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Comfort Intech Ltd.

BSE: 531216 Sector: Financials
NSE: N.A. ISIN Code: INE819A01023
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VOLUME 17615
52-Week high 1.17
52-Week low 0.60
P/E 13.33
Mkt Cap.(Rs cr) 25.59
Buy Price 0.77
Buy Qty 1500.00
Sell Price 0.80
Sell Qty 2385.00
OPEN 0.81
CLOSE 0.81
VOLUME 17615
52-Week high 1.17
52-Week low 0.60
P/E 13.33
Mkt Cap.(Rs cr) 25.59
Buy Price 0.77
Buy Qty 1500.00
Sell Price 0.80
Sell Qty 2385.00

Comfort Intech Ltd. (COMFORTINTECH) - Director Report

Company director report

To the Members of the Company

Your Directors have pleasure in presenting the Twenty-Second Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended March312016. The financial results of the Company are summarized below:

FINANCIAL RESULTS

(Rs. In Lacs
PARTICULARS FINANCIAL YEAR ENDED 31 ST MARCH 2016 FINANCIAL YEAR ENDED 31 ST MARCH 2015
Total Revenue 1053.68 1408.46
ProfitBefore Depreciation and Taxes 427.64 594.68
Less: Depreciation 22.04 17.64
Less: Provision for
(a) Income Tax 77.38 25.66
(b) Deferred tax -0.98 -3.54
Income Tax paid of earlier years -1.45 1.2
Total Tax Expenses 74.95 23.32
Profit / (loss) for the Year 330.65 553.72
Add: Brought forward from last year 386.56 21.68
Distributable Profits 717.21 575.39
Appropriated as under:
Transfer to Special Reserve 66.13 110.74
Depreciation Adjustment - 1.31
Proposed Equity Dividend 63.99 63.99
Tax on Distributed Profits 12.79 12.79
Balance Carried Forward to Balance sheet 574.3 386.56

OPERATIONS

During the year the operations of Your Company were satisfactory and your Company hascarried out the operations of NBFC. However no fresh loans had been granted during thefinancial year 2015-16 in compliance with the RBI order dated September 24 2014. Asalready intimated you earlier your Company had filed an appeal against the above saidorder of the RBI with the Appellate Authority Ministry of Finance New Delhi. HoweverOrder from the Appellate Authority dated November 30 2015 has been received in conformitywith the order issued by RBI dated September 24 2014. Further your Company has filed awrit petition in December 2015 challenging the orders of RBI and Union of India in theDelhi High Court. The same is under process.

Further during the year the Wholly Owned Subsidiary M/s Finsolution Services FZE inUnited Arab Emirates has been liquidated w.e.f October 07 2015.

FINANCIAL HIGHLIGHTS Financial Revenues

During the fiscal 2016 the total income of the Company stood at Rs. 1053.69 Lacs ascompared to previous fiscal of Rs. 1408.46 Lacs.

Financial Profits / (Loss)

Profit stood at Rs. 405.60 Lacs before tax and Profit after tax stood at Rs. 330.65 forthe fiscal 2016 as compared to the previous year profit before tax Rs. 577.04 Lacs andafter tax Rs. 553.72 Lacs.

The net worth of your company at the year end stands at Rs. 9425.57 Lacs whichtranslated to a book value of Rs. 2.95/- per share of face value of Re. 1/- each.

RESERVES

The Company has carried forward an amount of Rs. 6612986/- to Special Reserve.

DIVIDEND

Your directors proposed and recommended a dividend of 2% on the paid up Equity Capitalof the Company i.e 0.02 paise per Equity Share amounting to Rs. 6398762/- (Rupees SixtyThree lacs Ninety Eight Thousand Seven Hundred and Sixty Two only) for the financial yearended March 312016.

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 Lai Thakur as an Additional Director (NonExecutive& Independent) of the Company effective from November 24 2015 and he shall holdoffice up to the date of ensuing Annual General Meeting. The Company has receiveddeclarations from Mr. Devendra Lai Thakur confirming that he meets with the criteria ofIndependence as prescribed both under sub-section (6) of Section 149 of the Act and underRegulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 with the Stock Exchanges. Accordingly his candidature for appointment as aNon-Executive & Independent Director of the Company is included at Item No. 5 of theNotice to the Annual General Meeting.

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

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 Disclosure Requirements) Regualtions 2015. All thedirectors of the Company have confirmed that they are not disqualified from beingappointed as directors in terms of Section 164 of the Companies Act 2013.

