To the Members of the Company
Your Directors have pleasure in presenting the 36th Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2018. The Financial Results of the Company are summarized below:
(Rs. In Lacs)
|PARTICULARS ||STANDALONE YEAR ENDED 31ST MARCH 2018 ||STANDALONE YEAR ENDED 31ST MARCH 2017 ||CONSOLIDATED YEAR ENDED 31ST MARCH 2018 ||CONSOLIDATED YEAR ENDED 31ST MARCH 2017 |
|Income from Operations ||733.57 ||539.83 ||733.57 ||539.83 |
|Other Income ||1.77 ||3.23 ||1.77 ||3.23 |
|Profit Before Depreciation and Taxes ||339.18 ||282.99 ||339.18 ||282.99 |
|Less: Depreciation ||(0.53) ||(0.59) ||(0.53) ||(0.59) |
|Less : Provision for : || || || || |
|(a) Income tax ||(93.85) ||(88.49) ||(93.85) ||(88.49) |
|(b) Deferred tax ||- ||-- ||- ||-- |
|Income Tax paid of Earlier years ||(1.75) ||(0.56) ||(1.75) ||(0.56) |
|Provisions for Loans & Advances || || || || |
|Profit for the Year ||243.04 ||194.47 ||243.04 ||194.47 |
|Share of profit and loss of associates ||- ||- ||516 ||782 |
|Profit for the period (After adjustment ||243.04 ||194.47 ||243.05 ||194.48 |
|for associates) || || || || |
|Earnings Per Share (EPS) (Rs.) (Basic) ||2.24 ||1.79 ||2.24 ||1.79 |
During the year under review total revenue stood at 7.35 Core as compared to 5.43 Corefor the previous year. Profit after tax for the period stood at 2.43 Crore as compared to1.94 Crore for the previous year.
CASH FLOW STATEMENT
In conformity with the provisions of Regulation 34(2)(c) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and requirements of CompaniesAct 2013 the Cash Flow Statement for the year ended 31st March 2018 isannexed hereto as a part of the Financial Statements.
The directors are pleased to recommend the dividend for the financial year 2017-18 onEquity Shares of Rs.10/- each at Rs. 0.25/- per equity share equivalent to 2.5 % of thepaid up share capital of the Company aggregating to Rs. 2712825 /- (Rupees Twenty SevenLakhs Twelve Thousand Eight Hundred and Twenty Five Only).
MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisreport.
Management Discussion And Analysis
Pursuant to Listing Regulations 2015 the Management Discussion and Analysis isattached hereto and forms part of this Report.
CORPORATE GOVERNANCE REPORT
The Report on Corporate Governance along with the Secretarial Auditors' Certificate onits compliance forms part of this Report and is annexed hereto. A declaration signed bythe Chief Financial Officer and Managing Director in regard to compliance with the Code ofConduct by the Board members and Senior Management Personnel also forms part of thisReport.
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).
The Equity Shares of the Company are presently listed at BSE Ltd and Calcutta StockExchange Limited. The company is regular in payment of listing fees.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of section 134(3)(m) of the Companies Act2013 read with the Companies [Accounts] Rules 2014 regarding conservation of energytechnology absorption and foreign exchange earning and outgo is given in "Annexure 1" to this Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The company does not have holding or subsidiary companies during the year and no othercompany has become holding / subsidiary/ joint venture. However it has one associatecompany details are as under:
|Name of the Company ||CIN/GLN ||CONCERN ||% of shares held by Company ||Applicable Section |
|Lemonade Shares & ||U67100MH2010PTC205455 ||Associate Company ||46.81 ||2(6) |
|Securities Pvt Ltd. || || || || |
Statement containing salient features of financial statements of Associate Companypursuant to section 129 of the Companies Act 2013 (Act) read with Rule 5 of the Companies(Accounts) Rules 2014 is annexed to this Report in the prescribed Form AOC-1 as"Annexure 2".
RELATED PARTY TRANSACTIONS
All transactions with related parties entered into during the financial year 2017-18were at arm's length basis and in the ordinary course of business and in accordance withthe provisions of the Companies Act 2013 and the SEBI Listing Regulations. During theFinancial Year 2017-18 there have been no related party transactions of the Company withits Directors and Key Managerial Personnel or their relatives or associate companies asprescribed under Section 188 of the Companies Act 2013 and SEBI Listing Regulations whichcould have had a potential conflict with the interests of the Company.
