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Comfort Intech Ltd.

BSE: 531216 Sector: Financials
NSE: N.A. ISIN Code: INE819A01023
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VOLUME 6630
52-Week high 1.61
52-Week low 0.61
P/E 10.11
Mkt Cap.(Rs cr) 29.11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 0.93
CLOSE 0.95
VOLUME 6630
52-Week high 1.61
52-Week low 0.61
P/E 10.11
Mkt Cap.(Rs cr) 29.11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Comfort Intech Ltd. (COMFORTINTECH) - Director Report

Company director report

To the Members of the Company

Your Directors have pleasure in presenting the Twenty-First Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2015. The financial results of the Company are summarized below:

FINANCIAL RESULTS:

PARTICULARS STANDALONE YEAR ENDED 31ST MARCH 2015 STANDALONE YEAR ENDED 31ST MARCH 2014 CONSOLI- DATED YEAR ENDED 31ST MARCH 2015 CONSOLI- DATED YEAR ENDED 31ST MARCH 2014
Total Revenue 1408.46 1155.26 1425.74 1231.55
Profit Before Depreciation and Taxes 594.68 (307.65) 553.69 (280.60)
Less: Depreciation 17.64 10.51 17.64 10.51
Less : Provision for
(a) Income Tax 25.66 32.86 25.66 32.86
(b) Deferred tax (3.54) (0.35) (3.54) (0.35)
Income Tax paid of earlier years 1.20 (0.41) 1.20 (0.41)
Total Tax Expenses 23.32 32.00 23.32 32.00
Profit / (loss) for the Year 553.72 (350.26) 512.73 (323.22)
Add: Brought forward from last year 21.68 371.95 141.10 464.56
Distributable Profits 575.39 21.68 653.84 141.10
Appropriated as under:
Transfer to Special Reserve 110.74 - 110.74 -
Depreciation Adjustment 1.31 - 1.31 -
Proposed Equity Dividend 63.99 - 63.99 -
Tax on Distributed Profits 12.79 - 12.79 -
Balance Carried Forward to Balance sheet 386.56 21.68 465.01 141.10

OPERATIONS:

During the year the Operations of Your Company were satisfactory. Your Company is inthe policy of giving short term loans based on scrutiny of paying capacity and riskinvolved.

During the year your Company has received an order from Reserve bank of IndiaAhmedabad for the cancellation of certificate of Registration to carry on the business ofNon-Banking Financial Institution under section 45-IA(6) of the Reserve Bank of India Act1934 vide order dated September 24 2014. Your Company has filed an appeal against theabove said order with the Appellate Authority Ministry of Finance Government of IndiaNew-Delhi. The Hearing took place on March 20 2015 and the order is awaited from theAppellate Authority.

FINANCIAL HIGHLIGHTS:

Consolidated Revenues:

The total consolidated income of the Company for the FY 2014-15 comprises operatingrevenues of Rs. 1414.08 Lacs and other income of Rs. 11.66 lacs as compared to previousfiscal operating revenues of Rs. 1230.40 lacs and other income of Rs. 1.15 lacs.

Standalone Revenues:

During the fiscal 2015 the total income of the Company stood at Rs. 1408.46 Lacs ascompared to previous fiscal of Rs. 1155.26 Lacs.

Consolidated Profits / (Loss):

Profit stood at Rs. 536.05 Lacs before tax and Profit after Tax stood at Rs. 512.73Lacs as compared to previous fiscal Loss before Tax stood at Rs. (291.12) Lacs and Lossafter Tax stood at Rs. (323.22) Lacs.

Standalone Profits / (Loss):

Profit stood at Rs. 577.04 Lacs before tax and Profit after tax stood at Rs. 553.72Lacs for the fiscal 2015 as compared to the previous year Loss before tax Rs. (318.17)Lacs and after tax Rs. (350.26) Lacs.

Your Company has proposed a dividend of 2% i.e Rs. 0.02 paise per equity shareamounting to Rs. 6398762/- for the accounting year ended 31st March 2015.

