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Comfort Fincap Ltd.

BSE: 535267 Sector: Financials
NSE: N.A. ISIN Code: INE274M01018
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OPEN 14.20
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VOLUME 3906
52-Week high 14.94
52-Week low 11.65
P/E 6.24
Mkt Cap.(Rs cr) 15.30
Buy Price 14.05
Buy Qty 32.00
Sell Price 14.10
Sell Qty 59.00
OPEN 14.20
CLOSE 14.22
VOLUME 3906
52-Week high 14.94
52-Week low 11.65
P/E 6.24
Mkt Cap.(Rs cr) 15.30
Buy Price 14.05
Buy Qty 32.00
Sell Price 14.10
Sell Qty 59.00

Comfort Fincap Ltd. (COMFORTFINCAP) - Director Report

Company director report

To the Members of the Company

Your Directors have pleasure in presenting the 34th Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2016. The financial results of the Company are summarized below:

FINANCIAL RESULTS

DIVIDEND

Your directors are pleased to recommend the dividend for the financial year 2015-16 onEquity Shares of Rs.10/- each at 0.20 paise per equity share equivalent to 2% of the paidup share capital of the Company aggregating to Rs. 2170260/- (Rupees Twenty One LakhsSeventy thousand Two Hundred and Sixty Only)

FINANCIAL HIGHLIGHTS

• Income from operations stood at Rs. 450.82 lacs for fiscal 2016 i.e. a 13.20%increase on Year on Year (YOY) basis

• Profit before taxes for fiscal 2016 is Rs. 299.97 lacs

• Profit after taxes for fiscal 2016 is Rs. 224.93 lacs

• Basic earning per share for fiscal 2016 was Rs. 2.07 per share

DIRECTORS

Pursuant to the provisions of Section 161(1) of the Companies Act 2013 (the‘Act’) and the Articles of Association of the Company the Board of Directors ofyour Company appointed Mr. Devendra Lal Thakur as an Additional Director (Non-Executive& Independent) of the Company effective 24th November 2015 and he shallhold office ensuing Annual General Meeting. The Company has received declarations from Mr.Devendra Lal Thakur confirming that he meets with the criteria of independence asprescribed both under sub-section (6) of Section 149 of the Act and under Regulation 27 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with theStock Exchanges. Further a notice has been received from a Member as required underSection 160 of the Act signifying his intention to propose the candidature of Mr.Devendra Lal Thakur for the office of Director.

Mr. Sushil Jain resigned from the Board with effect from 24th November 2015 due to hispersonal reason. The Board records its sincere appreciation and gratitude for the servicesrendered and guidance provided by him.

To the Members of the Company

Your Directors have pleasure in presenting the 34th Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2016. The financial results of the Company are summarized below:

FINANCIAL RESULTS

(Rs. In Lacs)
PARTICULARS YEAR ENDED 31ST MARCH 2016 YEAR ENDED 31ST MARCH 2015
Income from Operations 450.82 398.25
Profit Before Depreciation and Taxes 301.12 266.34
Less: Depreciation (1.15) (1.76)
Less : Provision for :
(a) Income tax (76.68) (56.76)
(b) Deferred tax - -
Income Tax paid of Earlier years (1.64) 0.59
Provisions for Loans & Advances - -
Profit for the Year 224.93 207.24
Add: Brought forward from last year 364.81 225.06
Distributable Profits 589.74 432.30
Appropriated as under:
Transfer to Special Reserve (44.99) (41.45)
Proposed Equity Dividend (21.70) (21.70)
Tax on Distributed Profits (4.34) (4.34)
Balance Carried Forward to Balance sheet 518.71 364.81

DIVIDEND

Your directors are pleased to recommend the dividend for the financial year 2015-16 onEquity Shares of Rs.10/- each at 0.20 paise per equity share equivalent to 2% of the paidup share capital of the Company aggregating to Rs. 2170260/- (Rupees Twenty One LakhsSeventy thousand Two Hundred and Sixty Only)

FINANCIAL HIGHLIGHTS

Income from operations stood at Rs. 450.82 lacs for fiscal 2016 i.e. a 13.20% increaseon Year on Year (YOY) basis

