Your Directors have pleasure in presenting the 25th Annual Report of the Company alongwith the audited financial statements for the year ended 31st March 2019.
The table below gives the standalone financial highlights of the Company for the yearended 31st March 2019 as compared to the previous year.
| || ||( Rs in Lakhs) |
|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Total Income ||1084.68 ||962.49 |
|Total Expenditure ||996.00 ||900.92 |
|Profit/(Loss) from Operations before Other Income Finance Cost & Exceptional Items ||88.68 ||61.57 |
|Finance Costs ||72.75 ||26.60 |
|Profit / (Loss) from Ordinary Activities after Finance Cost but before Exceptional Items ||15.93 ||34.97 |
|Exceptional Items: || || |
|Goodwill written Off (as per the Scheme of Amalgamation) ||- ||22.24 |
|Profit / (Loss) from Ordinary Activities before Tax ||15.93 ||12.73 |
|Current Tax ||9.30 ||20.49 |
|MAT Entitlement Credit ||- ||(16.68) |
|Deferred Tax ||(6.02) ||0.80 |
|Net Profit / (Loss) for the period ||12.65 ||8.12 |
|Appropriations: || || |
|Reserves u/s.45 IC of RBI Act ||2.53 ||1.62 |
During the year ended 31st March 2019 your Company earned revenue of Rs1084.68 Lakhsas compared to Rs962.49 Lakhs in the previous year. The operations have recorded a profitof Rs.12.65 Lakhs as compared to a profit of Rs8.12 Lakhs in the previous year. During theyear ended 31st March 2019 your Company earned consolidated revenue of Rs1868.66 Lakhsas compared to Rs.1782.29 Lakhs in the previous year. The consolidated operations haverecorded a profit of Rs.45.37 Lakhs as compared to a profit of Rs82.46 Lakhs in theprevious year.
Detailed information on operational and financial performance. of the Company for thefinancial year is given in the Management Discussion and Analysis which is set outseparately with the Directors' Report.
Due to inadequacy of profits and in order to consolidate the financial position of theCompany your Directors have not recommended any dividend for the year.
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.
The issued subscribed and paid-up Equity Share Capital as on 31st March 2019 was Rs.24.46 Crores comprising of 24460568 Equity Shares of the face value of Rs. 10 eachfully paid-up.
There is no change in the Authorised Issued Subscribed and Paid Up Share Capital ofthe Company during the year.
Vertex Securities Limited (VSL) Vertex Commodities And Finpro Private Limited (VCFPL)and Transwarranty Capital Market Services Private Limited (TCMSPL) are the subsidiaries ofthe Company.
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 through Vertex Commodities And Finpro Private Limited(VCFPL) 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 Merchant Banker
5. Association of Mutual Funds of India(AMFI) registered Mutual Fund Advisor.
Vertex Commodities And Finpro Private Limited (VCFPL)is a member of following commodityexchanges : -
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 2019 the subsidiary company Vertex SecuritiesLimited earned revenue of Rs686.33 lakhs as compared to Rs765.02 lakhs in the previousyear. The operations have recorded a profit of Rs.18.08 lakhs as compared to aprofit of Rs77.32 lakhs in the previous year. The subsidiary company Vertex CommoditiesAnd Finpro Private Limited had total revenue of Rs109.09 lakhs and a profit of Rs14.78lakhs for the year ended 31st March 2019 as against the total revenue of Rs110.73 lakhsand loss of Rs2.74 lakhs respectively in the previous year.
The subsidiary company Transwarranty Capital Market Services Pvt. Ltd recorded a lossof Rs0.14 lakh for the year ended 31st March 2019 as against a loss Rs0.25 lakh in theprevious year.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements (including the consolidated financial statements and related information ofthe Company and audited accounts of its subsidiaries) are available on our websitewww.transwarranty.com. These documents will also be available for inspection duringbusiness hours at our registered office.
The Consolidated Financial Statements presented by the Company include the financialresults of its subsidiary companies.
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.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
I. Re-appointment of independent directors
The Board at its meeting held on 29th August 2019 considering the report ofperformance evaluation and based on the recommendation of Nomination and
Remuneration Committee re-appointed the following independent directors for a secondterm as given below:
|Sr. No. Name of independent director ||Tenure of second term |
|1. Mr. Pravin Khatau ||Five years w.e.f. 25th February 2020 |
|2. Mrs. Nirmala Sachin Parab ||Five years w.e.f. 30th March 2020 |
Accordingly resolutions seeking approval of the members for the aforementionedre-appointments forms part of notice convening the 25th AGM.
Necessary details regarding their re-appointment as required under the Act and theListing Regulations are given in the notice of AGM.
II. Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. U. RamachandranDirector & CFO of the Company (DIN 00493707) retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment and yourBoard has recommended his re-appointment.
Pursuant to Regulation 36(3) of the SEBI (Listing Obligations & DisclosureRequirements) 2015 ["Listing Regulations"] brief resume of the Directorsproposed for appointment/re-appointment has been given in the statement annexed to theNotice convening the Annual General Meeting.
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
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.
There are no qualifications in the Auditor's Report for standalone accounts for thefinancial year ended 31st March 2019. Referring to observations given under "Basisfor Qualified Opinion" in the Independent Auditor's Report for Consolidated Accountsit is clarified that as the Company has initiated legal actions for the recovery of thedues and it will not be prudent to make any provisions as the cases are in various stagesin 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 (5) of the Companies Act 2013 your Directors state that:
1. In preparation of annual accounts for the year ended 31stMarch 2019 the applicableaccounting standards have been followed along with proper explanations relating tomaterial 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 2019 and profit of the Companyfor 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.
