PMC FINCORP LIMITED
Your directors have pleasure in presenting the 34th Annual Report together with theAudited Accounts of the company for the year ended 31 March 2019.
The Company's financial performance for the year under review along with previousyear's figures are given hereunder: Particulars for the Year ended 31st March 2019.
(Amount in Rs.)
|PARTICULARS || |
Year ended 31.03.2019
Year ended 31.03.2018
|Gross Income ||84992328 ||57043912 |
|Profit/Loss Before Interest and Depreciation (EBITDA) ||31186732 ||35428340 |
|Finance Charges ||8789984 ||20701034 |
|Gross Profit/Loss ||22396748 ||14727306 |
|Provision for Depreciation ||345848 ||534470 |
|Net Profit Before Tax ||22050900 ||14192836 |
|Provision for Tax ||6115435 ||4057919 |
|Net Profit After Tax ||15935465 ||10134917 |
Your Company has earned Income from operation and profit before tax aggregated to Rs.8.50 Crores and Rs. 2.21 Crores during the current year respectively as compared toIncome Rs. 5.70 Crores and Profit Rs. 1.42 Crores during the previous year.
Your Director's do not recommend any dividend for the financial year ended on 31stMarch 2019 and no amount has been transferred to General reserve.
The paid up equity share capital as on March 31 2019 is Rs. 509061200. There was nopublic issue rights issue bonus issue or preferential issue during the year. The companyhas not issued shares with differential voting rights sweat equity shares not it hasgranted any stock options.
The Company's Share are Listed with BSE Limited Mumbai. Your Company has paid theAnnual Listing Fee up to date and there are no arrears. The BSE have nation-wide tradingterminals and therefore provide full liquidity to the investors.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligation and Disclosure Requirement) Regulations 2015. The said regulationswhich became effective December 1 2015 required all Listed Companies to enter into thefresh Listing Agreements within six months from the effective date. Accordingly theCompany entered into Listing Agreement with BSE Limited during February 2016.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy and technology absorption
The company has no activity relating to consumption of energy or technology absorption.
The Company does not have any foreign exchange earnings.
RISK MANAGEMENT FRAMEWORK
The Company has a robust internal business management framework to identify evaluatebusiness risks and opportunities which seeks to minimize adverse impact on the businessobjectives and enhance the Company's business prospects. As an NBFC PMC is exposed tocredit risk liquidity risk and Interest rate risk. Risk Management is an Integral part ofthe Company's business strategy.
Committees of the Board
The Company has the following Committees constituted in accordance with the CompaniesAct 2013 and SEBI (LODR) Regulations 2015:
Nomination & Remuneration Committee
Stakeholders Relationship Committee
The details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in the "Report on CorporateGovernance" forming part of this Annual Report in Annexure -IV.
VIGIL MECHANISM & WHISTLE BLOWER POLICY
The Company has a vigil mechanism and a whistle blower policy. The same has been postedon the Company's website and the details of the same are given in the Corporate GovernanceReport.
The Company has adopted the various policies in compliance with the provisions of SEBI(LODR) Regulations 2015 at their duly convened Board meetings held on 29th December2015:
1. Policy for Determination of Materiality of Disclosures.
2. Policy on Materiality of Related Party Transactions.
3. Adoption of policy on preservation of documents.
4. Adoption of archival policy.
The details of the Policy are available on the website of the Company atwww.pmcfinance.in.
The company has been registered with Reserve Bank of India as Non Banking FinanceCompany vide Registration No. 12.00128 Dated 1st April 1998. Your Company is categorizedas a Non-deposit taking Non-Banking Financial Company. The Company has not accepted anydeposit from the public during the year pursuant to the provisions of Section 73 ofCompanies Act 2013.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 some amount is due fortransfer to investor education and protection fund. Transfer of funds is in under process.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEANDTHE DATE OFTHE REPORT
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.
Our Company has in accordance with the provisions of Section 45IC of the ReserveBank of India (RBI) Act 1934 created a Reserve Fund and during the year under review theCompany has transferred an amount of Rs. 3192407/- (Rupees Thirty One Lakh Ninty TwoThousand Four Hundred Seven Only) out of the profits of the year to the said Reserve Fund.