Profit before taxes for fiscal 2016 is Rs. 299.97 lacs

Profit after taxes for fiscal 2016 is Rs. 224.93 lacs

Basic earning per share for fiscal 2016 was Rs. 2.07 per share

DIRECTORS

Pursuant to the provisions of Section 161(1) of the Companies Act 2013 (the‘Act’) and the Articles of Association of the Company the Board of Directors ofyour Company appointed Mr. Devendra Lal Thakur as an Additional Director (Non-Executive& Independent) of the Company effective 24th November 2015 and he shallhold office ensuing Annual General Meeting. The Company has received declarations from Mr.Devendra Lal Thakur confirming that he meets with the criteria of independence asprescribed both under sub-section (6) of Section 149 of the Act and under Regulation 27 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with theStock Exchanges. Further a notice has been received from a Member as required underSection 160 of the Act signifying his intention to propose the candidature of Mr.Devendra Lal Thakur for the office of Director.

Mr. Sushil Jain resigned from the Board with effect from 24th November 2015 due to hispersonal reason. The Board records its sincere appreciation and gratitude for the servicesrendered and guidance provided by him.

In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association Mr. Anil Agrawal Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment.

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 Obligation andDisclosure Requirement) 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 asStakeholder Relationship Committee. The Directors expressed their satisfaction with theevaluation process.

(ii) Details of Board Meetings held

During the year six Board Meetings and one Independent Directors’ meeting wereheld. The details of the meetings and attendance thereof have been given in CorporateGovernance Report. The provisions of Companie Act 2013 and Regulation 27 of the SEBI(Listing Obligations 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

Your Company has appointed Mr. Bharat Shiroya as Managing Director for a period of 3years w.e.f. 1st October 2014. Further Ms. Kalpita Keluskar had resigned from the officeof Company Secretary & Compliance Officer with effect from 7th November2015 due to personal reason. The Board records its sincere appreciation and gratitude forthe services rendered and guidance provided by her.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of 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 2016 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 2016 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.

AUDITORS

(i) Statutory Auditors

The retiring auditors namely M/s. Bansal Bansal & Co. Chartered AccountantsMumbai hold office until the conclusion of the forthcoming Annual General Meeting.

(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 Practicing Company Secretaries asSecretarial Auditors of the Company for the Financial Year 2015-16. The report of theSecretarial Auditors is enclosed as Annexure 3 to this report.

(iii) Internal Auditors

M/S SARA & Associates performs the duties of Internal Auditors of the company forFinancial Year 2015-16 and their report is reviewed by the Audit Committee from time totime.

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 and the management is confident of realizing these dues.

(ii) Secretarial Auditors

With regard to point no. (i) i.e not fully complied with the provisions of Section 203of the Companies Act 2013 with regard to the appointment of Key Managerial Personnel(KMP) during the year the Company Secretary of the Company has resigned from the Officeof Key Managerial Person. Howeverthe company is under proccess to make suitable effortsfor the recruitment of candidate for the post of company secretary.

With regard to point no. (ii) i.e Regulation 46 of the SEBI (Listing Obligations andDisclosure Requirements)Regulations 2015 with regard to maintenance of functionalwebsite it is due to technical reasons and the company is in the process of redesigningthe entire website of the company according to the Companies Act 2013 as well as the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Company is in theprocess to update the same.

With regards to point no. (iii) 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 thansufficientto cover the entire amount due from the borrower and the management is confidentof realizing these dues.

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 theCompany has received some Interim reliefs in this regard from SEBI vide their lettersdated 7th January 2016 & 15th January 2016 respectively.

Further the Company has received the Final Order from Securities and Exchange Board ofIndia (SEBI) dated 2nd June 2016 in conformity with the interim order dated19th December 2014. However your Company has filed an Appeal with Securities AppellateTribunal (SAT) Mumbai on 1st July 2016 in this regard. The matter is underprocess.

