To the Members of the Company
Your Directors have pleasure in presenting the THWENTY THIRD Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended March312017. The financial results of the Company are summarized below
(Rs. In Lakhs)
|PARTICULARS ||FINANCIAL YEAR ENDED 31ST MARCH 2017 ||FINANCIAL YEAR ENDED 31ST MARCH 2016 |
|Total Revenue ||950.57 ||1053.68 |
|ProfitBefore Depreciation and Taxes ||101.27 ||427.64 |
|Less: Depreciation ||20.01 ||22.04 |
|Less : Provision for || || |
|(a) Income Tax ||1.89 ||77.38 |
|(b) Deferred tax ||-1.85 ||-0.98 |
|Income Tax paid of earlier years ||15.77 ||-1.45 |
|Total Tax Expenses ||15.82 ||74.95 |
|Profit / (loss) for the Year ||65.43 ||330.65 |
|Add: Brought forward from last year ||574.30 ||386.56 |
|Distributable Profits ||639.73 ||717.21 |
|Appropriated as under: || || |
|Transfer to Special Reserve ||13.09 ||66.13 |
|Depreciation Adjustment ||- ||- |
|Proposed Equity Dividend ||31.99 ||63.99 |
|Tax on Distributed Profits ||6.51 ||12.79 |
|Balance Carried Forward to Balance sheet ||588.14 ||574.30 |
During the year the operations of your company were satisfactory. On hearing oursubmissions the Honble High Court was pleased to set aside the Orders being theOrder passed by RBI dated 24th September 2014 and the Order passed by Union of Indiadated 30th November 2015. However the Honble High Court had granted the RBIliberty to grant the company a fresh hearing. Accordingly the RBI had conducted a hearingand the Company had made its submissions to the RBI during the hearing. However the RBIhas again passed an Order dated 28th September 2016 cancelling the Certificate ofRegistration of NBFC License of the Company. On receipt of the Order the Company hasagain approached the Appellate Authority Ministry of Finance and the matter is pendingbefore the said forum for disposal.
Further your company has taken your approval though Postal ballot for thediversification and expansion of the various other activities which have good potentialwith respect to the future prospects of the Company and accordingly your Board ofDirectors undertook the business activities in the field of trading of various goods andcommodities and entered various joint venture agreements for the development of lands etcduring the year.
FINANCIAL HIGHLIGHTS Financial Revenues:
During the fiscal 2017 the total income of the Company stood at Rs. 950.57 Lakhs ascompared to previous fiscal of Rs. 1053.69 Lakhs.
Financial Profits / (Loss):
Profit stood at Rs. 81.25 Lakhs before tax and Profit after tax stood at Rs. 15.82Lakhs for the fiscal 2017 as compared to the previous year profit before tax Rs. 405.60Lakhs and after tax Rs. 74.95 Lakhs.
The Company has carried forward an amount of Rs. 1308704/- to Special Reserve.
Your directors proposed and recommended a dividend of 1% on the paid up Equity Capitalof the Company i.e Rs. 0.01 paise per Equity Share amounting to Rs. 3199381/- (RupeesThirty One Lakhs Ninety Nine Thousand Three Hundred and Eighty Only) for the financialyear ended March 312017.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Mrs. AnnuAgrawal (DIN: 00014487) retires by rotation and being eligible offers herself forre-appointment.
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.
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 Regulation25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
Mr. Janak G Mehta ceased to be a director w.e.f. 11th February 2017 u/s 167(1)(b) dueto his absence from all the meetings of the Board of Directors for more than 12 monthsconsecutively.
A brief profile and other details as stipulated under the Listing Regulations 2015 forthe above Director seeking re-appointment is given as Additional Information on Directorswhich forms part of the Notice.
Mrs. Ramadevi Gundeti has resigned from the post of Company Secretary and ComplianceOfficer w.e.f. 6th August 2016. Mr. Swapnil T. Dafle has been appointed as the CompanySecretary and Compliance Officer of the Company w.e.f. 20th May 2017.
(i) Board Evaluation
Board Evaluation pursuant to the provisions of the Companies Act 2013 and Regulation27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 a separateexercise was carried out to evaluate the performance of individual Directors includingthe Executive Director who was evaluated on parameters such as level of engagement andcontribution and independence of judgment thereby safeguarding the interest of theCompany. The performance evaluation of the Independent Directors was carried out by theentire Board. The performance evaluation of the Executive 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 4 (Four) Board Meetings and one Independent Directors meetingwere held. The details of the meetings and attendance thereof have been given in CorporateGovernance Report forming part of the Annual Report. The provisions of Companies Act 2013and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 were adheredto while considering the time gap between two meetings.
(iii) Constitution of Committees
The Board has constituted an Audit Committee Nomination & Remuneration Committeeand a Stakeholders Relationship Committee the details of which have been mentioned in theCorporate Governance Report which is forming part of Annual Report.
(iv) Directors Remuneration Policy and criteria for matters under section 178
Information regarding Directors Remuneration Policy and criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3)of section 178 are provided in the Corporate Governance Report.