DEMATERILISATION OF SHARES
Your Company has connectivity with NSDL & CDSL for dematerlisation of its equityshares. The ISIN no. INE793G01035 has been allotted for the company. Therefore the memberand/or investors may keep their shareholding in the electronic mode with their DepositoryParticipates.
REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the company will be provided upon request. In terms of Section 136 of theAct the Report and Accounts are being sent to the Members and others entitled theretoexcluding the information on employee's particulars which is available for inspection bythe members at the Registered Office of the Company during business hours on working daysof the Company up to the date of ensuing AGM. Any Member is interested in obtaining a copythereof such Member may write to the Company Secretary in this regard.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The Company being a non-banking finance company registered with the Reserve Bank ofIndia and engaged in the business of giving loans is exempt from complying with theprovisions of section 186 of the Companies Act 2013 in respect of loans and guarantees.Accordingly the disclosures of the loans given as required under the aforesaid sectionhave not been given in this Report.
Information regarding investments covered under the provisions of section 186 of thesaid Act are detailed in the financial statements.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
RELATED PARTY TRANSACTIONS
Transaction entered with related parties for the year under review were in the ordinarycourse of business and are placed before the Audit Committee on regular basis. All thetransactions entered with related parties do not attract the provisions of Section 188 ofthe Companies Act 2013 except one related party transaction which is covered undersubsection (1) of section 188 of the Companies Act 2013 the particulars of said contractor arrangement with related party in the Form AOC-2 is annexed as Annexure 'I'.
A policy on materiality of related party transactions and dealing with related partytransactions is placed on the Company's website www.pmcfinance.in.
SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval from the Ministry of Corporate Affairs the Institute ofCompany Secretaries of India (ICSI) has on 23 April 2015 notified the SecretarialStandards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2)effective from 1 July 2015. The Company is compliant with the same.
Sunil K. Gupta & Associates Chartered Accountants who are the Statutory Auditorsof the Company hold office in accordance with the provisions of the Act for a period offive years from the conclusion of the 32nd Annual General Meeting (AGM) until theconclusion of the 37th AGM. In accordance with Section 139 of the Act and the Companies(Audit and Auditors) Rules 2014 the appointment of Statutory Auditors needs to beratified by the members at every AGM. The Company has received a confirmation from SunilK. Gupta & Associates that their appointment if ratified at the 34th AGM will be inaccordance with Sections 139 and 141 of the Act and rules made thereunder. Accordinglythe Members are requested to ratify the appointment of the Statutory Auditors at the 34thAGM.
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thecompany has appointed M/s Ashu Gupta & Co. Company Secretaries as SecretarialAuditors of the Company to undertake the secretarial audit of the Company for the FY2018-19. The Secretarial Audit report MR-3 submitted by Company Secretary in Practice isenclosed as part of this report Annexure-II.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS
As required under section 204(1) of the Companies Act 2013 the Company has obtained asecretarial audit report. Certain observations made in the report with regard to duringthe period Registrar of Companies Kanpur issued a notice regarding Complaint against thecompany dated 04.12.2018 vide no. TC/COMP/20-6998/6147 for which company filed reply on04.01.2018.
M/s. KPSP & Associates (formerly known as Krishan K Aggarwal & Associates)Chartered Accountants (FRN: 019471N) who has been appointed as Internal Auditors of theCompany during last financial year for a period of three years is continuing as internalauditors . Their reports are being reviewed by the Audit Committee from time to time.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Controls with proper checks to ensure thattransactions are properly authorised recorded and reported apart from safeguarding itsassets. These systems are reviewed and improved on a regular basis. It has a comprehensivebudgetary control system to monitor revenue and expenditure against approved budget on anongoing basis.
The internal auditors of the Company review the controls across the key processes andsubmits reports periodically to the Management and significant observations are alsopresented to the Audit Committee for review. Follow up mechanism is in place to monitorthe implementation of the various recommendations.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
In accordance with Section 178 and other applicable provisions if any of the CompaniesAct 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreementthe Board of Directors at their meeting held on 28th September 2014 formulated and/orreconstituted the Nomination and Remuneration Committee and Policy of your Company on therecommendations of Nomination and Remuneration Committee. The salient aspects covered inthe Nomination and Remuneration Policies relating to appointment of Directors payment ofManagerial remuneration Directors qualifications positive attributes independence ofDirectors and other related matters as provided under Section 178(3) of the Companies Act2013.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Board of Directors duly met 7 times during the financial year from 1st April 2018to 31st March 2019.