Your company already intimated you regarding Wholly Owned Subsidiary in the name ofFinsolution Services FZE in United Arab Emirates. During the fiscal 2015 the grossoperational income of the subsidiary stood at AED 1.03 lacs and Operating Loss for thefiscal year 2015 stood at AED (2.46) lacs as compared to the previous year AED 4.91 lacsand profit AED 1.74 lacs.

The standalone net worth of your company at the year end stands at Rs. 9171.70 Lacswhich translated to a book value of Rs. 2.87/-. per share of face value of Re. 1/- each.The consolidated net worth of your company at the yearend stands at Rs. 9268.94 lacs whichtranslated to a book value of Rs. 2.89/- per share of face value of Re. 1/- each. TheBoard has recommended a dividend of 2% i.e Rs. 0.02 paise per equity share amounting toRs. 6398762/- (Rupees Sixty Three lacs Ninety Eight Thousand Seven Hundred and Sixty Twoonly) for the accounting year ended 31st March 2015.

RESERVES:

The Company has carried forward an amount of Rs. 11074313/- to Special Reserve

DIVIDEND:

Your directors propose a dividend of 2% of the paid up equity capital of the Companyi.e Rs. 0.02 per equity share amounting to Rs. 6398762/- (Rupees Sixty Three lacs NinetyEight Thousand Seven Hundred and Sixty Two only) for the accounting year ended 31st March2015.

DIRECTORS:

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation Mrs. Annu Agrawal Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers herself for reappointment. Allindependent directors have given declaration that they meet the criteria of independenceas laid down under section 149(6) of the Companies Act 2013 and Clause 49 of listingagreement. All the directors of the Company have confirmed that they are not disqualifiedfrom being appointed as directors in terms of Section 164 of the Companies Act 2013.

A brief resume and other details as stipulated under the Listing Agreement for theabove director seeking re-appointment is given as Additional Information on Directorswhich forms part of the Notice.

(i) Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement a separate exercise was carried out to evaluate the performance of individualDirectors including the Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution and independence of judgment thereby safeguarding theinterest of the Company. The performance evaluation of the Independent Directors wascarried out by the entire Board. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. The board also carriedout annual performance evaluation of the working of its Audit Nomination and Remunerationas well as Shareholders / Investors Relations and Grievance Committee. The Directorsexpressed their satisfaction with the evaluation process.

(ii) Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The remuneration policy as adopted by the company envisages payment ofremuneration according to qualification experience and performance at different levels ofthe organization.

(iii) Details of Board Meetings held

During the year Six Board Meetings and one independent directors’ meeting washeld. The Details of the meetings and attendance thereof have been given in CorporateGovernance Report. The provisions of Companies Act 2013 and listing agreement wereadhered to while considering the time gap between two meetings.

(iv) Constitution of Committees

The Board has constituted an Audit Committee Nomination & Remuneration Committeeand a Shareholders / Investors Relations and Grievance Committee the details of whichhave been mentioned in the Corporate Governance Report which is forming a part of theAnnual Report.

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 2015 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 provisions 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 2015 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 Auditor

The retiring auditors namely M/s. Bansal Bansal & Co. Practicing CharteredAccountants Mumbai hold office until the conclusion of the forthcoming Annual GeneralMeeting and are seeking re-appointment. They have confirmed that their appointment ifmade at the Annual General Meeting will be within the limits prescribed under CompaniesAct 2013. They have also confirmed that they hold a valid peer review certificate asprescribed under Clause 41(1)(h) of the Listing Agreement. Members are requested toconsider their reappointment.

(ii) Secretarial Auditor

In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s. R MMimani & Associates LLP Practicing Company Secretaries have been appointedSecretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure3 to this report.

(iii) Internal Auditor

M/S N. Kanodia & Co. Practicing Chartered Accountant performed the duties ofinternal auditors of the company for 2014-15 and their report is reviewed by the auditcommittee from time to time.

