To the Members of Paragon Finance Limited
The Board of Directors hereby presents the 30th Annual Report on thebusiness and operations of your Company for the year ended 31st March 2016.
Rs. In Lakhs
| ||Year ||Year |
| ||2015-16 ||2014-15 |
|Total Income ||389.68 ||577.16 |
|Gross Profit ||171.54 ||267.10 |
|Less:Interest ||94.26 ||155.00 |
|Less: Prov. For Standard Assets ||(1.41) ||(1.58) |
|Cash Profit ||78.69 ||113.68 |
|Depreciation ||19.63 ||28.54 |
|Profit (Loss) before Tax and Extra-ordinary Items ||59.06 ||85.14 |
|Extra-ordinary Items ||0.00 ||0.69 |
|Profit (Loss) before Tax ||59.06 ||84.45 |
|Provision for Taxation ||12.27 ||23.20 |
|Transfer from Prov. For Deferred Tax ||(1.40) ||(3.53) |
|Profit after Tax ||48.19 ||64.78 |
|Add: Profit Brought Forward ||893.54 ||841.72 |
|Profit available for Appropriation ||941.73 ||906.50 |
|Less: Transfer to Statutory Reserve ||9.63 ||12.96 |
|Balance carried to Balance sheet ||932.10 ||893.54 |
|Reserve excl. Revaluation Reserve ||1409.30 ||1361.11 |
The Board has not recommended any dividend for the year.
STATE OF THE COMPANY'S AFFAIRS
The Income from Operation decreased by 36.03% and Loans against security of vehiclesdecreased by 31.95% during the year in comparison to the previous year. The ShareholdersFunds as on 31.03.2016 were Rs.1834.30 Lakhs reflecting the inherent financial strengthof the Company.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the companyoccurred between the end of the financial year to which this financial statements relatesand the date of this report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 ('the Act') and rule 12(1) of theCompanies (Management and Administration) Rules 2014 extract of annual return (MGT-9) isAnnexed as Annexure 1.
DETAILS OF SUBSIDIARY/ASSOCIATE COMPANY/ JOINT VENTURE
The Company does not have any Subsidiary Joint Venture or an Associate company.
DETAILS OF BOARD MEETINGS
During the year 8 (eight) number of Board meetings were held as on April 30 2015 May29 2015 July31 2015 August 14 2015 September 30 2015 November 13 2015 February12 2016 and March 18 2016 details of which are given below:
|Name of Directors ||No. of meeting attended |
|Mr. Sanjay Kumar Gupta ||8 |
|Mr. Aloke KumarGupta ||7 |
|Mrs. Shreya Gupta ||7 |
|Mr. SuvobrataGanguly ||8 |
|Mrs. Sujata Agarwal ||8 |
|Mr. Ravi Agarwalla ||8 |
|Mr. Sanjay Goenka ||8 |
|Mr. Pradip Kumar Khandelwal* ||4 |
|Mr. Nirmal Bazaz* ||3 |
|Ms. Parul Rajgaria ||8 |
*Mr. Pradip Kumar Khandelwal& Mr. Nirmal Bazaz cease to be Director in the Companyw.e.f 30.09.2015 and 31.07.2015 respectively.
COMMITTEES OF BOARD
The details of composition of the Committees of the Board of Directors are as under:-
a. Audit Committee
|Sl. No. ||Name ||Chairman/ Members |
|1 ||Mr. Ravi Agarwalla ||Chairman |
|2 ||Mrs. Sujata Agarwal ||Member |
|3 ||Mr. Sanjay Kumar Gupta ||Member |
During the year the Committee had met on 29.05.2015 14.08.2015 13.11.2015 &12.02.2016. Vigil mechanism
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a vigil mechanism for directors and employees to report genuine concerns has beenestablished. To strengthen its policy of corporate transparency the company hasestablished an innovative and empowering mechanism for employees. Employees can report tothe management their concerns about unethical behavior actual or suspected fraud orviolation of the company's code of conduct or ethics policy.
