DIRECTORS' REPORT TO THE MEMBERS OF THE COMPANY, Your Directors have pleasure in presenting the 33rd Annual Report on the business and operations of your Company with Audited Accounts for the year ended 31st March 2015. The financial results of the Company are summarized below: DIVIDEND: Your directors are pleased to recommend the dividend for the financial year 2014-15 on Equity Shares of Rs.10/- each at Rs. 0.20/- paise per equity share equivalent to 2% of the paid up capital of the Company aggregating to Rs. 21,70,260/-(Rupees Twenty One Lakhs Seventy thousand Two Hundred and Sixty Only) FINANCIAL HIGHLIGHTS: • Income from operations stood at Rs. 398.25 lacs for fiscal 2015 • Profit before taxes for fiscal 2015 is Rs. 264.58 lacs • Profit after taxes for fiscal 2015 is Rs. 207.24 lacs • Basic earning per share for fiscal 2015 is Rs. 1.91 per share DIRECTORS: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association, Mrs. Annu Agrawal, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment. All independent directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement. All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164 of the Companies Act, 2013. A brief resume and other details, as stipulated under the Listing Agreement for the above director seeking re-appointment is given as Additional Information on Directors which forms part of the Notice. Appointment of Key Managerial Personnel (KMPs) Chief Financial Officer (CFO) The Board of Directors of the Company at its meeting held on February 13, 2015, in terms of Section 203 of the Act had designated Ms. Nirmala Kanjar as the Chief Financial Officer of the Company Appointment of Company Secretary & Compliance officer The Board of Directors of the Company at its meeting held on February 13, 2015, in terms of Section 203 of the Act had appointed Ms. Kalpita Keluskar as Company Secretary & Compliance officer of the Company. Board Evaluation Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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. 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, Nomination and Remuneration as well as stakeholder relationship committee. The Directors expressed their satisfaction with the evaluation process. (i) Details of Board Meetings held During the year Seven Board Meetings and one independent directors' meeting were held. The Details of the meetings and attendance thereof have been given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. (ii) Constitution of Committees The Board has constituted an Audit Committee, Nomination & Remuneration Committee and a Stakeholder Relationship Committee, the details of which have been mentioned in the Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement clause (c) of subsection (3) of Section 134 of the Companies Act, 2013, your Directors confirm that: 1. That in the preparation of the annual accounts for the financial year ended 31st March, 2015 the applicable accounting standard had been followed along with proper explanation relating to material departures. 2. That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of loss of the Company for the year under review. 3. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. That the directors had prepared the accounts for the financial year ended 31st March, 2015 on a going concern basis. 5. That 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. 6. That 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 AUDITORS: (i) Statutory Auditor The retiring auditors, namely M/s. Bansal Bansal & Co., Chartered Accountants, Mumbai, hold office until the conclusion of the forthcoming Annual General Meeting and are seeking re-appointment. They have confirmed that their appointment if made, at the Annual General Meeting, will be within the limits prescribed under Companies Act, 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41(1)(h) of the Listing Agreement. Members are requested to consider their reappointment. (ii) Secretarial Auditor Pursuant to the provisions of the Section 204 of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 and as a measure of good corporate governance practice, the Board of Directors of the Company hereby appointed M/s. R M Mimani & Associates LLP, Practicing Company Secretaries as Secretarial Auditors of the Company for the Financial Year 2014-2015. The report of the Secretarial Auditors is enclosed as Annexure 4 to this report. iii) Internal Auditor M/S Pravin Chandak & Associates, Practicing Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time for 2014-15. COMMENTS ON AUDITOR'S REPORT: Statutory Auditor As regards exposure norms of RBI for a single borrower, the limit has exceeded in case of one of the Borrower. The said exposure is secured which is more than sufficient to cover the entire amount due from the borrower and the management is confident of realizing these dues. Secretarial Auditor: As regards exposure norms of RBI for a single borrower, the limit has exceeded in case of one of the Borrower. However, provisioning norms of RBI has been followed. Also the said exposure is secured which is more than sufficient to cover the entire amount due from the borrower and the management is confident of realizing these dues. The Company is in process of formulating the certain policies as required under the Companies Act, 2013 and listing agreement and will finalize the same as and when the policies are mandatorily applicable to the Company. As regard to Securities and Exchange Board of India (SEBI) interim order dated December 19, 2014 passed under section 11 and 11 B has barred the Company and one of its promoters group from accessing the Capital Market. The Company has filed its