COST AUDIT

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 auditinginternal controls or disclosure practices of the company. It gives a platform to theWhistle Blower to report any unethical or improper practice (not necessarily violation oflaw) and to define processes for receiving and investigating complaints. The VigilMechanism Policy has been uploaded on the website of the Company at www.comfortfincap.com.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered during the financial ordinary courseof business. There are no materially significant related party transactions made by thecompany with promoters directors key managerial personnel or other designated personswhich may have a potential conflict with the interest of the company at large. All relatedparty transactions are placed before the Audit Committee for approval. Prior omnibusapproval of the Audit Committee is obtained on a quarterly basis for the transactionswhich are of a foreseen and repetitive nature. The transactions entered into pursuant tothe omnibus approval so granted and a statement giving details of all related partytransactions is placed before the Audit Committee for their approval on a quarterly basis.The policy on Related Party Transactions as approved by the Board is uploaded on thecompany’s website at www.comfortfincap. com. Related party transactions underAccounting Standard - 18 are disclosed in the notes to the financial statements.Prescribed Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014 is furnished as Annexure 2to 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.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31stMarch 2016 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 as Annexure5to this report.

ADOPTION OF NEW ARTICLES OF ASSOCIATION OF YOUR COMPANY

During the financial year 2015-16 new set of Articles of Association of your Companywere adopted in accordance with the provisions of the Companies Act 2013 read with theRules issued thereunder.

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 2016 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 BoardMembers 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. No Name of the Director/ KMP Designation Remuneration 2015-16 Remuneration 2014-15 Increase/ Decrease Ratio / Times per median of employee remuneration
1 Mr. Bharat Shiroya Managing Director Nil Nil Nil -
2 Mr. Anil Agrawal Director Rs 361667/- Nil +Rs 361667/- 0.66
3 Mrs. Nirmala Kanjar CFO Rs 675697/- Rs. 573338/- +Rs 102359/- 1.24
4 Ms. Kalpita Keluskar* Company Secretary Rs 233440 Rs. 89323/- +Rs 144117/- 0.43

* Ms. Kalpita Keluskar has ceased her office as Company Secretary & ComplianceOfficer of the Company w.e.f.7 th November 2015.

POSTAL BALLOT

A Postal Ballot pursuant to Section 110 of the Companies Act 2013 was conducted by theCompany in the Financial Year 2015-16 for

1. To shift the Registered Office from Kolkata State of West Bengal to Mumbai State ofMaharashtra and consequential amendment in Clause II of the Memorandum of Association;

2. To keep Registers Copies of Returns etc. at Corporate Office of the Company atMumbai (i.e. at a place other than Registered Office);

3. Adoption of new set of Articles of Association of Company inter-alia pursuant to theCompanies Act 2013.

Mr. Bharat Shiroya Managing Director of the Company was authorised to issue notice ofthe Postal Ballot and conduct the Postal Ballot procedure. For this Mr. Nikunj KanodiaPractising Chartered Accountants Kolkata was appointed as scrutinizer for conducting thee-voting process and postal ballot voting process in a fair and transparent manner. Basedon the report of the Scrutinizer dated 25th July 2015 the Managing Director has declaredthe results on the Voting by Postal Ballot conducted pursuant to Section 110 of theCompanies Act 2013 read with Companies (Management and Administration Rule) 2013. ThePostal Ballot results have been uploaded on the website of the Company atwww.comfortfincap.com. Brief details of the businesses were approved by the Members asgiven at the end of the Corporate Governance Report.

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 part of annual report in Management Discussion andAnalysis.

PUBLIC DEPOSITS

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 2015-16 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.

Auditors Certificate of the company M/s. Bansal Bansal & Co. confirmingcompliance with the conditions of Corporate Governance stipulated in Regulation 27 of theSEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is Annexure– 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’) readwith the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 arenot applicable to the company as there are no employees whose remuneration is in excessof the limits prescribed.

LISTING

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 2016 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 earnings and outgo is given in Annexure– 1 to this 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 notreceived any complaints of sexual harassment from any of the women employees of theCompany.

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) undersection 11(1) 11(4) and 11B of the Securities and Exchange Board of India Act 1992 inthe matter of First Financial Services Limited for not accessing the capital market.However Your Company has received Interim reliefs in this regard from SEBI vide lettersdated 7th January 2016 and 15th January 2016 respectively.

Further your Company has received the Final Order from Securities and Exchange Board ofIndia (SEBI) dated 2ndJune 2016 in conformity with the interim order dated 19thDecember 2014. However your Company has filed an Appeal with Securities AppellateTribunal (SAT) Mumbai on 1st July 2016 in this regard. The matter is underprocess. or material orders has been passed by any regulator tribunal or court whichwould impact the Exceptabovenosignificant going concern status of the Company and itsfuture operations.

