DIRECTORS' REPORT To, The Shareholders, PMC FINCORP LIMITED Your Directors have pleasure in submitting their 30th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015. FINANCIAL SUMMARY/HIGHLIGHTS Your Company achieved an all time high performance both in turnover & its profits. Income from operation and profit before tax aggregated to Rs. 29.00 Crores and Rs. 4.86 Crores, respectively as compared to Income Rs. 10.05 Crores and Profit Rs. 1.88 Crores during the previous year. DIVIDEND To build up the reserve funds, Your directors have not recommended any dividend on equity shares during the year under consideration. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND The provisions of Section 125(2) of the Companies Act, 2013 do not apply and no amount is due for transfer to invester protection fund. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS AND DISCLOSURE REGARDING CHANGE IN THE NATURE OF BUSINESS, IF ANY Your Directors wish to present the details of Business operations done during the year under review: a. Corporate and Personal Finance; b. Debt Syndication; c. Private Placement, Arranger; d. Distribution & Marketing of financial Products; e. Dealing & Investment in Stock Market; During the year under review, there is no change in the Business Activities or Nature of Business of the Company. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTINGTHE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE ANDTHE DATE OFTHE REPORT ISSUE OF BONUS SHARESTHROUGH POSTAL BALLOT The Company has proposed to Issue Bonus shares by capitalizing its free reserves. The same was duly approved by members of the Company on 13th August, 2015 through postal ballot. Accordingly, Company is in a process to issue 243,280,600 (Twenty Four CroresThirtyTwo Lakhs EightyThousand Six Hundred) Bonus Shares of Rs. 1/- each to those shareholders who holds shares in physical/demat mode as on the Record Date. CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The provisions of Section 134(m) of the Companies Act, 2013 do not apply to our Company. There was no foreign exchange inflow or Outflow during the year under review. RISK MANAGEMENT FRAMEWORK The Company has a robust internal business management framework to identify, evaluate business risks and opportunities which seeks to minimize adverse impact on the business objectives and enhance the Company's business prospects. As an NBFC, PMC is exposed to credit risk, liquidity risk and Interest rate risk. Risk Management is an Integral part of the Company's business strategy. LISTING INFORMATION The Company's Share are Listed with BSE Limited, Mumbai. Your Company has paid the Annual Listing Fee up to date and there are no arrears. The BSE have nation-wide trading terminals and therefore provide full liquidity to the investors. NBFC REGISTRATION The company has been registered with Reserve Bank of India as Non Banking Finance Company vide Registration No. 12.00128 Dated 1st April 1998. Your Company is categorized as a Non-deposit taking Non-Banking Financial Company. The Company has not accepted any deposit from the public during the year pursuant to the provisions of Companies Act, 2013. DEMATERILISATION OF SHARES Your Company has connectivity with NSDL & CDSL for dematerlisation of its equity shares. The ISIN no. INE793G01035 has been allotted for the company. Therefore, the member and/or investors may keep their shareholding in the electronic mode with their Depository Participates. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employee's particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT,2013 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWITH RELATED PARTIES There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. STATUTORY AUDITORS M/s. M.M. Goyal & Co., the Statutory Auditors (FRN: 007198N) retire at the ensuing Annual General Meeting but being eligible offer themselves for re-appointment. The Company has received the letter from the auditors to the effect that their appointment if made it would be within the prescribed limits under Section 141(3)g of the Companies Act, 2013. Your Directors recommend reappointment of M/s M.M. Goyal & Co. as the Statutory Auditors of the Company. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company has appointed M/s Ashu Gupta & Co., Company Secretaries as Secretarial Auditors of the Company, to undertake the secretarial audit of the Company for the FY 2014-15. The Secretarial Audit report MR-3 submitted by Company Secretary in Practice is enclosed as part of this report Annexure - A. INTERNAL AUDITORS During the year under review M/s. Krishan K Aggarwal & Associates, Chartered Accountants(FRN: 019471N) have been appointed to act as Internal Auditors of the Company and their reports reviewed by the Audit Committee time to time. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS There were no qualifications, reservations or adverse remarks made by the Auditors in their respective reports. As required under section 204(1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company is in process of filling these forms and would ensure in future that all the provisions are complied to the fullest extent. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 28th September, 2014 formulated and/or reconstituted the Nomination and Remuneration Committee and Policy of your Company on the recommendations of Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policies relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. NUMBER OF BOARD MEETINGS CONDUCTED DURING THEYEAR UNDER REVIEW The Board of Directors duly met 13 times during the financial year from 1st April, 2014 to 31st March, 2015. BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board who were evaluated on parameters such as level of engagement and contribution and independence of judgment thereby safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. The performance evaluation of the Chairman and the non-Independent Directors was carried out by the Independent Directors. The Board also carried out annual performance evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committees. The Directors expressed their satisfaction with evaluation process. All the non-executive and Independent Directors are eminent personalities having wide experience in the field of business, industry & administration. Their presence on the Board is advantageous and fruitful in taking business decisions. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operation in future. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of 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. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. KEY MANAGERIAL PERSONNEL AND BOARD OF DIRECTORS Mr. Raman Kumar, Company Secretary has resigned from the post of Company Secretary of the Company with effect from 01.02.2015. The Board places on record its appreciation for the assistance & guidance provided by Mr. Raman Kumar during his tenure as Company Secretary of the Company. Ms. Nidhi Pathak, Company Secretary has been appointed as company Secretary of the Company with effect from 01.02.2015. The Companies Act, 2013, provides for the appointment of Independent Directors. Sub -section (10) of Section 149 of the Companies Act, 2013 provides that Independent Directors shall hold office for a term of up to five consecutive years on the Board of a company and shall be eligible for re-appointment on passing special resolution by shareholders of the Company. Accordingly, Mr. V.B. Aggarwal & Mr. Pramod Gupta, whose term of office expired on 29th April, 2015 as Independent Directors were re-appointed as Independent Directors at their duly convened Board Meeting held on 28th April, 2015 for a further period of five years up to 29.04.2020 subject to the approval of members in the ensuing Annual General Meeting as required under section 149(10). Mrs. Rekha Modi, retire at this Annual General Meeting and being eligible offer herself for re-appointment. Mr. Vijay Kumar Yadav, Appointed as whole time KMP -Chief Finance Officer of the Company with effect from 15.06.2015. DECLARATION OF INDEPENDENT DIRECTORS The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. CORPORATE GOVERNANCE REPORT As required by clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion & Analysis and Auditor's Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure 2 and is attached to this Report. COMPLIANCE WITH RBI GUIDELINES Your Company has complied with all the regulations of Reserve Bank of India as on 31st March, 2015; applicable to it as Non-Banking Finance Company. COMPLIANCE WITH THE CODE OF CONDUCT A declaration by the Managing Director affirming compliance with the company's Code of Conduct by Directors and senior Management for FY 2014-15, as required under Clause 49 of the Listing Agreement with Stock Exchange is annexed and forms part of this Report. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM The Board of Directors at their meeting held on 28th September, 2014 reconstituted the Audit Committee of the Board. The Audit Committee consists of the following members:- a. Mr. V. B. Aggarwal, b. Mr. Pramod Gupta, and c. Mrs. Rekha Modi The above composition of the Audit Committee consists of two independent Directors viz., Mr. V. B. Aggarwal and Mr. Pramod Gupta, who form the majority. The Company has established or adopted a Vigil Mechanism Policy pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company. 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 No Bonus Shares were issued during the year under review. d. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. ACKNOWLEDGEMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors acknowledges gratefully the shareholders for their support and confidence reposed on your Company. And your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS (RAJ KUMAR MODI) Managing Director DIN- 01274171 S-353 IIND FLOOR, GREATER KAILASH-I, NEW DELHI, 110048 Place : New Delhi Date : 25.08.2015 |