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 March312017 the applicable accounting standard had been followed along with proper explanationrelating 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 profitof 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 Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
4. That the directors had prepared the accounts for the financial year ended March312017 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.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Listing Regulations 2015 the Management Discussion and Analysis isattached hereto and forms part of this Report.
(i) Statutory Auditor
The existing Statutory Auditors namely M/s. Bansal Bansal & Co. CharteredAccountants Mumbai tenure will expire at the ensuing Annual General Meeting.
The Board has recommended appointment of M/s. A.R. Sodha & CO. CharteredAccountants Mumbai for the period of 5 years from the conclusion of this Twenty ThirdAnnual General Meeting till the conclusion of Twenty Eighth Annual General Meeting of theCompany (subject to ratification of the appointment by Members at every Annual GeneralMeeting held after this Annual General Meeting). They have confirmed that theirappointment if made at the Annual General Meeting will be within the limits prescribedunder Companies Act 2013. They have also confirmed that they hold a valid peer reviewcertificate as prescribed under Regulation 33(1) (d) of the LODR Regulation 2015. Membersare requested to consider their appointment.
(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 appointed asSecretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed asAnnexure 1 to this report.
(iii) Internal Auditor
M/s. S A R A & Associates Practicing Chartered Accountants Mumbai performed theduties of internal auditors of the company for 2016-17 and their report is reviewed by theaudit committee from time to time.
COMMENTS ON AUDITORS REPORT
No comments received from Statutory Auditors as they gave non-qualified opinion.
With regard to point no. (i) and (iv)
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.
Your Company has given the corporate guarantee to one of group company i.e ComfortFincap Limited for availing the loan from M/s ANAND RATHI GLOBAL FINANCE LTD. 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 16th September 2017.
Further the company is also in the process of filing returns under section 117 ofCompanies Act 2013.
With regard point no. (ii) i.e. continuing the violation of the RBI norms with regardto exposure norms of RBI for a single borrower the limit has exceeded of one of theBorrower 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 theses dues.
With regard point no. (iii) i.e. Reserve Bank of India vide its order dated 24thSeptember 2014 has cancelled certificate of registration issued to the Company to carryon the business of Non-Banking Financial Institution issued to the Company under section45-IA(6) of the Reserve Bank of India Act 1934. Your company has filed an appeal againstthe above said order with the Appellate Authority Ministry of Finance Government ofIndia New Delhi. However order from the Appellate Authority dated November 30 2015 hasbeen received in conformity with the order issued by RBI dated September 24 2014.Further Company has filed a writ petition in December 2015 challenging the orders of RBIand Union of India in the Delhi High Court. The same is under process. However no freshloans had been granted during the financial year 2015-16 in compliance with the RBI orderdated September 24 2014.
However the Honble High Court had granted the RBI liberty to grant the companya fresh hearing. Accordingly the RBI had conducted a hearing and the Company had made itssubmissions to the RBI during the hearing. However the RBI has again passed an Orderdated 28th September 2016 cancelling the Certificate of Registration of NBFC License ofthe Company. On receipt of the Order the Company has again approached the AppellateAuthority Ministry of Finance and the matter is pending before the said forum fordisposal.
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).
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
In conformity with the provisions of Regulation 34(2) (c) of the Listing Regulationsand requirements of Companies Act 2013 the Cash flow Statement for the year ended March312017 is annexed here to as a part of the Financial Statements.
PARTICULARS OF HOLDING SUBSIDIARY & ASSOCIATE COMPANIES
The Company has no Holding or Subsidiary Company as on 31st March 2017.
The list of Associate Companies are as follows:
1. Comfort Securities Limited
2. Lemonade Shares & Securities Private Limited
3. Liquors India Limited ADOPTION OF VARIOUS POLICIES:
The Board of Directors of the Company has approved and adopted various policies inaccordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015& Companies Act 2013.
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:
|Name of the Director/ KMP ||Designation ||Remuneration 2016-17 ||Remuneration 2015-16 ||Increase/ Decrease ||Ratio/Times per median of employee remuneration |
|Anil B Agrawal ||Managing Director ||Rs. 2861666 ||Rs. 2829167 ||Rs. 32499 ||7.30 |
|Bharat N Shiroya ||Whole time Director ||Rs. 800000 ||Rs. 1792386 ||(Rs. 992386) ||2.04 |
|Ramadevi Gundeti* ||Company Secretary ||Rs. 460277 ||Rs. 1124200 ||(Rs. 663923) ||1.17 |
|Pravin Naik** ||Chief Financial Officer ||Rs. 243536 || ||Rs. 243536 ||0.62 |
*Ramadevi Gundeti resigned as a Company Secretary with effect from 6th August 2016.