Paragon Finance Limited being a Listed Company has established a Vigil (WhistleBlower) Mechanism and formulated a Policy in order to provide a framework for responsibleand secure whistle blowing/vigil mechanism. The Company is committed to adhere to thehighest standards of ethical moral and legal conduct of business operations and in orderto maintain these standards the Company encourages its employees who have concerns aboutsuspected misconduct to come forward and express these concerns without fear of punishmentor unfair treatment.
b. Nomination & Remuneration Committee
|Sl. No. ||Name ||Chairman/ Members |
|1 ||Mrs. Sujata Agarwal ||Chairman |
|2 ||Mr. Sanjay Goenka ||Member |
|3 ||Ms. Parul Rajgaria ||Member |
During the year the Committee had met on 31.07.2015 & 30.09.2015. c.Stakeholders Relationship Committee
|Sl. No. ||Name ||Chairman/ Members |
|1 ||Mrs. Sujata Agarwal ||Chairman |
|2 ||Ms. Parul Rajgaria ||Member |
During the year the Committee had met on 29.05.2015 14.08.2015 13.11.2015 &13.02.2016.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provision of section 134 (3) (c) of the Companies Act 2013 theDirectors give hereunder the Directors' Responsibility Statement relating to the Accountsof the Company:
(1) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;
(2) The Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the Profitand Loss of the Company for the said period;
(3) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and
(4) The Annual Accounts of the Company has been prepared on a going concern basis.
(5) 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) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS& KEY MANAGERIAL PERSONNEL
In accordance with the provisions of section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Ms. Parul Rajgaria Director isliable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffer herself for re-appointment.
The proposal regarding the re- appointment of Ms. Parul Rajgaria as the Director of thecompany is placed for your approval.
The Board of Directors of the Company recommends the above re-appointment.
In Compliance with clause 36(3) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 brief resume expertise and other details of the Directorproposed to be reappointed are attached to the Notice of the ensuing Annual GeneralMeeting.
During the year Mr. Manoj Kumar Gupta & Mrs. Reena Gupta ceased to be Director ofthe Company w.e.f. 30.04.2015. Mr. Nirmal Bazaz ceased to be the Director of the Companyw.e.f 31.07.2015 and Mr. Pradip Kumar Khandewal ceases to be the Director of the Companyon 30.09.2015. The Board is thankful to all of the Directors for their continuous supportto the Company.
Also Ms. Raveena Goel have been appointed as a Chief Financial Officer of the Companywith effect from 29.04.2016 and Mr. S.N. Khemka ceases to be the CFO of the Company on29.04.2016.
%AGE INCREASE IN REMUNERATION OF KMP FROM LAST YEAR :
1. Mr. Sanjay Kumar Gupta - WTD - 50%
2. Mr. S N Khemka - CFO - 8%
3. Ms. Parul Rajgaria - CS - 14.81%
RISK MANAGEMENT POLICY
In terms of the requirement of the Act the Company has developed and implemented theRisk Management Policy and the Audit Committee of the Board reviews the same periodically.
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to business objectives. Major risks identified by the business and functions aresystematically addressed through mitigating actions on a continuous basis. They arediscussed at the meetings of the board of directors of the company.
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified bystatutory as well as Internal Auditors. Significant Audit observations and follow upactions thereon are reported to the Board. The Board of Directors review adequacy andeffectiveness of the company's internal control environment and monitors theimplementation of audit recommendations.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each Independent Directorsunder section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in section 149(6) of the Companies Act 2013 Clause 49 of theListing Agreement (till 30.11.2015) and Clauses of SEBI (LODR) regulations 2015 (w.e.f01.12.2015).
COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the board and separate its functions of governance andmanagement. As on 31st March 2016 the board consists of 8 members one ofwhom is executive or whole time director one of whom is KMP two of whom areNon-Executive directors and 4 are independent directors. The Board periodically evaluatesthe need for change in its composition and size.
The policy of the Company on director's appointment and remuneration includingcriteria for determining qualifications' positive attributes independence of a directorand other matters provided under sub-section (3) of section 178 of the Companies Act 2013adopted by Board is annexed to the Board's Report. We affirm the remuneration paid to thedirectors is as per the terms laid out in the nomination and remuneration policy of thecompany.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
No significant or material orders were passed by the Regulators or courts or Tribunalswhich impact the going concern status and Company's operation in future.
The Company has not accepted any fixed deposits during the year 2015-16 from thepublic/shareholders.