A brief resume and other details as stipulated under the SEBI (Listing Obligations andDisclosure Requirements (LODR)) Regualtions 2015 for the above director seekingre-appointment is given as Additional Information on Directors which forms part of theNotice.

(i) Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 27 of LODRRegulations 2015 a separate exercise was carried out to evaluate the performance ofIndividual Directors including the Chairman of the Board who were evaluated on parameterssuch as level of engagement and contribution and independence of judgment therebysafeguarding the interest of the Company. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors. The boardalso carried out annual performance evaluation of the working of its Audit Nomination andRemuneration as well as Stakeholders Relationship Committee. The Directors expressed theirsatisfaction with the evaluation process.

(ii) Remuneration Policy

The Board has on the recommendations of Nomination & Remuneration committee frameda 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 LODR Regulations 2015 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 Stakeholders Relationship Committee the details of which have been mentioned in theCorporate Governance Report which is forming part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Clause (c) of subsection (3) of Section 134 of theCompanies Act 2013 your Directors confirm:

1. That in the preparation of the annual accounts for the financial year ended March312016 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 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 March 312016 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 system were adequate and operatingeffectively

AUDITORS

(i) Statutory Auditors

The retiring Statutory Auditors namely M/s. Bansal Bansal & Co. PractisingChartered Accountants Mumbai hold office until the conclusion of the forthcoming AnnualGeneral Meeting.

(ii) Secretarial Auditors

In terms of Section 204 of the Companies Act 2013 and Rules made there under M/s. R MMimani & Associates LLP Practising Company Secretaries have been appointed asSecretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed asAnnexure-2 to this report.

(iii) Internal Auditors

M/s S A R A & Associates Prastising Chartered Accountants Mumbai performed theduties of internal auditors of the company for financial year 2015-16 and their report isreviewed by the audit committee from time to time.

COMMENTS ON AUDITOR’S REPORT

Statutory Auditors:

As regards exposure norms of RBI for a single borrower the limit has exceeded of oneof the Borrower in the previous year and the said exposure is secured which is more thansufficient to cover the entire amount due from the borrower and the management isconfident of realizing these dues.

As regards not making provision for retirement benefits of your employees the same hasnot been done in view of the meager staff strength. However Your Company is in theprocess to comply with the provisions of Accounting Standard 15 for retirement benefits.

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 issued to the Company under section 45-IA(6) of the Reserve Bank ofIndia Act 1934. Your Company has filed an appeal against the above said order with theAppellate Authority Ministry of Finance Government of India New Delhi. However Orderfrom the Appellate Authority dated November 30 2015 has been received in conformity withthe order issued by RBI dated September 24 2014. Further Company has filed a writpetition in December 2015 challenging the orders of RBI and Union of India in the DelhiHigh Court. The same is under process. However no fresh loans had been granted during thefinancial year 2015-16 in compliance with the RBI order dated September 24 2014

Secretarial Auditors:

With regard to point no. (i) i.e not fully complied with the provisions of Section 203of the Companies Act 2013 during the year the Chief Financial Officer of the Companyhas resigned from the Office of Key Managerial Person. The Company is in the process offilling the Vacancy.

With regard to point no. (ii) i.e Regulation 46 of SEBI (LODR) Regulations 2015 withregard to maintenance of functional website it is due to technical reasons and the companyis in the process of redesigning the entire website of the company according to theCompanies Act 2013 as well as SEBI(LODR) Regulations 2015. The Company is in the processto 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 thansufficient to cover the entire amount due from the borrower and the management isconfident of realizing these dues.

With regard to point no. (iv) 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.

As intimated earlier your Company has received an Ex-parte Ad Interim order datedDecember 19 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 markets.However Your Company has received some Interim reliefs in this regard from SEBI videtheir letters dated January 07 2016 & January 15 2016 respectively.

Further your Company has received the final order from Securities And Exchange Boardof India (SEBI) dated June 02 2016 in conformity with the interim order dated December19 2014. However your Company has filed an Appeal with Securities Appellate Tribunal onJuly 012016 in this regard. The matter is under process.

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 at

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 FormAOC-2 is enclosed as Annexure-4. The Board of Directors of the Company has on therecommendations 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 Regulations 2015. This Policywas considered and approved by the Board and has been uploaded on the website of theCompany at www.comfortintech.com

CLOSURE OF SUBSIDIARY COMPANY

During the year M/s Finsolution Services FZE Wholly Owned Subsidiary of Comfort IntechLimited in United Arab Emirates has been liquidated w.e.f October 07 2015.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on March 312016 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-6to this report.

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 31 2016 are given in the notes to the Financial Statements.