All transactions with related parties are placed before the Audit Committee forapproval. An omnibus approval of the Audit Committee is obtained for the related partytransactions which are repetitive in nature and the particulars of contracts enteredduring the year as per Form AOC 2 is enclosed as "Annexure 3" to this Report.The Audit Committee reviews all transactions entered into pursuant to the omnibus approvalso granted on a quarterly basis.
Transactions with related parties are disclosed in the Notes to Accounts in the AnnualReport. All transactions with related parties are at arms' length.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
There was no change in the composition of Board of Directors during the year underreview. However Mr. Kirit Dharod has resigned from the post of Company Secretary &Compliance Officer w.e.f 15th May 2018. At present there is no CompanySecretary to act as a Compliance Officer of the company. However Company is under processto recruit a suitable candidate for the post of Company Secretary.
RETIREMENT BY ROTATION
Mr. Anil Agrawal retires by rotation at the ensuing Annual General Meeting and beingeligible offer himself for re-appointment.
The Board of Directors met 4 times during the financial year ended March 31 2018details of which are given in the Report on Corporate Governance. All the Directorsactively participated in the meetings and provided their valuable inputs on the mattersbrought before the Board of Directors from time to time. Additionally on December 122018 the Independent Directors held a separate meeting in compliance with therequirements of Schedule IV of the Companies Act 2013 and the provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015
DECLARATIONS BY INDEPENDENT DIRECTORS
Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act2013 the Company has received individual declarations from all the Independent Directorsconfirming that they fulfill the criteria of independence as specified in Section 149(6)of the Companies Act 2013.
With a view to familiarizing the independent directors with the Company's operationsas required under the Listing Regulations 2015 the Company held programmes forindependent directors for familiarizing them with the Company NBFC industry businessmodel of the Company their roles rights and responsibilities etc. Details of suchfamiliarization programmes are placed on the Company's website.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended March 31 2018 the Board ofDirectors hereby confirms that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanations relating to material departures whereverapplicable;
(b) such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2018 and of theprofits of the Company for the year ended on that date;
(c) proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts of the Company have been prepared on a going concern basis;
(e) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD
The Nomination and Remuneration Committee of the Board has formulated a PerformanceEvaluation Framework under which the Committee has identified criteria upon which everyDirector every Committee and the Board as a whole shall be evaluated. During the yearunder review the evaluation of every Director every Committee and the Board had beencarried out.
BUSINESS RISK MANAGEMENT POLICY
The Board of Directors of the Company has put in place a Risk Management Policy whichaims at enhancing shareholders' value and providing an optimum risk-reward trade off. Therisk management approach is based on a clear understanding of the variety of risks thatthe organization faces disciplined risk monitoring and measurement and continuous riskassessment and mitigation measures.
PARTICULARS OF EMPLOYEES AND REMUNERATION
The information as required under the provisions of Section 197(12) of the CompaniesAct 2013 and Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in "Annexure 4" attached herewith and whichforms part of this report.
AUDIT COMMITTEE AND THEIR REPORTS:
The details pertaining to composition of Audit Committee are included in the Report onCorporate Governance.
(i) Statutory Auditors
Pursuant to the provisions of Section 139 of Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 as amended M/s A.R. Sodha & Co CharteredAccountants Mumbai (Firm Registration No. 110324W) the Statutory Auditors of theCompany hold office up to the conclusion of Fortieth Annual (40th) GeneralMeeting. The Company has received a certificate from the said Auditors that they areeligible to hold office as the Auditors of the Company and are not disqualified. Therequirement to place the matter relating to appointment of Auditors for ratification byMembers at every Annual General Meeting has been done away with vide notification datedMay 7 2018 issued by the Ministry of Corporate Affairs New Delhi. Accordingly noresolution is proposed for ratification of appointment of Auditors who were appointed inthe Annual General Meeting held on 9th September 2017.
(ii) Secretarial Auditors
Pursuant to the provisions of the Section 179(3) and 204 of the Companies Act 2013read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules 2014 and as ameasure of good Corporate Governance practice the Board of Directors of the Companyhereby appointed M/s. R M Mimani & Associates LLP Practicing Company Secretaries asSecretarial Auditors of the Company for the Financial Year 2017-18. The report of theSecretarial Auditors is enclosed as "Annexure 5" to this report.
(iii) Internal Auditors
M/s. Siddhant Shah & Co Chartered Accountants Mumbai has performed their duties asan Internal Auditors of the company for the F.Y 2017-18 and their report is reviewed bythe Audit Committee from time to time.
