOBAL FINANCE lTd oncorporate guarantee given by one of group company M/s Comfort Intech Limited. Since theguarantee value is the material transaction in the nature. Therefore The company is goingto take the approval/ratification of the members in the forthcoming annual general meetingto be held on 9th September 2017.
Further the company is also in the process of filing returns under section 117 ofCompanies Act 2013.
With regards to point no. (ii) i.e. continuing the violation of the RBI norms withregard to exposure norms of RBI for a single borrower the limit has exceeded of one ofthe Borrower in the previous year and the said exposure is secured which is more thansufficient to cover the entire amount due from the borrower and the management isconfident of realizing these dues.
The Company is not required to undertake the Cost Audit as required under Section 148of the Companies Act 2013. WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Vigil Mechanism named Whistle Blower Policy' to deal withinstances of fraud and mismanagement if any. The Board has adopted a Whistle BlowerPolicy which is in compliance with the provisions of Section 177(10) of the Companies Act2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 to promote reporting of any unethical or improper practice or violationof the company's Code of Conduct or complaints regarding accounting auditing internalcontrols or disclosure practices of the company. It gives a platform to the Whistle Blowerto report any unethical or improper practice (not necessarily violation of law) and todefine processes for receiving and investigating complaints. The Vigil Mechanism Policyhas been uploaded on the website of the Company at www.comfortfincap.com.
RELATED PARTY TRANSACTIONS
All related party transactions except one that were entered during the financial yearwere at an arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the company with promotersdirectors key managerial personnel or other designated persons which may have a potentialconflict with the interest of the company at large. All related party transactions areplaced before the Audit Committee for approval. Prior omnibus approval of the AuditCommittee is obtained on a quarterly basis for the transactions which are of a foreseenand repetitive nature. The transactions entered into pursuant to the omnibus approval sogranted and a statement giving details of all related party transactions is placed beforethe Audit Committee for their approval on a quarterly basis. The policy on Related PartyTransactions as approved by the Board is uploaded on the company's website atwww.comfortfincap. com. Related party transactions under Accounting Standard - 18 aredisclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant toclause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules 2014 is furnished as Annexure- 2 to this report.
NOMINATION & REMUNERATION POLICY
The Board of Directors of your Company has on recommendation of the Nomination &Remuneration Committee framed and adopted a policy for selection and appointment ofDirectors Senior Management and their remuneration. The contents of the policy are statedin the Corporate Governance Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The company does not have holding or subsidiary companies during the year and no othercompany has become holding / subsidiary/ joint venture. However it has one associatecompany details are as under:
|Sr. Name of the Company No. ||CIN/GLN ||CONCERN ||% of shares held by Company ||Applicable Section |
|1 Lemonade Shares & Securities Pvt Ltd. ||U67100MH2010PTC205455 ||Associate Company ||46.81 ||2(6) |
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31stMarch 2017 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act 2013read with Companies (Management and Administration) Rules 2014 are set out herewith asAnnexure- 5 to this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantees and investments under the provisions of Section 186 of theCompanies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014 as on 31st March 2017 are given in the notes to the FinancialStatements.
CODE OF CONDUCT
The Board has laid down a code of conduct for Board Members and Senior Managementpersonnel of the Company. The code incorporates the duties of Independent Directors aslaid down in the Companies Act 2013. The said code of conduct is posted on Company'swebsite www.comfortfincap.com. The Board Members and Senior Management Personnel haveaffirmed compliance with the said code of conduct. A declaration signed by the ChiefFinancial Officer is given at the end of the Corporate Governance Report.
PREVENTION OF INSIDER TRADING
The Company has also adopted a code of conduct for prevention of insider trading. Allthe Directors Senior Management employees and other employees who have access to theunpublished price sensitive information of the Company are governed by this code.
During the year under Report there has been due compliance with the said code ofconduct for prevention of insider trading.
