To the Members of
M/s. Proaim Enterprises Limited
The Directors are pleased to present the 32nd Annual Report on the businessand operations of your company and the Statements of Account for the year ended 31stMarch 2016.
|Particulars ||F.Y. 2015 - 2016 ||F.Y. 2014 - 2015 |
|Income from Textile & Commodities ||400.44 ||277.59 |
|Income from Share Trading and Finance ||148.51 ||210.60 |
|Total Operational Revenue ||548.95 ||488.19 |
|Other Incomes ||0.89 ||0.06 |
|Total Revenue ||549.84 ||488.25 |
|Profit before Exceptional/Extraordinary items and Tax Dep & Interest ||(180.28) ||(230.70) |
|Depreciation || ||- |
|Interest ||9.10 ||0.44 |
|Exceptional/Extraordinary items ||2.38 ||2.02 |
|Profit before Tax ||(187.01) ||(233.16) |
|Provision for taxation ||- ||- |
|Provision for tax (deferred) ||2.67 ||0.62 |
|Tax adjustment for earlier years ||(1.77) ||(0.80) |
|Profit after tax ||(186.10) ||(233.33) |
|Balance carried forward to balance sheet ||(186.10) ||(233.33) |
|Earnings Per Share ||[147) ||(1.84) |
During the year under review the total revenue of the company is 549.84 Lakhs includingother income as compared to 488.25 Lakhs in the previous year and thereby registering ahike of 12.61%. The volatile market condition affected the company adversely and resultedin Net loss of (186.10) Lacs against the Net loss of Rs. (233.33) Lacs in the previousyear. However the Company manages to minimize its losses as compared to previous year byadministration and business running expenses and discipline management. Further thecompany entered into commodity trading to expand the business. The main reason forincurring such loss during the year is loss on sale of investment. The management of theCompany is hereby very optimistic regarding performance of the Company in future andtaking every steps and making every efforts to turn the Company in to profitableorganization.
In view of losses during the year your Directors have not recommended any dividend onEquity Shares for the year under review.
Your Company has not accepted any deposits within the meaning of Section 73 (1) and 74of the Companies Act 2013 read together with the companies (Acceptance of Deposits)Rules 2014.
Amounts to be transferred to Reserves:
In the current (previous) year no amount was transferred to General reserve of theCompany.
Board of Directors:
The Composition of the Board during the year as per the provisions of Regulation 17(1)of listing regulation read with the Companies Act 2013. During the period under review onthe recommendation of Nomination and Remuneration Committee your Board has appointed Mr.Hardikkumar Bharatbhai Kabariya as an Additional Directors of the Company in the categoryof Independent Director with effect from 28/05/2016 respectively in order to comply withthe requirement of Section 149(1) of the Companies Act 2013. In terms of Section 161 ofthe Companies Act 2013 they will hold office up to the date of the ensuing Annual GeneralMeeting. The Company has received a notice in writing along with deposit pursuant toSection 160 of Companies Act 2013 proposing the appointment of Mr. HardikkumarBharatbhai Kabariya Directors of the Company. Your Board has recommended the appointmentof Mr. Hardikkumar Bharatbhai Kabariya as
Independent Directors of the Company for a period of five consecutive years up to thefifth consecutive Annual General Meeting of the Company not liable to retire by rotation.
During the year Pursuant to Section 152 of the Companies Act 2013 Mrs. Tanu AgarwalDirector retires by rotation at the ensuing Annual General Meeting and being eligibleoffers herself for re-appointment. Your Board has recommended her re-appointment.
Further Mr. Viral Bhatt Director & CFO of the Company tendered his resignationfrom his services on 24/06/2015. The Board appreciates his contribution made by him duringhis tenure of office.
Mr. Hardikkumar Bharatbhai Kabariya has given declarations that he continues to meetthe criteria of independence as laid down under Section 149(6) of the Act and Regulation16(1) (b) of the Listing Regulations.
As required under Regulation 36(3) of the listing Regulations with the stock exchangesthe information on the particulars of Directors proposed for appointment/re-appointmenthas been given in the notice of annual general meeting.
Directors' Responsibility Statement:
In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the CompaniesAct 2013 and based on the information provided by management your Directors statethat:
1. In the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed.
2. Directors have selected such Accounting policies applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the State of affairs of the corporation as at the end of March 31 2016 and of theprofit of the Company for the year ended on that date.
3. Director have taken Proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.
4. Directors have prepared the annual accounts on a 'going concern basis;
5. Director have laid down internal financial controls commensurate with the size ofthe Company and that such financial controls were adequate and were operating effectively.
6. Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
Declarations given by Independent Directors:
The Independent Non-executive Directors of the Company viz. Mr. Zubin Pardiwala Ms.Seema Nirmalsingh Sidhu and Mr. Hardikkumar Bharatbhai Kabariya have affirmed that theycontinue to meet all the requirements specified under Regulation16(1)(b)of the listingregulations in respect of their position as an "Independent Director" of ProaimEnterprises Limited.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Board has carried out an annualevaluation of its own performance as well as the evaluation of the working of itsCommittees and individual Directors including Chairman of the Board. The performanceevaluation of the Board as a Whole Chairman and the Non-Independent Directors was carriedout by the Independent Directors.
While evaluating the performance and effectiveness of the Board various aspects of theBoards functioning such as adequacy of the composition and quality of the Boardtime devoted by the Board to Companys long-term strategic issues quality andtransparency of Board discussions execution and performance of specific dutiesobligations and governance were taken into consideration. The Directors expressed theirsatisfaction with the evaluation process.
Related Party Transactions:
All related party transactions are placed on a quarterly basis before the AuditCommittee and also before the Board for Approval. Prior Omnibus Approval of the AuditCommittee is obtained for the transactions which are of foreseeable and repetitive nature.The particulars of contracts or arrangements with related parties referred to in section188 and applicable rules of the companies act 2013 in Form AOC-2 is provided as AnnexureA.
M/s. Pravin Chandak & Associates Chartered Accountants having Registration No.116627W who are Statutory Auditors of the Company hold office up to the forthcomingAnnual General Meeting and are recommended for re-appointment to audit the accounts of theCompany for the Financial Year 2016-17. As required under the provisions of Section 139 ofthe Companies Act 2013 the Company has obtained written confirmation from M/s. PravinChandak & Associates that their appointment if made would be in conformity with thelimits specified in the said Section.
Observations made in the Auditors Report are self-explanatory and therefore donot call for any further comments under Section 134(1) of the Companies Act 2013. Thereare no qualifications disclaimers and adverse remarks made by M/s. Pravin Chandak &Associates Statutory Auditors of the company in his Audit Report for 2015-16.
Explanations on Observation made by Statutory Auditor:
M/s. Pravin Chandak & Associates Chartered Accountants in his Auditor Report forthe financial year 2015-16 have drawn the attention of the management on some observationsin his audit report. In connection with the same management herewith giving theexplanations as follows:
Though the Company is doing business of Finance & Investments Company had notaccepted any deposits from public. The Company is doing business out of its own fund.However as per section 45IA of Reserve Bank of India Act 1934 Company can not do Finance& Investments business without holding valid Certificate of Registration and whichattracts the penalty of Rs. 5 Lacs u/s 58B (4-A) of the RBI Act 1934. However to makegood of the said default Company had diversified its business line and started newbusiness of Trading in commodities and more than 50% of the total revenue is beengenerated from Textile Business which bar the Company from being NBFC and dispense therequirement of obtaining COR from RBI and RBI will not impose any penalty and even ifpenalty imposed the same will be waived or reduces upon management re-presentation.
As far as contingent liability of Rs. 500000/- u/s 147 of Income Tax Act 1961 isconcerned It is a matter of fact that the demand was raised by the jurisdictionalassessing officer u/s 147 read with section 143(3) of the Income Tax Act 1961 for incomeescaping assessment conducted by the Income Tax Authorities for the Assessment Year2007-08. However the contingent liability for the same is not provided as the managementfeels that the demand raised is likely to be either deleted or substantially reduced asthe company has filed appeal in response to the demand raised by the Assessing Officer.
As far as appropriateness of internal control system is concerned management is havingviews that the company has effective and sufficient internal control system in place forgranting loans and over purchase and sales. The management grants demand loan only eitherto the parties known to the Company or by references which are governed by the Boardpolicies. The Loan and Advances granted by the Company is cosidered as good andrecoverable and do not required any significant provisions and same has been closelysupervised and monitored on regular basis therefore no appraisal renewal Policiesprocedures committee or documents have been prescribed and executed. Its difficultto establish any standard or fixed policy and procedure for granting loans as it dependsupon emergency of funds and other requirements of the clients. Further the control overpurchase and sales of commodities is concerned company has reasonable internal controlssystem according to the size of the company and scale of operations. However as perrecommendation of Auditors the Company is under process to strengthen its controlprocedures.
As one person cannot hold KMP position in more than one company Mrs. Tanu AgarwalDirector of the Company has resigned from the post of Chief Financial Officer of M/s.Five X Tradecom Limited w.e.f. 9th February 2016 and as Whole Time Director of ourcompany M/s. Proaim Enterprises Limited w.e.f 28th May 2016.