OBSERVATIONS OF STATUTORY AUDITORS ON FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 312018:
Details of Statutory Audit Qualification:
The Company has not provided for defined benefit obligation in the nature of gratuitybased on the requirement of Accounting Standard-15 (Revised) i.e. "EmployeeBenefit" which requires defined benefit obligation to be recognized based onactuarial valuation basis. In absence of valuation we are unable to quantify the impact ofabove on the net profit for the year and liabilities as on reporting date.
COMMENTS ON STATUTORY AUDITOR'S REPORT
As regards not making provision for retirement benefits of employees the same has notbeen done in view of the meager staff strength.
COMMENTS ON SECRETARIAL AUDITOR'S REPORT
With regard to point no. (i) and (ii)
With regard to point no. (i) of 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 theses dues.
With regard to point no. (ii) The company has prepared consolidated financialstatements for the financial year 2017-18 as required under section 129 of the companiesAct 2013 which includes previous year's figures. The Company is in prosses of filingapplicable E-Form.
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 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 to commensuratewith its size and nature of its business.
VIGIL MECHANISM/WHISTLEBLOWER POLICY
The Company has a Vigil Mechanism named Whistleblower Policy' to deal withinstances of fraud and mismanagement if any. The Board has adopted a Whistle BlowerPolicy which is in compliance with the provisions of Section 177(10) of the Companies Act2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 to promote reporting of any unethical or improper practice or violationof the company's Code of Conduct or complaints regarding accounting auditing internalcontrols or disclosure practices of the company. It gives a platform to the Whistleblowerto report any unethical or improper practice (not necessarily violation of law) and todefine processes for receiving and investigating complaints. The Vigil Mechanism Policyhas been uploaded on the website of the Company at www.comfortfincap.com.
NOMINATION & REMUNERATION COMMITTEE
A Nomination and Remuneration Committee is in existence in accordance with theprovisions of sub-section (1) of Section 178 of the Companies Act 2013. Kindly refersection on Corporate Governance under head Nomination & Remuneration Committeefor matters relating to constitution meetings functions of the Committee and theremuneration policy formulated by this Committee.
An Audit Committee is in existence in accordance with the provisions of Section 177 ofthe Companies Act 2013. Kindly refer section on Corporate Governance under headAudit Committee' for matters relating to constitution meetings and functions ofthis Committee.
During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.
The Company is not required to undertake the Cost Audit as required under Section 148of the Companies Act 2013.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on March 31 2018 inForm MGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are available on Company's websitewww.comfortfincap.com.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantees and investments under the provisions of Section 186 of theCompanies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014 as on 31st March 2018 are given in the notes to the FinancialStatements.
DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued any equity shares with differential rights during the yearunder review and hence no information as per provisions of Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
DISCLOSURE RELATING TO SWEAT EQUITY SHARES
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Rule 8(13) of the Companies (Share Capital andDebenture) Rules 2014 is furnished.
DISCLOSURES IN RESPECT OF VOTING RIGHTS NOT DIRECTLY EXERCISED BY EMPLOYEES
There are no shares held by trustees for the benefit of employees and hence nodisclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014has been furnished.
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.comfortfincap.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 of Prevention of Insider Trading based onthe SEBI (Prohibition of Insider Trading) Regulations 2015. The same has been placed onthe website of the Company www.comfortfincap.com.
DISCLOSURE ANTI SEXUAL HARASSMENT POLICY
The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted a policy in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules there under.All employees (permanent contractual temporary trainees) are covered under the saidpolicy. An Internal Complaints Committee has also been set up to redress complaintsreceived on sexual harassment.
During the financial year under review the Company has not received any complaints ofsexual harassment from any of the women employees of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
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 dated19th December 2014. However your Company has filed an Appeal with SecuritiesAppellate Tribunal (SAT) Mumbai on 1st July 2016 in this regard. The matteris under process. The Company has received Interim reliefs in this regard from SEBI videorder dated 25th August 2016.
SEBI vide its order dated 2nd April 2018 given directions restraining theCompany from accessing the securities market and further prohibiting it from buyingselling or otherwise dealing in securities directly or indirectly or being associatedwith the securities market in any manner whatsoever for a period of three years fromthe date the order.
Except above no significant or material order has been passed by any regulatortribunal or court which would impact the going concern status of the Company and itsfuture operations.
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 Calcutta Stock Exchange Limited 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/- |
| ||Bharat Shiroya ||Anil Agrawal |
| ||Managing Director ||Director |
|Place: Mumbai || || |
|Date: August 14 2018 || || |