Pursuant to provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 The Board of Directorshas carried out an annual performance evaluation of its own performance the Directorsindividually including Independent Directors. The Chairman of the Board who were evaluatedon parameters such as level of engagement and contribution and independence of judgmentthereby safeguarding the interest of the Company.
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 the Independent Directors helda meeting on 14th February 2017 and they inter alia:
1. Reviewed the Performance of Non-Independent Directors and the Board as whole.
2. Reviewed the performance of the chairperson of the Company.
3. Assessed the quality quantity and timeliness of flow of Information between theCompany Management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
The Board of your Company consists of the following Directors:
|Category ||Name of Directors |
|Executive Director ||Mr. Raj Kumar Modi Managing Director |
|Non - Executive - Non - Independent Directors ||Mrs. Rekha Modi |
| ||Mr. Pramod Gupta |
|Non - Executive Independent Directors ||Mr. V.B. Aggarwal* |
| ||Mr. Mahavir Prasad Garg** |
* Resigned with effect from December 16 2018.
** Appointed as Additional Independent Director with effect from January 14 2019.
The composition of the Board is in line with the requirements of the Companies Act2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations2015. All the Directors are having vast knowledge and experience in their relevant fieldsand the Company had benefitted immensely by their presence in the Board. The key Boardqualifications expertise attributes are given in details in the Report on CorporateGovernance forming part of this Report.
According to the Companies Act 2013 at least two-thirds of the total number ofdirectors (excluding independent directors) shall be liable to retire by rotation. Mrs.Rekha Modi Director (DIN: 01274200) retires at the ensuing Annual General Meeting (AGM)and being eligible offers himself for re-appointment. The Board of Directors recommendsthe re-appointment of Mrs. Rekha Modi as Director of the Company.
a) Changes in Directors and Key Managerial Personnel (KMP) during the FY 2018 - 2019
During the FY 2018 - 2019 Mr. Mahavir Prasad Garg (DIN: 00081692) has been appointedas the Additional Independent Director on the Board with effect from February 14 2019.The Board of your Company recommends the regularization of appointment of Mr. MahavirPrasad Garg in the ensuing AGM for a period of five years.
b) Declaration by Independent Directors
The Company has received necessary declaration from each Independent Directors undersection 149(7) of the Companies Act 2013 that he/she fulfills all the requirements asstipulated in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits from the public or itsemployees under Section 73 of Companies Act 2013 and rules made thereunder during theyear under review.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act 2013 Corporate SocialResponsibility Policy is not applicable on your Company. Accordingly the CSR Committee wasnot constituted.
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act readwith Rule 12 of the Companies (Management and Administration) Rules 2014 an extract ofAnnual Return in prescribed Form MGT - 9 is appended as Annexure III to thisReport.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) Regulations 2015 forms part of this Annual Report.
A report on corporate governance as per the Listing Regulations is attached and formspart of this report. The report also contains the details as required to be provided onthe composition and category of directors number of meetings of the board composition ofthe various committees including the audit committee nomination and remunerationcommittee stakeholders relationship committee and corporate social responsibilitycommittee annual board evaluation remuneration policy criteria for board nomination andsenior management appointment whistle blower policy/vigil mechanism disclosure ofrelationships between directors inter-se state of company's affairs etc. The managingdirector and the chief financial officer have submitted a certificate to the boardregarding the financial statements and other matters as required under regulation 17(8) ofthe Listing Regulations.
COMPLIANCE WITH RBI GUIDELINES
The Company is registered with the Reserve Bank of India as a NBFC within theprovisions of the NBFC (Reserve Bank of India) Directions 1998. The Company continues tocomply with all the requirements prescribed by the Reserve Bank of India as applicable toit.
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c. BONUS SHARES
The Company has not issued any Bonus Equity Shares during the year under review.
d. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
And your Directors would also like to take this opportunity to express theirappreciation for the dedicated efforts of the employees of the Company.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
|Place : New Delhi ||(RAJ KUMAR MODI) |
|Date : 30.05.2019 ||(Managing Director) |
| ||DIN : 01274171 |