ADOPTION OF VARIOUS POLICIES

The Board of Directors of the Company has approved and adopted various policies asrequired under Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

ACKNOWLEDGEMENT

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 India BSE Limited Calcutta Stock ExchangeLimited and take this opportunity to place on record their warm appreciation of thevaluable contribution unstinted efforts and the spirit of dedication by the employees andofficers at all levels in the progress of the Company during 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 : 6th August 2016

ANNEXURE-1 TO DIRECTORS’ REPORT

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

ENERGY CONSERVATION : NA TECHNOLOGY OBSERVATION : NA

Foreign Exchange Earnings and outgo: Amount in Rs.
Foreign exchange used Nil
Foreign exchange earned Nil

ANNEXURE-2 TO DIRECTORS’ REPORT

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arms lengthtransactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm’s lengthbasis

There is no such Transaction which is not on arm’s length basis

2. Details of material contracts or arrangement or transactions at arm’s lengthbasis

(a) Name(s) of the related party and nature of relationship Comfort Securities Ltd Group Company Anil Agrawal HUF Promoters and their relatives Annu Agrawal Promoters and their relatives Deepika Agrawal Relative of Promoter who is under employment of the Company Anil Agrawal Promoters and their relatives
(b) Nature of contracts/ arrangements/ transactions Brokerage & Demat Charges Rent Paid Rent Paid Remuneration Remuneration
(c) Duration of the contracts / arrangements/ transactions - - - - -
(d) Salient terms of the contracts or arrangements or transactions including the value if any: Rs. 1364/- Rs. 120000/- Rs. 120000/- Rs. 840000/- Rs. 361667/-
(e) Date(s) of approval by the Board if any: (f) Amount paid as advances if any: In the normal course of business - In the normal course of business - In the normal course of business - In the normal course of business - In the normal course of business -

 

By Order of the Board
Sd/-
Place: Mumbai Bharat Shiroya
Date: 6th August 2016 Managing Director

ANNEXURE-3 TO DIRECTORS’ REPORT

Form No. MR.3

Secretarial Audit Report for the financial year ended on March 31 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and the Rule 9 of the companies(Appointment and remuneration of managerial personnel) Rule 2014] To

The Members

Comfort Fincap Limited

Mumbai

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Comfort Fincap Limited(hereinafter called the "Company"). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our verification of the books papers minute books forms and returns filedCompany and also the information provided by the Company its officers agents andauthorized representatives during the conduct of secretarial audit we hereby report thatin our opinion the Company has during the audit period covering the financial year endedon March 31 2016 complied with the statutory provisions listed hereunder and also thatthe Company has proper Board-processes and compliance-mechanism in place to the extent inthe manner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filedand otherrecords maintained by the Company for the financial year ended on March 31 2016 accordingto the provisions of: I. The Companies Act 2013 (the Act) and the Rules madethere-under;

II. The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and theRules made there-under; III. The Depositories Act 1996 and the Regulations and bye-lawsframed there-under;

IV. Foreign Exchange Management Act 1999 and the Rules and Regulations madethere-under to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings; V. The following Regulations and Guidelines prescribedunder the Securities and Exchange Board of India Act 1992(‘SEBI Act’) tothe extent applicable to the Company; a. The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers)Regulations2011; b. The Securities andExchange Board of India (Prohibition of Insider Trading) Regulations 2015; c. TheSecurities and Exchange Board of India (Issue of Capital and DisclosureRequirements)Regulations 2009; d. The Securities and Exchange Board of India (Registrarsto an Issue and Share Transfer Agents)Regulations1993 regarding the Companies Act anddealing with client;

VI. Other law applicable specifically to the Company as detailed below; i. The ReserveBank of India Act 1934 ii. Rules regulation and guidelines issued by the Reserve Bank ofIndia as are applicable to the Non Banking Financial Company (NBFC)

We have also examined compliance with the applicable clauses of the following; (i)Secretarial Standards issued by The Institute of Company Secretaries of India

(ii) The SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015 (iii)The listing agreement entered into by the Company with Stock Exchanges in India.

We report that during the financial year under review the Company has complied withthe provisions of the Act rules regulations guidelines as mentioned above subject tothe following: (i) The Company has not fully complied with the provision of section 203 ofthe Companies Act 2013 with regard to the appointment of Key Managerial Personnel (KMP).