The Board has already adopted a revised Code of Prevention of Insider Trading based onthe SEBI (Prohibition of Insider Trading) Regulations 2015. The same has been placed onthe website of the Company www.comfortfincap.com.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP)
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is furnished hereunder:
|Sr. Name of the Director/ KMP No ||Designation ||Remuneration 2016-17 ||Remuneration 2015-16 ||Increase/ Decrease ||Ratio / Times per median of employee remuneration |
|1 Mr. Bharat Shiroya ||Managing Director ||Rs 1222037/- ||Nil ||Rs 1222037/- ||0.53 |
|2 Mr. Anil Agrawal ||Director ||Nil ||Rs 361667/- ||-Rs 361667/- ||-1.80 |
|3 Mrs. Nirmala Kanjar ||CFO ||Rs 792395/- ||Rs 675697/- ||+Rs 116698/- ||0.82 |
|4 Mr. Kirit Dharod* ||Company Secretary ||Rs 101840/- ||N.A ||Rs 101840/- ||7.42 |
* Mr. Kirit Dharod has been appointed as Company Secretary & Compliance Officer ofthe Company w.e.f. 11th February 2017.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The Internal Auditors of the company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.The Company continues to ensure proper and adequate systems and procedures to commensuratewith its size and nature of its business.
BUSINESS RISK MANAGEMENT
The company has been addressing various risks impacting the company and the policy ofthe company on risk management forming the part of annual report in Management Discussionand Analysis.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT
The Management Discussion and Analysis for the year 2016-17 and a detailed report onCorporate Governance as required under Regulation 27 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 executed with the Stock Exchanges are given inseparate sections forming part of the Annual Report.
A Certificate from Statutory Auditors of the company M/s. Bansal Bansal & Co.confirming compliance with the conditions of Corporate Governance stipulated in Regulation27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isAnnexure- 4 to this Report.
PARTICULARS OF EMPOLYEES UNDER SECTION 197 OF THE COMPANIES ACT 2013
The provisions of Section 197 of the Companies Act 2013 (the Act') read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notapplicable to the company as there are no employees whose remuneration is in excess ofthe limits prescribed.
The Equity Shares of the Company are presently listed at BSE Ltd and Calcutta StockExchange Limited. The company is regular in payment of listing fees.
CASH FLOW STATEMENT
In conformity with the provisions of Regulation 34(2)(c) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and requirements of CompaniesAct 2013 the Cash Flow Statement for the year ended 31st March 2017 isannexed hereto as a part of the Financial Statements.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of section 134(3)(m) of the Companies Act2013 read with the Companies [Accounts] Rules 2014 regarding conservation of energytechnology absorption and foreign exchange earning and outgo is given in Annexure - 1 tothis Report.
DISCLOSURE - ANTI SEXUAL HARASSMENT POLICY
The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted a policy in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules there under.All employees (permanent contractual temporary trainees) are covered under the saidpolicy. An Internal Complaints Committee has also been set up to redress complaintsreceived on sexual harassment.
During the financial year under review the Company has not received any complaints ofsexual harassment from any of the women employees of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
As intimated earlier your Company has received an Ex-Parte Ad Interim Order dated 19thDecember 2014 passed by the Securities and Exchange Board of India (SEBI) under section11(1) 11(4) and 11B of the Securities and Exchange Board of India Act 1992 in the matterof First Financial Services Limited for not accessing the capital market. However YourCompany has received Interim reliefs in this regard from SEBI vide letters dated 7thJanuary 2016 and 15th January 2016 respectively.
Further your Company has received the Final Order from Securities and Exchange Boardof India (SEBI) dated 2nd June 2016 in conformity with the interim order dated19th December 2014. However your Company has filed an Appeal with SecuritiesAppellate Tribunal (SAT) Mumbai on 1st July 2016 in this regard. The matteris under process. However Your Company has received Interim reliefs in this regard fromSEBI vide order dated 25th August 2016.
Except above no significant or material order has been passed by any regulatortribunal or court which would impact the going concern status of the Company and itsfuture operations.
Your directors place on record their gratitude for the continued co-operation andguidance extended by the Securities and Exchange Board of India Reserve Bank of IndiaBSE Limited Calcutta Stock Exchange Limited and take this opportunity to place on recordtheir warm appreciation of the valuable contribution unstinted efforts and the spirit ofdedication by the employees and officers at all levels in the progress of the Companyduring the year under review.
Your directors also express their deep gratitude for the assistance co-operation andsupport extended to your company by the bankers customers as well as the investingcommunity and look forward to their continued support.
| || |
FOR AND ON BEHALF OF THE BOARD
| ||Sd/- ||Sd/- |
| ||Bharat Shiroya ||Anil Agrawal |
| ||Managing Director ||Director |
|Place : Mumbai || || |
|Date : 5th August 2017 || || |