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Transwarranty Finance Ltd.

BSE: 532812 Sector: Financials
NSE: TFL ISIN Code: INE804H01012
BSE 00:00 | 20 Mar 4.72 -0.23
(-4.65%)
OPEN

4.94

HIGH

5.00

LOW

4.51

NSE 00:00 | 20 Mar 4.90 0.10
(2.08%)
OPEN

4.50

HIGH

4.95

LOW

4.50

OPEN 4.94
PREVIOUS CLOSE 4.95
VOLUME 1157
52-Week high 9.38
52-Week low 3.57
P/E 157.33
Mkt Cap.(Rs cr) 12
Buy Price 4.51
Buy Qty 200.00
Sell Price 5.00
Sell Qty 7500.00
OPEN 4.94
CLOSE 4.95
VOLUME 1157
52-Week high 9.38
52-Week low 3.57
P/E 157.33
Mkt Cap.(Rs cr) 12
Buy Price 4.51
Buy Qty 200.00
Sell Price 5.00
Sell Qty 7500.00

Transwarranty Finance Ltd. (TFL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 24th Annual Report of theCompany along with the financial statements for the financial year ended 31stMarch 2018.

Financial Highlights

The table given below gives the financial highlights of the Company for the year ended31st March 2018 as compared to the previous financial year.

(Rs. in Lakhs)

Particulars 2017-18 2016-17
Standalone
Total Income 962.49 1185.62
Total Expenses 927.52 1097.27
Provision for taxation 20.49 16.75
MAT Credit Entitlement (16.68) (2.74)
Deferred tax 0.80 (0.03)
Net profit for the year 8.12 74.37
Profit available for appropriation 8.12 74.37
Appropriations:
Reserves u/s.45 IC of RBI Act 1.62 14.87

Dividend

In order to consolidate the financial position of the Company the Board has decided toskip the dividend for the financial year ended 31st March 2018.

Subsidiary Companies

Vertex Securities Limited (VSL) Vertex Commodities & Finpro Private Limited(VCFPL) and Transwarranty Capital Market Services Private Limited (TCMSPL) are thesubsidiaries of the Company.

During the year under review Transwarranty Consultants Pvt. Ltd. erstwhile whollyowned subsidiary of the Company merged with the Company pursuant to an Order passed by theHon'ble National Company Law Tribunal (NCLT) Mumbai Bench on 21st February2018.

VSL and VCFPL are engaged in the following businesses:

1. Stock and currency broking services to retail HNI and institutional clients.

2. Commodity broking services to retail HNI and corporate clients.

3. Merchant banking.

4. Corporate Agency for Insurance

Vertex Securities Limited (VSL) is a member of-

1. National Stock Exchange of India Limited (NSE)

2. Bombay Stock Exchange Limited (BSE)

3. National Securities Depository Ltd. (NSDL) (for depository services)

4. SEBI registration as a Category I Merchant Banker

5. Association of Mutual Funds of India (AMFI) registered Mutual Fund Advisor.

Vertex Commodities & Finpro Private Limited (VCFPL) is a member of -

1. Multi Commodity Exchange of India (MCX)

2. National Commodity and Derivative Exchange (NCDEX)

3. National Multi Commodity Exchange (NMCE)

During the year ended 31st March 2018 the subsidiary company VertexSecurities Limited earned revenue of Rs. 765.02 lakhs as compared to Rs. 659.35 lakhs inthe previous year. The operations have recorded a profit of Rs. 77.32 lakhs as compared toa profit of Rs. 39.33 lakhs in the previous year.

The subsidiary company Vertex Commodities & Finpro Private Limited had totalrevenue of Rs. 110.73 lakhs and loss of Rs. 2.74 lakhs as on 31st March 2018as against the total revenue of Rs. 139.78 lakhs and profit of Rs. 9.01 lakhs respectivelyin the previous year.

The subsidiary company Transwarranty Capital Market Services Private Limited hadrecorded a loss of Rs. 0.25 lakh as on 31st March 2018 as against Rs. 0.56lakh in the previous year.

During the year under report the consolidated revenue of the Company was Rs. 1782.29lakhs as against Rs. 1983.45 lakhs in the previous year. The net profit after tax was Rs.82.46 lakhs as against profit of Rs. 122.04 lakhs in the previous year.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of the Company's subsidiariesin Form AOC 1 is attached to the financial statements of the Company.