(ii) The Company has not fully complied with the regulation 46 of the SEBI (Listingobligation and Disclosure Requirements) Regulation 2015 with regard to maintenance offunctional website.

(iii) The Company is continuing with violation of the RBI norms on loan exposure to asingle entity during the financial year.

We further report that there was no action/event in pursuance of; a) The Securitiesand Exchange Board of India (Delisting of Equity Shares) Regulations 2009; and b) TheSecurities and Exchange Board of India (Buyback of Securities) Regulations 1998; c) TheSecurities and Exchange Board of India (Issue of Debt Securities) Regulations 2008 d) TheSecurities and Exchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines 1999

We have relied on the representation made by the Company and its Officers for systemsand mechanism formed by the Company and test verification on random basis carried out forcompliances under other applicable Acts Laws and Regulations to the Company

The compliance by the Company of the applicable direct tax laws indirect tax laws andother financial reviewed in this Audit since the same have been subject to review by theother designated professionals and being relied on the reports given by such designatedprofessionals.

We further report that based on the information provided and representation made bythe Company and also on the review of compliance reports of the respective departmentheads/Company Secretary/CFO taken on record by the Board of Directors of the Company inour opinion adequate system and process exits in the company commensurate with the sizeand operations of the Company to monitor and ensure compliance with the applicable generallaws like labour laws competition law and environmental laws.

We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent generally at least seven days in advance and in viewof the non-existence formal system we are not in position to comment on existence ofsystem for seeking and obtaining further information and clarifications on the agendaitems before the meeting and for meaningful participation at the meeting.

As per the minutes of the meeting duly recorded and signed by the Chairman majoritydecision carried through while the dissenting members’ views are captured andrecorded as part of the minutes.

We further report that during the financial year the specific events/actions that cancontinue have major bearing on the company are as under:

Securities and Exchange Board of India (SEBI) vide its interim order dated December 192014 passed under section 11 and 11B has barred the Company and one of its promoters groupfrom accessing the capital Market which was confirmed subsequently vide order dated June02 2016.

For R M MIMANI & ASSOCIATES LLP

[COMPANY SECRETARIES]

Sd/-

RANJANA MIMANI (PARTNER)

FCS No: 6271 CP No : 4234

Place: Mumbai

Date: August 06 2016

Note: This report is to be read with our letter of even date which is annexed as"Annexure A" and forms and integral part of this report.

Annexure – "A"

To

The Members

Comfort Fincap Limited

Mumbai

Our Secretarial Audit Report of even date is to be read along with this letter;

1. Maintenance of secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit;

2. We have followed the audit practices and the processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion;

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company;

4. Where ever required we have obtained the Management Representation about thecompliance of laws rules and regulation and happening of events etc.;

5. The compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedure on test basis;

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy effectiveness with which the management has conducted theaffairs of the Company.

For R M MIMANI & ASSOCIATES LLP

[COMPANY SECRETARIES]

Sd/-

RANJANA MIMANI (PARTNER)

FCS No: 6271 CP No : 4234

Place: Mumbai

Date: August 06 2016

ANNEXURE-4 TO DIRECTORS’ REPORT

AUDITORS’ REPORT ON CORPORATE GOVERNANCE

To

The Members

COMFORT FINCAP LTD.

We have examined the compliance of conditions of Corporate Governance by Comfort FincapLtd. for the year ended on 31st March 2016 as stipulated in regulations 1718 19 20 21 22 23 24 25 26 27 and clauses (b) to (i) of sub-regulation (2) ofregulation 46 and para C D and E of Schedule V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (collectivelyreferred to as the SEBI Listing Regulations 2015) of the said Company with StockExchanges.

The compliance of conditions of Corporate Governance is the responsibility of theCompany’s Management. Our examination was carried out in accordance with the GuidanceNote on Certification of Corporate Governance issued by the Institute of CharteredAccountants of India and was limited to procedures and implementation thereof adopted bythe Company for ensuring the compliance of the conditions of Corporate Governance. It isneither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 except for regulation 46 as the website is currently under development.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the management hasconducted the affairs of the Company.

For BANSAL & BANSAL & CO.

Chartered Accountants FRN: 100986W

Sd/-Jatin Bansal

Partner

Membership No.: 135399

Place : Mumbai

Date : 6th August 2016

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