During the financial year under report the Company has not
accepted deposits within the meaning of Section 73 of the
Companies Act 2013 read with the Companies (Acceptance
of Deposits) Rules 2014.
Harmonisation of different categories of NBFCs
RBI vide its circular dated 22 February 2019 harmonised different categories of NBFCsinto fewer ones on the basis of the principle of regulation by activity rather thanregulation by entity in order to provide greater operational flexibility.
Accordingly the three categories of NBFCs viz. Asset Finance Companies LoanCompanies and Investment Companies have been merged into a new category called NBFC -Investment and Credit Company.
The Company now is categorised as NBFC- Investment and Credit Company.
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.
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 functions 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. Further the Managing Director also has one toone discussion with the newly appointed Director to familiarize with him/her the Company'soperation.
The Board of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors and various Committees of theBoard. The details of the Company's familiarization programme for Independent Directorscan be accessed at (http://www. transwarranty.com/Investors).
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 quality of contribution to Board discussions and decisions disclosure ofinterest strategic insights or inputs regarding future growth of the Company and itsperformance ability to challenge views in a constructive manner knowledge acquired withregard to the Company's business/ activities leadership skills marketing and corporatecommunications 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 directorsperformance of non-independent directors performance of the board as a whole 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. Performance evaluation of independent directorswas done by the entire board excluding the independent directors being evaluated.
The Board of Directors of the Company has constituted various Committees in compliancewith the provisions of the Companies Act 2013 and SEBI Listing Regulations such as AuditCommittee Nomination Remuneration and Compensation Committee and Stakeholders'Relationship Committee.
All decisions pertaining to the constitution of the Committees appointment of membersand fixing of terms of reference/role of the Committees are taken by the Board ofDirectors.
Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Report which forms a part of the Annual Report.
The details regarding the meetings 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 as provided under Section 92(3) of the Companies Act 2013in the prescribed form in Form MGT-9 is annexed to this report as Annexure D and isalso hosted on the Company's website www.transwarranty.com/ investor relations.
The Company has Risk Management Systems in place including identification of elementsof risk if any which in the opinion of the Board may threaten the existence of theCompany. After identifying the risk and assessing the level of impact controls are put inplace to mitigate the risk by the concerned executives/the Board to control the exposureof the risk and balance the impact of risk on a continuous basis.
Nomination & Remuneration Policy
The Board on the recommendation of Nomination Remuneration and CompensationCommittee has adopted a policy for selection appointment and remuneration of DirectorsKey Managerial Personnel and Senior Management. The said policy is available on ourwebsite at www.transwarranty.com. The details of this Policy are provided in the CorporateGovernance Report.
Sexual Harassment Policy
The Company has constituted an Internal Complaints Committee as per Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
In line with the requirements of Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has in place a policy to prevent sexualharassment of women at workplace. Your Directors state that during the year under reviewthere 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 2008)
Disclosures as per the Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 and disclosure pursuant to the Rule 12(9) of Companies (ShareCapital and Debenture) Rules 2014 are provided as Annexure E to the Board'sReport.
Internal control system
The Company has put in place an adequate system of internal controls commensurate withits size and nature of business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies.
The Company's Board & Audit Committee reviews adherence to internal controlsystems internal audit reports and legal compliances. The Audit Committee reviews allquarterly and yearly financial results of the Company and recommends the same to Board forits approval.
Declaration by 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 8thFebruary 2019.
Related Party Transactions
All related party transactions that were entered into during the year were on 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.
The Company's Auditors M/s. Rahul Gautam Divan and Associates Chartered Accountantswho were appointed as statutory auditors of the Company at the 21st AGM of the Companyheld on 11th September 2015 for a period of four years will complete their present termon conclusion of the ensuing 25th AGM of the Company.
The Board on the recommendation of the Audit Committee recommended for the approvalof the Members the appointment of S.S. Khan & Co. Chartered Accountants as theAuditors of the Company for a period of five years from the conclusion of the ensuing 25thAGM till the conclusion of the 30th AGM. On the recommendation of the Audit Committee theBoard also recommended for the approval of the Members the remuneration of Rs210000/-(Rupees Two Lakhs and Ten Thousand only) to conduct statutory audit including LimitedReviews for the financial year 2019-20. Appropriate resolution seeking your approval tothe appointment and remuneration of S.S. Khan & Co. as the Statutory Auditors isappearing in the Notice convening the 25th AGM of the Company.
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 annexed tothis Report as Annexure G. The said report contains one observation regardingmaterial related party transactions. Due to urgent circumstances the company entered intomaterial related party transactions. The resolution for ratification of previoustransactions/ approval of the shareholders is placed at this Annual General Meeting.
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
Maintenance Of Cost Records
The provision of section 148 of the Act are not applicable to the Company. Accordinglythere is no requirement of maintenance of cost records as specified under section 148(1)of the Act.
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 underSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time is attached herewith as Annexure H.
Orders Impacting Going Concern Significant
No significant or material orders were passed by the regulators or Courts or tribunalswhich impact the going concern status and Company's operations in future.
Secretarial standards of ICSI
The Company has complied with the requirements prescribed under the SecretarialStandards on Meetings of the Board of Directors (SS1) and General Meetings(SS2).
Your Directors state that no disclosure or reporting is required in respect of thefollowing 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. Provisions related to Corporate Social Responsibility are not applicable to theCompany
d. Pursuant to the provisions of the Act no fraud was reported by auditors of theCompany during FY 2019.
Your Directors acknowledge the support and counsel extended by the bankers governmentagencies debenture trustees shareholders investors employees and others associatedwith the Company. The Directors look forward the same in future also.
| ||For and on behalf of the Board of Directors |
| ||Kumar Nair |
|Place: Mumbai ||Chairman |
|Date: 29 August 2019 ||(DIN 00320541) |