Scheme of Amalgamation of Transwarranty Consultants Pvt. Ltd. with the Company

Transwarranty Consultants Pvt. Ltd. (TCPL) a wholly owned subsidiary of the Companywas amalgamated with the Company in terms of the Scheme of Amalgamation (Rs. Scheme')sanctioned by the National Company Law Tribunal vide its Order dated 21stFebruary 2018. The appointed date of the Scheme was 1st May 2017.

Listing on Stock Exchange

The Company's Equity Shares continue to be listed on National Stock Exchange of IndiaLtd. and The BSE Ltd.

Management Discussion and Analysis

A detailed review on the operations and performance of the Company and its business isgiven in the Management Discussion and Analysis which forms part of this report as AnnexureA.

Corporate Governance Report

A detailed report on Corporate Governance and Auditors Certificate on compliance withCorporate Governance Requirements by the Company is attached and also forms part of thisreport as Annexure B.

Consolidated Financial Statements

Pursuant to Section 136 of the Companies Act 2013 the standalone financial statementsof the Company consolidated financial statements along with the relevant documents formpart of the Annual Report and separate audited accounts in respect of the subsidiaries areavailable on the website of the Company.

Auditors' Report

There are no qualifications in the Auditors' Report for standalone accounts forfinancial year ended 31st March 2018. Referring to observations given under"Basis for Qualified Opinion" in the Independent Auditors' Report forConsolidated Accounts it is clarified that as the Company has initiated legal actions forthe recovery of the dues and it will not be prudent to make any provisions as the casesare in various stages in different Courts.

The Statement on Impact of Audit Qualification submitted to the stock exchange pursuantto SEBI Listing Regulations for modified opinion in Audit Report for consolidated accountsis appended to this report as Annexure C.

Directors' Responsibility Statement

In terms of Section 134 (3) (c) of the Companies Act 2013 your Directors state that:

1. In preparation of annual accounts for the year ended 31st March 2018the applicable accounting standards have been followed along with proper explanationsrelating to material departures if any;

2. They have selected such accounting policies and 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 Company as at 31st March 2018 and profit of theCompany for the year ended on that date;

3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts on a going concern basis;

5. They have laid down proper internal financial controls to be followed by the Companyand they were adequate and operating effectively and

6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.

Public Deposits

During the financial year under report the Company has not accepted deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014. No amount on account of principal or interest on deposits frompublic was outstanding as on the date of the balance sheet.

Particulars of Loans Guarantees and Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Directors

In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. Kumar NairDirector of the Company (DIN 00320541) retires by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment and your Board hasrecommended his re-appointment.

Familiarization Programme for Directors

At the time of appointment of a Director a formal letter of appointment is given tothe Director. The Director is also explained in detail the role function duties andresponsibilities expected from him/her and also compliance required from him/her under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 [Listing Regulations]. Further the ManagingDirector also will have one to one discussion with the newly appointed Director tofamiliarize him/her with the Company's operations.

Performance Evaluation of the Board

The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by SEBI Listing Regulations.

The evaluation was done on various parameters like vision and strategy Boardparticipation disclosure of interest review of risk management policies leadershipskills good governance marketing and corporate communications etc.

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 board reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.

In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole was evaluated taking into account theviews of executive directors and non-executive directors. The same was discussed in theboard meeting that followed the meeting of the independent directors at which theperformance of

the board its committees and individual directors was also discussed. Performanceevaluation of independent directors was done by the entire board excluding theindependent director being evaluated.

Meetings

The details regarding the meeting of the Board of Directors Committees of the Boardand meeting of Independent Directors are provided in the Report on Corporate Governancewhich forms part of the Annual Report.

Extract of Annual Return

An extract of Annual return in Form MGT-9 is appended to this report as Annexure D.

Risk Management

The Company has Risk Management Systems in place including identification therein theelements of risk if any which in the opinion of the Board may threaten the existence ofthe Company. After identifying the risk and assessing the level of impact controls areput in place to mitigate the risk by the concerned executives/the Board to control theexposure of the risk and balance the impact of risk on a continuous basis.

Nomination and Remuneration Policy

The Board on the recommendation of Nomination Remuneration and Compensation Committeehas adopted a policy for selection appointment and remuneration of Directors KeyManagerial Personnel and Senior Management. The details of this Policy are provided in theCorporate Governance Report.

