DIRECTOR'S REPORT
To:
The Members of Pro Fin Capital Services Limited
The Directors have pleasure in presenting their 25th Annual Report and the audited financial statements for the financial year ended 31st March 2016
1 Financial Result
The summarized financial results for the financial year ended 31st March 2016 are presented below:
Rs. In Lakhs
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Details
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Financial year ended 31st
March 2016 (stand alone)
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Financial year ended 31st
March 2015 (stand alone)
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Income
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609.11
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175.15
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Profit before interest, depreciation and taxation
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58.99
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35.74
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Finance cost
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3.99
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0.37
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Depreciation
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8.39
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3.99
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Profit before tax
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46.62
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30.38
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Taxation
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8.00
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5.92
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Profit after tax
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38.62
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24.46
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Minority Interest
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—
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—
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Transfer& Appropriations
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35.54
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—
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Balance brought forward previous year (loss)
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(239.58)
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(264.03)
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Disposable surplus available after adjustments
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3.08
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24.45
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Pref Share Warrants Deferred
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113.30
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—
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Balance carried to balance sheet (loss)
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(123.20)
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(239.58)
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1. Performance Evaluation
The Income during the financial year ended 31st March 2016 is Rs. 609.11 compared to Rs. 175.15 in the previous year an increase of about 248%. The profit after tax for the financial year ended 31st March 2016 is Rs. 38.62 compared to Rs. 24.46 - an increase of 57.89% over the previous year.
2. Dividend and Reserves
The Board of Directors does not recommend any dividend for the financial year ended 31st March 2016.
3. Share Capital
The paid up equity share capital of the Company as at 31st March 2016 stood at Rs. 7, 06, 69,000. During the year under report the Company issued and allotted 16, 00,000 equity shares of Rs. 101- each at a premium of Rs. 103.30 per share to those warrant holders who opted to convert the warrants in to equity shares and paid the balance amount. The amount of Rs. 1, 13,30,000/- was forfeited as one of the warrant holders did not exercise the option to convert the warrants in to equity shares.
4. Finance & Accounts
The Company prepares its financial statements in accordance with the requirements of the Companies Act 2013 and the Generally Accepted Accounting Principles (GAPP) as applicable in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the company's state of affairs, profits and cash flows for the financial year ended 31st March 2016
5. Business Risks
Like any other company in the financial services sector, the company is exposed to business risks which can be internal and external. Growth rates in GDP of Indian and global economy, volatility in the exchange rate of rupee vis-a-vis other principal currencies, increase in inflation, movement in interest rates all these cause volatility in the price movements at the Stock Exchanges, impacting the operations and profitability of the Company. The Board of Directors is well aware of these risks and through operational management, continues to monitor them and guides in taking prompt action to mitigate the risks.
6. Subsidiaries
The company has a subsidiary Tera Natural Resources and Pellets Private Limited. Necessary details in form AOC-1 are annexed to this report. As per the Circular No. 51/12/2007-CL-lll dated 8th February, 2011 issued by Government of India, Ministry of Corporate Affairs, the required financial information in the consolidated balance sheet is given in respect the subsidiary in Form AOC-1 annexed in Annual Report. The annual accounts of the subsidiary and the related detailed information shall be made available to the shareholders of the Company, seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept open for inspection by any shareholder at the Registered Office at 503, Western Edge II, Western Express Highway, Borivali (E), and Mumbai-400 066.
The Company has taken a loan from its Subsidiary Tera Natural Resources & Pellets Pvt. Ltd. of Rs. 72651700.
7. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and provisions of Regulations of the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Stakeholder Relationship and Nomination & Remuneration Committees. 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, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. 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 Independent Directors. The Directors expressed their satisfaction with the evaluation process
8. Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.
9. Meetings of Board of Directors
The Meetings of the Board of Directors are scheduled well in advance and generally held at the Registered Office of the Company at Borivali. The notice confirming the meeting and the detailed agenda is sent well in advance to all the Directors.
During the year under report, the Board met 6 times on 20th April 2015,29th May 2015,4th August 2015,12th August 2015,9th November2015and 12th February 2016.
10. Listing of shares on BSE
During the financial year under report, the equity shares issued by the company continue to be listed on BSE.
11. Extract of Annual Return
The extract of Annual Return in Form MGT 9, as required in section 92 of the Companies Act, 2013, as at 31st March 2016, is annexed to this report as Annexure C which forms part of this report.
12. Vigil Mechanism/Whistle Blower Policy
The Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has established a vigil mechanism to be known as the 'Whistle Blower Policy' for its Directors and employees to report instances of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.
Accordingly, 'Whistle Blower Policy' has been formulated with a view to provide a mechanism for the Directors and employees of the Company to approach Chairman of the Audit Committee of the Company. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise concerns about serious irregularities within the Company.
13. Prevention of Insider Trading
The Company has adopted a Code of Conduct for prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires preclearance for dealing in the Company's shares and prohibits the purchase or sale of Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with the Code.
14. Particulars of loans, guarantees or investments by the Company
Details of loans, guarantees and investments are given in the notes to the financial statements
15. Significant and material orders passed by the Regulators or Courts
There are no significant and material orders passed by the regulators or courts against the Company during the year.
16. Directors responsibility statement
To the best of knowledge and belief and according to the information and explanation obtained by them, your directors make the following statement in terms of section 134 (3) (c) read with section 134(5) of the Companies Act, 2013 in preparation of the Annual Accounts for the year ended on March 31,2016 and state that:
(i) That in preparation of annual accounts for the year ended 31st March 2016 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) 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 as at 31st March 2016 and of the loss of the Company for the year ended on that date;
(iii) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) That the annual accounts have been prepared on a going concern basis
(v) That the directors have devised proper systems to ensure compliance with the provisions of all applicable law and that such systems were adequate and operating effectively
17. Statutory auditors
M/s. Mahesh Tejwani, Chartered Accountants who are statutory auditors of the Company hold office up to the forthcoming annual general meeting. If appointed, under section 139 of the Companies Act 2013, they shall hold office from the conclusion of the ensuing annual general meeting till the conclusion of the annual general meeting relating to the financial year ending 31st March 2017. The Company has obtained written confirmation from the auditors that their appointment, if made would be in conformity with the limits specified in the said section. The members are requested to ratify their appointment.
18. Cost Audit
The provisions of the Companies (Cost Records and Audit) Rules 2014 are not applicable to the company's operations.
19. Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the Company has appointed Mr. L. Krishnamoorthy, Practicing Company Secretary, to undertake the Secretarial Audit of the Company for the financial year 2015-2016. The Secretarial Audit Report for the financial year 2015-16 has been annexed to this Report.
20. Internal control system and their adequacy
The Company has an effective internal control system commensurate with its size and scale of its operations. The Audit Committee reviews the adequacy and effectiveness of the internal control systems and suggests improvements, wherever required.
21. Environment and safety
The Company's operations do not pose any environmental hazards.
22. Statutory Information
(A) Conservation of energy: Notapplicable
(B) Technology Absorption: Notapplicable
(C) Foreign exchange earnings and expenses: Notapplicable
23. Acknowledgement
The Directors wish to place on record their appreciation of the contributions made by the employees at all levels but for whose efforts; the Company could not have achieved the remarkable financial results for the financial year ended 31st March 2016
The Directors also wish to thank the Company's customers and banks for their continued support and faith reposed in the Company.
For and on behalf of Board of Directors
Place: Mumbai (Anupam N. Gupta)
Date: 30/05/2016 Managing Director
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