reply with the SEBI with regard to above said order. The Hearing took place and final order yet to be awaited COST AUDIT: The Company is not required to undertake the cost audit as required under Section 148 of the Companies Act, 2013. Whistle Blower Policy / vigil Mechanism The company has a vigil mechanism named 'Whistle Blower Policy' to deal with instances of fraud and mismanagement, if any. The Board has adopted a Whistle Blower Policy to promote reporting of any unethical or improper practice or violation of the company's Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the company. It gives a platform to the whistle blower to report any unethical or improper practice (not necessarily violation of law) and to define processes for receiving and investigating complaints. The Vigil Mechanism Policy has been uploaded on the website of the Company at <http://www.comfortfincap.com/whistle_blower_policy.php> RELATED PARTY TRANSACTIONS: All related party transactions that were entered during the financial year were at an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the company at large. All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the company's website at <http://www.comfortfincap.com/related_party_tran_policy>. php. Related party transactions under Accounting Standard - AS18 are disclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is furnished as Annexure 2 to this report. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT9 is annexed herewith as Annexure 3. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. CODE OF CONDUCT The Board has laid down a code of conduct for board members and senior management personnel of the Company. The code incorporates the duties of independent directors as laid down in the Companies Act, 2013. The said code of conduct is posted on Company's website www.comfortfincap.com The Board members and senior management personnel have affirmed compliance with the said code of conduct. PREVENTION OF INSIDER TRADING The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, senior management employees and other employees who have access to the unpublished 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 of conduct for prevention of insider trading. The Board at its meeting held on 30th May 2015 has adopted a revised Code of Prevention of Insider Trading based on the SEBI (Prohibition of Insider Trading) Regulations, 2015. The same has been placed on the website of the Company www. comfortfincap.com. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. BUSINESS RISK MANAGEMENT: The company has been addressing various risks impacting the company and the policy of the company on risk management is provided elsewhere in this annual report in Management Discussion and Analysis. FIXED DEPOSITS: During the year under review, the Company has not accepted any fixed deposits. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT: The Management Discussion and Analysis for the year 2014-15 and a detailed report on Corporate Governance, as required under Clause 49 of the Listing agreement executed with the Stock Exchanges, are given in separate sections forming part of the Annual Report. A Certificate from Statutory Auditors of the company, M/s. Bansal Bansal & Co., confirming compliance with the conditions of Corporate Governance stipulated in Clause 49 is annexed to the report on Corporate Governance. PARTICULARS OF EMPOLYEES: The provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable to the company, as there are no employees whose remuneration is in excess of the limits prescribed. LISTING: The Equity Shares of the Company are presently listed at BSE Ltd and Calcutta Stock Exchange Limited. The company is regular in payment of listing fee. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE: Information in accordance with the provisions Section 134 (3) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earning and outgo is given in the Annexure - 1. DISCLOSURE -SEXUAL HARASSMENT POLICY The company has in place, an Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. A Local Complaints Committee (LCC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year 2014-15: Number of complaints received - Nil Number of complaints disposed of - Nil SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS The Securities and Exchange Board of India had passed an Ex-parte ad- interim order under sections 11(1), 11(4) and 11b of the Securities and Exchange Board of India Act, 1992 in the matter of First Financial Services ltd on 19/12/2014. In the said order SEBI has restricted Company for accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions of SEBI. The Company has filed its reply with the SEBI with regard to above said order. The Hearing took place and final order yet to be awaited. Except above no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations. ACKNOWLEDGEMENT: Your directors place on record their gratitude for the continued co-operation and guidance extended by the Securities and Exchange Board of India, Reserve bank of India, BSE Limited, Calcutta Stock Exchange Limited and take this opportunity to place on record their warm appreciation of the valuable contribution, unstinted efforts and the spirit of dedication by the employees and officers at all levels in the progress of the Company during the year under review. Your directors also express their deep gratitude for the assistance, co-operation and support extended to your company by the bankers, customers as well as the investing community and look forward to their continued support. FOR AND ON BEHALF OF THE BOARD Sd/-Anil Agrawal Chairman & Promoter Director Place: Mumbai Dated:8th August, 2015 |