COMMENTS ON AUDITOR’S REPORT:

Statutory Auditor:

As regards not making provision for retirement benefits of employees the same has notbeen done in view of the meager staff strength.

With respect to the various loans given to Liquors India Limited amounting to 1.70Crores without seeking permission of the Reserve Bank of India (RBI) even aftercancellation of NBFC Certificate is due to the contractual agreement entered prior to thecancellation of the registration. Since the Contractual agreement was entered by yourCompany with Liquors India Limited was much before the order for cancellation ofregistration received by your Company and your Company had to adhere to the terms andconditions of the agreement in the normal course of Business and in contrnuation to theprevious loans granted to Liquors India Limited and hence the loan was granted.

As regards exposure norms of RBI for a single borrower the limit has exceeded for oneof the Borrower. The said exposure is secured which is more than sufficient to cover theentire amount due from the borrower and the management is confident of realizing thesedues.

Reserve Bank of India vide its order dated 24th September 2014 has cancelledcertificate of registration issued to the Company. Your Company has filed an appealagainst the about said order with the Appellate Authority Ministry of Finance Governmentof India New-Delhi against the said RBI order. The Hearing took place on March 20 2015and the order is awaited from the Appellate Authority.

Secretarial Auditor:

Reserve Bank of India vide its order dated 24th September 2014 has cancelledcertificate of registration issued to the Company to carry on the business of Non-BankingFinancial Institution under section 45-IA(6) of the Reserve Bank of India Act 1934.

Your Company has filed an appeal against the above said order with the AppellateAuthority Ministry of Finance Government of India New-Delhi. The Hearing took place onMarch 20 2015 and the order is awaited from the Appellate Authority. Further regardingthe First information report (FIR) filed by the Reserve Bank of India Ahmedabad againstthe Company and its Directors under various section of IPC the same is still underinvestigation.

With respect to an Ex-parte ad interim order dated December 19 2014 passed by theSecurities Exchange Board of India (SEBI) under section 11(1) 11(4) and 11B of theSecurities Exchange Board of India Act 1992 in the matter of First Financial ServicesLimited for not accessing the capital market your Company filed a reply with SEBI in thisregard.

On 24th February 2015 a hearing took place in SEBI. No final order has been passed bySEBI in this regard. However your Company has filed an appeal with the SecuritiesAppellate Tribunal on 23rd July 2015 in this regard.

With respect to the various loans given to Liquors India Limited amounting to 1.70Crores without seeking permission of the Reserve Bank of India (RBI) even aftercancellation of NBFC Certificate is due to the contractual agreement entered prior to thecancellation of the registration. Since the Contractual agreement was entered by yourCompany with Liquors India Limited was much before the order for cancellation ofregistration received by your Company and your Company had to adhere to the terms andconditions of the agreement in the normal course of Business and in contrnuation to theprevious loans granted to Liquors India Limited and hence the loan was granted.

As regards exposure norms of RBI for a single borrower the limit has exceeded of oneof the Borrower. Also the said exposure is secured which is more than sufficient to coverthe entire amount due from the borrower and the management is confident of realizing thesedues.

As regards delay in filing of certain returns/ forms with the Registrar of Companiesthese forms/returns have been filed by making the payment of the additional fee asprescribed by the law.

The Company is in process of formulating the certain policies as required under theCompanies Act 2013 and listing agreement and will finalize the same as and when thepolicies are mandatorily applicable to the Company.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aVigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company athttp://www.comfortintech.com/whistle_blower_policy.php.

RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on anarm’s length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Company’s PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. Transactions with related parties entered by the Company inthe normal course of business are periodically placed before the Audit Committee for itsomnibus approval and the particulars of contracts entered during the year as per Form AOC2 is enclosed as Annexure 4. The Board of Directors of the Company has on therecommendation of the Audit Committee adopted a policy to regulate transactions betweenthe Company and its Related Parties in compliance with the applicable provisions of theCompanies Act 2013 the Rules there under and the Listing Agreement. This Policy wasconsidered and approved by the Board and has been uploaded on the website of the Companyat http://www.comfortintech.com/ related_party_transaction_policy.php.