Pursuant to the requirements of Section 204(1) of the Act and Rule 9 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P.D. Pandya & Associates Company Secretary in Practice to conduct theSecretarial Audit for the financial year 2015-16. The Secretarial Audit Report as receivedfrom M/s. P.D. Pandya & Associates is appended to this Report as Annexure B.
Explanations on Observation and Qualification made by Secretarial Auditor:
M/s P.D. Pandya & Associates Company Secretary in Practice in his SecretarialAuditor Report for the financial year 201516 have drawn the attention of the management onsome Non Compliances which marked as qualification in his audit report. In connection withthe same management herewith giving the explanations as follows:
The Company is not registered under Maharashtra State Tax on Professions Tradescallings and Employments Tax Act 1975 (Profession Tax Act). The Company will soon obtainvalid Profession Tax number and will comply the same in future.
As pointed out by the secretarial auditors that Company has failed to secure theapproval of the members through postal ballot for exceeding limits for making loans andadvances providing guarantee and security and making of investment u/s 186 of theCompanies Act 2013 during the year. We contend the said oberservation since thecompany's main object is financing and according to 186(11) which specifically exemptsevery company engaged in the business of financing of companies from the ambit of thissection. However the Company has already taken the approval of the members at 31st AnnualGeneral Meeting for the same.
Extract of Annual Return:
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act readwith Rule 12 of Companies (Management and Administration) Rules 2014 an extract ofAnnual Return in prescribed Form MGT-9 is given in the Report as Annexure C.
Particulars of Employees and Related Information:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as under:
The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2015-16 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Name of Director/KMP ||Remuneration Received (In Rs. Lakh) ||% increase in Remuneration in the Financial year 2015-16 ||Ratio of remuneration of each Director to median remuneration of employees |
|1 Mrs. Tanu Giriraj Kishor Agarwal (Executive Director) ||Nil ||Nil ||Nil |
|2 Ms. Seema Nirmal Singh Sidhu (Non-Executive Independent Director) ||Nil ||Nil ||Nil |
|3 Mr. Zubin Pardiwala (Non-Executive Independent Director) ||Nil ||Nil ||Nil |
|4 Viral Bhatt* (Director & CFO) ||0.23 ||Nil ||0.35 |
|5 Stephen Paul# (CFO) ||3.94 ||Nil ||5.85 |
|6 Hardikkumar Kabariya@ ||Nil ||Nil ||Nil |
Note - @Appointed w.e.f 28/05/2016
*Resigned w.e.f. 24/06/2015
#Appointed w.e.f. 10/02/2016
All appointments are / were non-contractual.
Remuneration as shown above comprises of Salary Leave Salary Bonus LeaveTravel Assistance Medical Benefit House Rent Allowance Perquisites and Remuneration onCash basis
The median remuneration of employees of the Company during the financial yearwas Rs. 0.67 Lakh
There were 8 employees on the rolls of Company as on March 31 2016.
During the year under consideration your Company has constituted three committees ofthe Board namely Audit Committee Stakeholder Relationship Committee and Nomination &Remuneration Committee. Details of all the Committees along with their composition termsof reference and meetings held during the year are provided in 'Report on CorporateGovernance forming part of the Annual Report.
Report on Corporate Governance:
The report on Corporate Governance for the year under review as stipulated underListing Regulations 2015 form part of the Annual Report. The certificate from theAuditors of the Company confirming compliance with the conditions of Corporate Governanceis annexed to the Corporate Governance Report.
Management Discussion and Analysis Report:
Further a separate Management Discussion and Analysis Report covering a wide range ofissues relating to Industry Trends Company Performance SWOT analysis Corporate ProcessBusiness Outlook among others is annexed to this Report.
Internal Financial Controls and their Adequacy:
The Company has put in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size of the Company.
In accordance with the provisions of Section 178(3) of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasremuneration policy in place. The objectives and key features of this Policy are:
a. Formulation of the criteria for determining qualifications positive attributes ofDirectors Key Managerial Personnel (KMP) and Senior Management Personnel and alsoindependence of Independent Directors;
b. Aligning the remuneration of Directors KMPs and Senior Management Personnel withthe Companys financial position remuneration paid by its industry peers etc;
c. Performance evaluation of the Board its Committees and Directors includingIndependent Directors;
d. Ensuring Board diversity;
e. Identifying persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down;
The Remuneration policy is available on the Companys Website
Policy on orderly succession for appointment:
The Board has framed a policy which lays down a framework in relation to Orderlysuccession of Directors senior Management based on recommendation made by Nomination andRemuneration Committee.
The key features of the policy are as follows:
Criteria for appointment and removal of Director key managerial personnel andsenior management.
Criteria for performance evaluation.