** Mr. Pravin Naik was appointed as Chief Financial Officer of the company with effectfrom 5th November 2016. RELATED PARTY TRANSACTIONS
Related party transactions that were entered during the financial year were on anarms length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Companys 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 AOC-2 is enclosed as Annexure - 2 to this Report. The Board of Directors of the Company hason the recommendation of the Audit Committee adopted a policy to regulate transactionsbetween the Company and its Related Parties in compliance with the applicable provisionsof the Companies Act 2013 the Rules there under and the Listing Agreement. This Policywas considered and approved by the Board and has been uploaded on the website of theCompany at http://www.comfortintech.com/related party transaction policy.php.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Your Companys commitment towards CSR initiatives endeavors to embraceresponsibility for its corporate actions and achieve fruitful impact of its businessactions not only on its stakeholders but also the society at large. During the year theCompany carried out a detailed assessment of the areas where the CSR activities should befocused so as to maximize societal good. Based on interactions with a wide cross sectionof stakeholders - internal and external - the Company has identified the following as thefocus areas for its CSR activity(ies):- Promoting education and vocational skills. Due tothe time taken to finalise the priority areas the Company was able to spend on CSR anamount of Rs. 20000/-. In the current year the Company endeavors to increase the spendingon CSR and be in line with the norms in this area. Your Companys CSR Policystatement and annual report on the CSR activities undertaken during the financial yearended 31st March 2017 in accordance with section 135 of the Companies Act 2013 andCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed to this reportas Annexure - 4.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 read with the Companies (Meetings of Board and its Powers)Rules 2014 as on March 312016 are given in the notes to the Financial Statements.
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.
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 Companyswebsite www.comfortintech.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 ofPrevention of Insider Trading based on the SEBI (Prohibition of Insider Trading)Regulations 2015. The same has been placed on the website of the Companywww.comfortintech.com. 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.
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on March 31 2017 inForm MGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are set out herewith as Annexure -3 to this report.
INFORMATION AS PER SECTION 134(3)(m) OF THECOMPANIES ACT 2013
The company has no activity relating to consumption of energy or technology absorption.Foreign currency expenditure amounting to Rs. 7469505.44 was incurred during the yearunder review. The company does not have any foreign exchange earnings.
CHANGE IN THE NATURE OF BUSINESS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS SEBIORDER
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 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 under process.However Your Company has received Interim reliefs in this regard from SEBI vide orderdated 25th August 2016.
As intimated you earlier that Reserve Bank of India Ahmadabad vide its order dated24th September 2014 had cancelled the certificate of registration issued to the company.Subsequently the Company challenged the order of the RBI in the Appellate AuthorityMinistry of Finance. However the Appellate had upheld the order of the RBI vide its orderdated 30th November 2015. Thereafter the Company left with no option hadfiled a writ petition in the Honble Delhi High Court challenging the orders of RBIand Union of India. On hearing our submissions the Honble High Court was pleased toset aside the Orders being the Order passed by RBI dated 24th September 2014 and theOrder passed by Union of
India dated 30th November 2015. However the Honble High Court had granted theRBI liberty to grant the company a fresh hearing. Accordingly the RBI had conducted ahearing and the Company had made its submissions to the RBI during the hearing. Howeverthe RBI has again passed an Order dated 28th September 2016 cancelling the Certificate ofRegistration of NBFC License of the Company. On receipt of the Order the Company hasagain approached the Appellate Authority Ministry of Finance and the matter is pendingbefore the said forum for disposal.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of theCompany which occurred during the end of the financial year 31 March 2017 to which thefinancial statements relates and the date of signing of this report. INTERNAL CONTROLSYSTEM 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 commensuratewith its size and nature of its business.
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance along with the Auditors Certificate on itscompliance forms part of this Report and is annexed hereto. A declaration signed by theChief Financial Officer in regard to compliance with the Code of Conduct by the Boardmembers and Senior Management Personnel also forms part of this Report.
ANTI- SEXUAL HARASSMENT POLICY
The Company has an Anti- Sexual Harassment Policy in place. During the year underreview there were no complaints in this regard.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITOR SUNDER SECTION 143(12)
During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.
HUMAN RESOURCES (HR)
The Companys HR policies and procedures are designed to recruit and retain thebest talent to support the operations of your Company and to align the interests of allemployees with the long term organizational goals.
The Companys Shares are listed on BSE Limited. The Company has paid Listing feesfor F.Y. 2017-18 to the BSE Limited. ACKNOWLEDGEMENT:
The Board of Directors wishes to express its gratitude and record its sincereappreciation for the commitment and dedicated efforts put in by all the employees. YourDirector take this opportunity to express their grateful appreciation for theencouragement co-operation and support received by the Company from the localauthorities bankers customers suppliers and business associates. The Directors arethankful to the esteemed shareholders for their continued support and the confidencereposed in the Company and its management.
| ||FOR AND ON BEHALF OF THE BOARD || |
| ||Sd/- ||Sd/- |
|Place : Mumbai ||ANIL AGRAWAL ||BHARAT SHIROYA |
|Date : 05.08.2017 ||Managing Director ||Wholetime Director |
| ||DIN: 00014413 ||DIN : 00014454 |