SUBSIDIARY COMPANY:

Pursuant to sub-section (3) of section 129 of the Companies Act 2013 the statementcontaining the salient feature of the financial statement of a company’s subsidiaryor subsidiaries associate company or companies and joint venture or ventures is given as Annexure2.

Further during the year your company has taken initiation to close the Wholly OwnedSubsidiary in Dubai. The matter is under process.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT 9 isannexed herewith as Annexure 5.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

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 & Key ManagerialPerson of the Company and Directors is furnished hereunder:

Sr. No Name of the Director/ KMP Designation Remuneration 2014-15 Remuneration 2013-14 Increase/ Decrease Ratio/Times per median of employee remuneration
1 Mr. Anil Agrawal Managing Director 2118333 1425000 +693333 8.15
2 Mr. Bharat Shiroya Whole time Director 1301458 925167 +376291 5.01
3 Mrs. Ramadevi Gundeti Company Secretary 1040276 1080919 -40643 4.00
4 Mr. Lalit Sethi** Chief Financial Officer 962591 Nil +962591 3.70

** Mr. Lalit Sethi was appointed as the Chief Financial Officer of the Company w.e.f 14thFebruary 2015 and ceased w.e.f. 30th May 2015.

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 auditor 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 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 is provided elsewhere in this annual report in ManagementDiscussion and Analysis.

FIXED DEPOSITS:

The Company has not accepted any fixed deposits as on 31st March 2015 so asto attract the provisions of Chapter V of the Companies Act 2013 read with Companies(Accounts) Rules 2014 as amended from time to time.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the Accounting Standards AS-21 on Consolidated Financial Statementsread with the Accounting Standard AS-23 on Accounting for investments in Associates theAudited Consolidated Financial Statements are provided in the annual report.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis for the year 2014-15 and a detailed report onCorporate Governance as required under Clause 49 of the Listing agreement executed withthe Stock Exchanges are given in separate 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 Clause 49is annexed to the report on Corporate Governance.

PARTICULARS OF EMPOLYEES UNDER THE COMPANIES (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:

The provisions of the Companies Act 2013 read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended are not applicable to thecompany as there are no employees whose remuneration is in excess of the limitsprescribed.

LISTING:

The Equity Shares of the Company are at presently listed with the BSE Limited. Thecompany is regular in payment of listing fee. During the year the Securities ExchangeBoard of India has given an exit order to the Jaipur Stock Exchange vide order dated March23 2015 where our Company’s shares are listed.

CASH FLOW STATEMENT:

In conformity with the provisions of Clause 32 of the Listing agreement andrequirements of Companies Act 2013 the Cash flow Statement for the year ended 31.03.2015is annexed here to as a part of the Financial Statements.

ENERGY TECHNOLOGY AND FOREIGN EXCHANGE:

Information in accordance regarding conservation of energy technology absorption andforeign exchange earnings and outgo is given in the Annexure 1.

POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013

A policy On Sexual Harassment of Women at Workplace has been drafted and approved bythe Board in its meeting held on May 30 2015. A committee namely Internal ControlCommittee has been construed for protection of women against Sexual Harassment at theworkplace consisting of the following:

Mrs. Annu Agrawal Chairman
Mrs. Ramadevi Gundeti Member
Mrs. Apexa Kadam Member

The Committee will look after the complaints received from the women employees and willalso work for Safety of Women at workplace.

SEBI ORDER

Your Company has received an Ex-parte ad interim order dated December 19 2014 passedby the Securities Exchange Board of India (SEBI) under section 11(1) 11(4) and 11B of theSecurities Exchange Board of India Act 1992 in the matter of First Financial ServicesLimited for not accessing the capital market. Your Company filed a reply with SEBI in thisregard. On 24th February 2015 a hearing took place in SEBI. No final order hasbeen passed by SEBI in this regard. However your Company has filed an appeal with theSecurities Appellate Tribunal on 23rd July 2015 in this regard.