Sexual Harassment Policy

In line with the requirements of Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (Act) the Company has in place a policy to preventsexual harassment of women at workplace. Your Directors state that during the year underreview there were no cases filed pursuant to the above Act.

Whistle Blower Policy

The Company has adopted a Whistle Blower Policy as part of vigil mechanism to provideappropriate avenues to the Directors and Employees to bring to the attention of themanagement any issue which is perceived to be in violation of or in conflict with thefundamental business of the Company. The employees are encouraged to voice their concernsby

way of whistle blower policy and all the employees have been given access to the AuditCommittee. All cases registered under the Code of Business Principles and Whistle BlowerPolicy will be reported to the Audit Committee.

Employees' Stock Option Plan 2008 (ESOP)

Disclosures as per the Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines 1999 and disclosure pursuant tothe Rule 12(9) of Companies (Share Capital and Debenture) Rules 2014 are provided as AnnexureE to the Board's Report.

Internal Control System

The Company has an adequate system of internal control commensurate with its size andnature of business. These systems provide a reasonable assurance in respect of providingfinancial and operational information complying with applicable statutes safeguarding ofassets of the Company and ensuring compliance with corporate policies.

The Company's Board and Audit Committee review adherence to internal control systemsinternal audit reports and legal compliances. The Audit Committee reviews all quarterlyand yearly financial results of the Company and recommends the same to Board for itsapproval.

Independent Directors

The Independent Directors of the Company have furnished necessary declarations to theCompany under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence as prescribed for independent directors under Section 149(6) ofthe Act and Regulation 16(b) of the SEBI Listing Regulations.

During the year under review a meeting of Independent Directors was held on 27thFebruary 2018.

Related Party Transactions

All related party transactions that were entered into during the year were at arm'slength basis and in the ordinary course of business. The Audit Committee has approved therelated party transactions and subsequently the same were approved by the Board ofDirectors. The disclosures on the Related Party Transactions in Form AOC-2 is provided as AnnexureF to the Board's Report.

Auditors

Pursuant to the provisions of Section 139 of the Act and the Rules framed thereafterM/s. Rahul Gautam Divan and

Associates Chartered Accountants were appointed as statutory auditors of the Companyfrom the conclusion of the twenty first annual general meeting (AGM) of the Company heldon 11th September 2015 till the conclusion of the twenty fifth AGM to be heldin the year 2019 subject to ratification of their appointment at every AGM. The Companyhas received eligibility certificate in terms of Section 139 of the Companies Act 2013and consent from the auditors.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under the Company has appointed Mr. M. P. Sharma a Company Secretary in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is attachedas part of this Report as Annexure G. The Report does not contain anyqualifications reservations or adverse remarks.

Energy Conservation and Technology Absorption

The company ensures optimized and efficient consumption of energy in all theoffices/branches of the Company. With the implementation of its digital initiatives thecompany has also substantially reduced its paper consumption.

The Company has been at the forefront of using technology absorption and has alwaysleveraged technological innovations to improve our operational efficiency and satisfy andretain our customer base.

Foreign Exchange Earnings and Outgo

Earnings - Nil Outgo - Rs. 2.35 lakhs

Particulars of Employees and related disclosure

There are no employees drawing a monthly or yearly remuneration in excess of the limitsspecified under Section 197 of the Companies Act 2013 read with Rules 5(2)and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 including anyamendments thereof.

The information containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014as amended from time to time is attachedherewith as Annexure H.

General

Your Directors state that no disclosure or reporting is required

in respect of the following items as there were no transactions

on these items during the year under review:

a. Issue of equity shares with differential right as to dividend voting or otherwise.

b. Issue of shares (including sweat equity shares) to employees of the company underany scheme save and except ESOS referred to in this report.

c. Maintenance of cost records not applicable to the Company.

d. Provisions related to Corporate Social Responsibility is not applicable to theCompany.

e. No significant or material orders were passed by the regulators or Courts ortribunals which impact the going concern status and Company's operation in future.

Acknowledgments

Your Directors acknowledge the support and counsel extended by the bankers governmentagencies shareholders investors employees and others associated with the Company. TheDirectors look forward the same in future also.

For and on behalf of the Board of Directors

Kumar Nair Chairman (DIN 00320541)

Place: Mumbai

Date: 14 August 2018