INTERNAL FINANCIAL CONTROLS
The internal financial controls with reference to the Financial Statements arecommensurate with the size and nature of business of the Company. Details are given inManagement Discussion & Analysis Report.
STATUTORY AUDITORS THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
In the AGM held on 26.09.2014 M/s. Mandawewala& Co. Chartered Accountants havebeen appointed as Statutory Auditors of the Company for a period of 3 years. Ratificationof appointment of Statutory Auditors was done in the last AGM held on 30.09.2015 for theyear 2015-16 and again is being sought from the members of the Company at the ensuing AGMfor the year 2016-17.
Further the report of the Statutory Auditors along with notes forming part of theCompany's accounts as given under Notes (No. 1 - 21) are enclosed to this report. Theobservations made in the Auditors' Report are self-explanatory and therefore do not callfor any further comments.
M/s. S. Ratan & Co. has served as an internal auditor for the financial year2015-16.
CASH FLOW STATEMENT
In conformity with the provisions of Clause 34 of the SEBI (LODR) Regulations 2015the Cash Flow Statement for the year 2015-16 is annexed hereto.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS UNDER SECTION 186.
No such transaction has been entered by the company during the year.
RELATED PARTY TRANSACTIONS
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website.
Your Directors draw attention of the members to Note 1.B.3 to the financial statementwhich sets out related party disclosures.
PARTICULARS OF EMPLOYEES
Pursuant to rule 5(2) & (3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 there is no such employee meeting the criteria underthis rule.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report.
In terms of Section 204 of the Act and Rules made there under M/s. K. Arun & Co.Practicing Company Secretary has been appointed as Secretarial Auditors of the Company.The report of the Secretarial Auditors is enclosed as Annexure 2 to this report. Thereport is self-explanatory and do not call for any further comments.
The Company's shares are listed with BSE having nationwide trading terminal under SEBI(ICDR) regulations 2009. The Listing fees to the Stock Exchanges for the year 2015-16have been paid. The address of the said Stock Exchange is as follows:
The Bombay Stock Exchange
Phiroze Jeejeebhoy Towers Dalal Street Mumbai - 400001.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis has been annexed to this report in terms of Part Bof Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 in Annexure 3.
DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The Company does not engage in any manufacturing activity so there is no consumption ofenergy. The activities of the company do not involve any technology absorption.
|Foreign Exchange Earning and Outgo ||(In Lakhs) |
|I) Foreign Exchange Earnings ||NIL |
|II) Foreign Exchange outgo ||1.23 |
The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed under SEBI (LODR) regulations 2015 andCompanies Act 2013.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc. The Board and the Nomination and RemunerationCommittee ("NRC") reviewed the performance of the individual directors on thebasis of the criteria such as the contribution of the individual director to the Board andcommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairman was alsoevaluated on the key aspects of his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
As per Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 every listed company is required to formulate an ArchivalPolicy for the records which it maintains in Electronic Form.
The Board in its meeting held on 14.11.15 had formulated and adapted the ArchivalPolicy which is uploaded on the website of the Company.
ID FAMILRISATION PROGRAMME
Independent Directors have been given adequate Documents and Annual Reports of LastFive Financial Years so that they get an understanding regarding the working of thecompany.
The IDs have also visited various sites of the company and have met the stakeholders ofthe company so as to get a detailed understanding regarding the Business which would ablethem to form an Independent view regarding the company.
DEMAT SUSPENSE A/C
There are no shares in demat suspense account or unclaimed suspense account as on31.03.2016. CORPORATE SOCIAL RESPONSIBILITY
Your company though does not fall under the compulsory compliance of CSR u/s 135 of theCompanies Act 2013 has decided to voluntarily participate in CSR activities.
DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
The Company is committed to provide a safe and conducive work environment to itsemployees. During the year under review no case of sexual harassment was reported.
The Board of Directors would like to place on record their grateful appreciation of thecooperation and assistance received from the company's customers shareholders employeesbrokers dealers banks financial institutions and all others associated with thecompany.
Your Directors also thank the Central and State Governments and other statutoryauthorities for their continuous support.
| ||On behalf of the Board of Director |
|Place: Kolkata ||Sanjay Kumar Gupta |
|Date: 30.05.2016 ||Executive Director |