RBI ORDER

Your Company has received an order from Reserve bank of India Ahmedabad for thecancellation of certificate of Registration to carry on the business of Non-BankingFinancial Institution under section 45-IA(6) of the Reserve Bank of India Act 1934 videorder dated September 24 2014.

Your Company has filed an appeal against the above said order with the AppellateAuthority Ministry of Finance Government of India New-Delhi. The Hearing took place onMarch 20 2015 and the order is awaited from the Appellate Authority.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act 2013 read with ScheduleVII to the Companies Act 2013 and other applicable provisions every company having networth of rupees five hundred crore or more or turnover of rupees one thousand core or moreor a net profit of rupees five crore or more during any financial year shall constitute aCorporate Social Responsibility Committee. Your Company has earned a profit of Rs 553.72lacs (Standalone) for the year ended March 31 2015 and accordingly provisions of Section135 have now become applicable to your Company. The Board has constituted a CorporateManagement Committee to carry out the CSR Programme within specified budgets andtimeframes. The Committee consists of the following Directors namely:

Name of Member Designation
Mr. Anil Agrawal Chairman
Mrs. Annu Agrawal Member
Mr. Bharat Shiroya Member
Mr. Jugal Thacker Member

The Corporate Social Responsibility Policy was considered and approved by the Board ofDirectors in their meeting held on 8th August 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 IndiaBSE Limited 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.

Place: Mumbai FOR AND ON BEHALF OF THE BOARD
Dated: 08.08.2015 Sd/-
ANIL AGRAWAL
Chairman & Managing Director

ANNEXURE-1 TO DIRECTORS’ REPORT:

ENERGY CONSERVATION : NA TECHNOLOGY ABSORPTION : NA

FOREIGN EXCHANGE EARNINGS AND OUT GO: Amount in Rs
Foreign exchange used Nil
Foreign exchange earned Nil

PURSUANT TO SUB-SECTION (3) OF SECTION 129 OF THE COMPANIES ACT 2013

Name of the subsidiary Finsolution Services FZE
(in AED)
1. Reporting period for the subsidiary concerned if different from the holding company’s reporting period. N.A
2. Reporting currency and Exchange rate as on the last date of the relevant Dirham
Financial year in the case of foreign subsidiaries. 1 AED= Rs. 17.0031 on 31/3/2015
3. Share capital 100000
4. Reserves & surplus 571322
5. Total assets 574322
6. Total Liabilities 3000
7. Investments Nil
8. Turnover 102515
9. Profit before taxation (245983)
10. Provision for taxation Nil
11. Profit after taxation (245983)
12. Proposed Dividend Nil
13. % of shareholding 100%

ANNEXURE-3 TO DIRECTORS’ REPORT: SECRETARIAL AUDIT REPORT

Secretarial Audit Report for the financial year ended on March 31 2015

[Pursuant to Section 204(1) of the Companies Act 2013 and the Rule made there-under]To

The Members

Comfort Intech Limited

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Comfort Intech Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.

Based on our verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit we hereby report that in our opinion the Company has during the auditperiod covering the financial year ended on March 31 2015 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board-processes andcompliance-mechanism in place to the extent in the manner and subject to the reportingmade hereinafter: We have examined the books papers minute books forms and returnsfiled and other records maintained by the Company for the financial year ended on March31 2015 according to the provisions of: I. The Companies Act 2013 (the Act 2013) andthe Rules made there-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 applicable for Foreign Direct Investment Overseas DirectInvestment and External Commercial Borrowings; V. The following Regulations and Guidelinesprescribed under the Securities and Exchange Board of India Act 1992 (‘SEBIAct’)to the extent applicable to the Company :

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

c. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;VI. Law specifically applicable to the industry in which the Company belongs asidentified by the Management that is to say;

a. The Reserve Bank of India Act 1934

b. Rules regulation and guidelines issued by the Reserve Bank of India as areapplicable to the Non Banking Financial Company (NBFC) We have also examined compliancewith the applicable clause of the Listing Agreements entered into with the various StockExchanges where the securities of the Company are listed;

Management Responsibility:

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 or effectiveness with which the management has conductedthe affairs of the Company.