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.comfortintech.com. The boardmembers and senior management personnel have affirmed compliance with the said code ofconduct. A declaration signed by the Managing Directors is given at the end of theCorporate 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.

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 2015-16 Remuneration 2014-15 Increase/ Decrease Ratio/Times per median of employee remuneration
1 Mr. Anil Agrawal Managing Director 2829167 2118333 +710834 6.74
2 Mr. Bharat Shiroya Whole Time Director 1792386 1301458 +490928 4.27
3 Mrs. Ramadevi Gundeti Company Secretary 1124200 1040276 +83924 2.68
4 Mr. Lalit Sethi * Chief Financial Officer 508529 962591 -454062 1.21
5 Mrs. Suma Ballal ** Chief Financial Officer 91935 - +91935 0.22

* Mr Lalit Sethi was appointed as the Chief Financial Officer (CFO) of the Companyw.e.f February 14 2015 & resigned w.e.f May 30 2015.

** Mrs. Suma Ballal was appointed as the Chief Financial Officer (CFO) of the Companyw.e.f June 012015 and resigned w.e.f November 07 2015.

POSTAL BALLOT

During the year Your Company has conducted Postal Ballot pursuant to Section 110 of theCompanies Act 2013 for passing a Special Resolution for Alteration of Main objects of theMemorandum of Association of the Company & accordingly Your Company has obtained theapproval of Members of the company in this regard.

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

During the year under review Your Company has not accepted any fixed deposits as onMarch 312016 so as to attract the provisions of Chapter V of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 as amended from time to time.

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 LODR Regulations 2015 executedwith the Stock Exchanges are given in separate sections forming part of the AnnualReport.

A Certificate from Statutory Auditors of the company M/s. Bansal Bansal & Co.confirming compliance with the conditions of Corporate Governance stipulated in Regulation27 of the Listing Regulations is given in Annexure-5 to the report on DirectorsReport.

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

The provisions of Section 197 Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended are not applicable tothe company 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 fees.

CASH FLOW STATEMENT

In conformity with the provisions of Regulation 34(2) (c) of the ListingRegulations2015 and requirements of Companies Act 2013 the Cash flow Statement for theyear ended March 31 2016 is annexed here to 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 CompaniesAct 2013 read with the Companies [Accounts] Rules 2014 regarding conservation of energytechnology absorption and foreign exchange earning and outgo is given in the Annexure-1.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS SEBI ORDER

As intimated earlier your Company has received an Ex-parte Ad Interim order datedDecember 19 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 markets.However Your Company has received some Interim reliefs in this regard from SEBI videtheir letters dated January 07 2016 & January 15 2016 respectively.

Further your Company has received the final order from Securities And Exchange Boardof India (SEBI) dated June 02 2016 in conformity with the interim order dated December19 2014. However your Company has filed an Appeal with Securities Appellate Tribunal onJuly 012016 in this regard. The matter is under process.

RBI ORDER

As intimated you earlier in the matter Reserve Bank of India vide its order dated 24thSeptember 2014 has cancelled certificate of registration issued to the Company andthereafter your Company had filed an appeal against the above said order with theAppellate Authority Ministry of Finance New Delhi. An Order from the Appellate Authoritydated November 30 2015 has been received in conformity with the order issued by RBI datedSeptember 24 2014. However Your Company has filed a writ petition in December 2015challenging the orders of RBI and Union of India in the Delhi High Court. The same isunder process.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR expenditure incurred by your Company during the financial year 2015-16 was Rs.3.70 lacs which is higher than the statutory requirement of 2% of the average net profitsof last three immediately preceeding financial years.

The CSR initiatives of Your Company were under the thrust areas of Health &Hygiene Education and Donations.

Your Company's CSR Policy statement and Annual Report on the CSR activities undertakenduring the financial year ended March 31 2016 in accordance with Section 135 of theCompanies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014 isannexed to this report as Annexure-3.

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.

ANTI - SEXUAL HARASSMENT

The company has an Anti-Sexual Harassment Policy in place. During the year underreview there were no complaints in this regard.

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 other statutory authorities and take this opportunity to place on recordtheir warm appreciation of the valuable contribution unstinted efforts and the spirit ofdedication by the employees and officers at all levels in the progress of the Companyduring the year under review.

Your directors also express their deep gratitude for the assistance co-operation andsupport extended to your company by the bankers customers as well as the investingcommunity and look forward to their continued support.

FOR AND ON BEHALF OF THE BOARD
Sd /- Sd/-
Place : Mumbai ANIL AGRAWAL BHARAT SHIROYA
Date: 06.08.2016 Managing Director Wholetime Director