Criteria for fixing the remuneration of Director key managerial personnel andsenior management.
Vigil Mechanism / Whistle Blower Policy:
The Company has established a vigil mechanism to provide appropriate avenues to theDirectors and employees to bring to the attention of the Management the concerns aboutbehavior of employees that raise concerns including fraud by using the mechanism providedin the Whistle Blower Policy. The details of the said Policy are included in the Report onCorporate Governance which forms part of the Annual Report. The detail of the VigilMechanism is posted on the website of the Company www.shreenathcommmercial.com
During the financial year 2015-16 no cases under this mechanism were reported in theCompany and any of its subsidiaries/ associates.
Significant and Material Orders Passed by the Regulators or Courts or Tribunals:
During the year under report there were no significant material orders passed by theRegulators/ Courts/ Tribunals impacting the going concern status and Companysoperations in future.
Policy for Prevention. Prohibition & Redressal of Sexual Harassment:
The Company has framed policy in accordance with The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
During the financial year 2015-16 no cases in the nature of sexual harassment werereported at any workplace of the company.
Particulars of Loans Guarantees or Investments:
Details of the Investments covered under the provisions of Section 186 of the CompaniesAct 2013 (Act) will be produced for verification to the members at the registered officeof the Company on their request.
Compliance with Mandatory/Non Mandatory requirements:
The Company has complied with all the applicable mandatory requirements of the ListingRegulations.
No postal ballot was held during the year 2015-2016.
Conservation of Energy and Technology Absorption
The particulars under the companies (Disclosure of Particulars in the Report of Boardof Directors) Rules 1988 on conservation of energy and Technology absorption are notapplicable.
There is no inflow and outflow of Foreign Exchange.
Listing of shares
The Shares of the Company are listed on Bombay Stock Exchange (BSE) only and theCompany has paid necessary Listing fees for the year 2016-2017.
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification
The Chief Executive Officer and Chief Financial Officer Certification as required underClause 49 of the Listing Agreements and Chief Executive Officer declaration about the Codeof Conduct is Annexed to this Report.
Green Initiative in Corporate Governance
The Ministry of Corporate Affairs (vide circular nos.17/2011 and 18/2011 dated April 21and April 29 2011 respectively) has undertaken 'Green initiative in corporateGovernance and allowed companies to share documents with its shareholders through anelectronic mode.
Members are requested to support their green initiative by registering/updating theiremail addresses in respect of shares held in dematerialized form with their respectivedepository participants and in respect of shares held in physical form with Companies RTA.
The Board of Directors wishes to express sincere thanks to Bankers Shareholdersclients Financial Institutions customers suppliers and employees of for extendingsupport during the year.
|For and on Behalf of the Board || |
|Sd/- ||Sd/- |
|Tanu Giriraj Agarwal ||Seema Sidhu |
|(Director) ||(Director) |
|Place: Mumbai || |
|Date: 12/08/2016 || |
RELATED PARTY TRANSACTION
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2)
Of the Companies (Accounts) Rules 2014)
This Form pertains to the disclosure of particulars of contracts/arrangements enteredinto by the company with related parties referred to in sub-section (1) of section 188 ofthe Act including certain arms length transactions under third proviso thereto:
Details of material contracts or arrangements or transactions not at arm's lengthbasis: None of the transactions with related parties fall in this category. - None
Details of contracts or arrangement or transactions at arm's length basis:
|Name of Related Party ||Nature of contract /arrangement /transactions ||Duration of the contract/ arrangement /transactions ||Nature of Relationship ||Date(s) of approval by the Board ||Amounts (In Rs.) |
|Giriraj Kishor Agarwal ||Expenses paid on behalf of company u/s 188 (1) (d) ||On going ||Common Directors ||04-04-2015 ||30200 |
|Giriraj Kishor Agarwal ||Office Rent paid u/s 188 (1) (c) ||On going ||Common Directors ||04-04-2015 ||120000 |
|Giriraj Kishor Agarwal HUF ||Short term Borrowings u/s 188 (1) (d) ||On going ||Common Directors ||04-04-2015 ||4700000 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||2820688 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||5034913 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||5046373 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||5116355 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||4763540 |
|Rockon Enterprises Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||5382937 |
|Rockon Capital Market Pvt Limited ||Purchase of Material u/s 188 (1) (a) ||On going ||Common Director ||04-04-2015 ||5072960 |
|Five X Finance & Investment Limited ||Sale of Material u/s 188 (1) (a) ||On going ||Group Company ||04-04-2015 ||641500 |
|Kayaguru Capital Market Pvt Ltd ||Purchase of Material u/s 188 (1) (a) ||On going ||Common Director ||04-04-2015 ||7151040 |