We report that;

During the financial year under review the Company has complied with the provisions ofthe Act Rules Regulations Guidelines etc. mentioned above subject to the following;

a. Reserve Bank of India vide its order dated September 24 2014 has cancelled thecertificate of registration issued to the Company to carry the business of NBFC for non-compliance of the certain provisions of the Act and rules made there-under.

b. The Company has given loans amounting to Rs. 1.70 Crores on various dates to LiquorIndia Limited (A related party) without seeking permission from the Reserve Bank of Indiaunder pre contractual commitment as informed by the Company.

c. The Company has violated the RBI norms on loan exposure to a single entity duringthe financial year.

d. Securities and Exchange Board of India (SEBI) vide its interim order dated December19 2014 passed under section 11 and 11 B has barred the Company and one of its promotersgroup from accessing the Stock Market.

e. The Company has delayed the filing of certain returns/ forms with the Registrar ofCompanies. However these forms/ returns have been filed by making the payment of theadditional fee as prescribed by the law.

f. The Company is in process of formulating the certain policies as required under theCompanies Act 2013 and listing agreement.

We further report that;

a. there was no action/event in pursuance of the Securities and Exchange Board of India(Delisting of Equity Shares) Regulations 2009; or the Securities and Exchange Board ofIndia (Buyback of Securities) Regulations 1998; or the Securities and Exchange Board ofIndia (Issue of Debt Securities) Regulations 2008; or the Securities and Exchange Boardof India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999or the Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;requiring compliance thereof by the Company during thefinancial year and Secretarial Standard issued by the Institute of Company Secretaries ofIndia (ICSI) were not applicable during the financial year.

b. the compliance by the Company of the applicable financial laws like direct andindirect tax laws has not been reviewed in this Audit since the same have been subjectto review by the other designated professionals.

We further report that;

a. the Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors and composition ofthe Board of Directors is in compliance with the Provisions of the Act.

b. adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were generally sent at least seven days in advance. Notices forthe Board meeting held on 20/10/2014 and 20/12/2014 has been given shorter than sevendays however in these meeting Independent Director were present as required by the law.

c. in view of the nonexistence formal system we are not in position to comment onexistence of system for seeking and obtaining further information and clarifications onthe agenda items before the meeting and for meaningful participation at the meeting.

d. as per the minutes of the meeting duly recorded and signed by the chairmanresolution have been approved by the majority of Directors. During the financial year noagenda item on which any of the Director dissented.

We further report that based on the information provided by the Company its officersagents and authorized representatives during the course of audit and also on the review ofquarterly compliance reports of the respective department/unit heads/Company Secretary/CFOtaken on record by the Board of Directors of the Company in our opinion adequate systemprocess and controls exits commensurate with the size and operations of the Company tomonitor and ensure compliance with the applicable laws rules regulation and guidelines.

We further report that the Company during the financial year have the specificevents/actions that can have major bearing on the company are as under:

a. Reserve Bank of India vide its order dated September 24 2014 has cancelled thecertificate of registration issued to the Company to carry the business of NBFC

b. First information report (FIR) filed by the Reserve Bank of India Ahmedabad againstthe Company and its Directors under various section of IPC.

c. Securities and Exchange Board of India (SEBI) vide its interim order dated December19 2014 passed under section 11 and 11 B has barred the Company and one of its promotersgroup from accessing the Stock Market.

For R M MIMANI & ASSOCIATES LLP
[COMPANY SECRETARIES]
Sd/-
RANJANA MIMANI
(PARTNER)
FCS No: 6271
CP No. : 4234
Place: Mumbai
Dated: July 27 2015

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