DIRECTORS REPORT To: The Members of Pro Fin Capital Services Limited Your Directors have pleasure in presenting their 24th Annual Report and the audited financial statements for the financial year ended 31st March 2015 Stand alone The income during the financial year ended 31st March 2015 is Rs. 145.65 lacs compared to Rs. 42.37 lacs in the previous year- an increase of about 244%. The profit after tax for the financial year ended 31st March 2015 is Rs. 24.46 lacs compared to Rs. 2.53 lacs - an increase of 866% over the previous year 2 Dividend and Reserves The Board of Directors do not recommend any dividend for the financial year ended 31st March 2015 in view of carried forward losses 3 Share Capital The paid up equity share capital of the Company as at 31st March 2015 stood at Rs 546.69 lacs. During the year under review, the Company has not issued shares with differential voting rights nor has it granted any stock options or sweat equity. None of the directors of the Company hold instruments convertible into equity shares during the financial year ended 31st March 2015. 4 Issue of warrants on preferential basis Pursuant to approval by the members of the Company at the extra ordinary general meeting held on 7th April 2014, the Board of Directors of the Company allotted on 21st April 2014, 20,00,000 warrants which are, at the option of the holders, convertible into equity shares at the price of Rs. 113.30 (Rs. 10 face value +premium of Rs. 103.30) per share. These warrants were allotted to persons who are not part of "promoters" or "promoter group". The Company received 25% of the price of the shares upfront. These warrants are convertible into equity shares within a period of 18 months from the date of allotment, ie. 21st April 2014. 5 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 2015. 6 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 operaitons and profitability of the Company. The Board of Directors is well aware of these risks and through the operational management, continues to monitor them and guides in taking prompt action to mitigate the risks. 7 Corporate Social Responsibility Section 135 of the Companies At 2013 and the rules made there under relating to corporate social responsibility are not applicable to the Company during the financial year ended 31st March 2015. 8 Subsidiaries Tera Natural Resources And Pellets Private Limited has become the subsidiary of the Company during the financial year2014-15. Necessary details are given in the Report at appropriate places. 9 Corporate Governance As per SEBI circular CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014, clause 49 of the listing agreement relating to corporate governance is not applicable to the Company. 10 Listing of shares in BSE During the financial year under report, the equity shares issued by the Company continue to be listed at BSE. 11 Extract of Annual Return The extract of annual return in form MGT 9, as required under section 92 of the Companies Act 2013, as at 31st March 2015, is annexed to this report as Annexure A which forms part of this report 13 Board of Directors Appointment During the year, the Board had appointed, on the recommendation of the Remuneration and Nomination Committee, Smt. Neha Gupta, as the additional director from 31st March 2015. As additional director, she holds office till the ensuring annual general meeting. The Company has received notice of her appointment with requisite deposits from a member. Independent Directors All Independent directors have given declaration that they meet the criteria of independence as stipulated under section 149(6) of the Companies Act 2013. As per provisions of Section 152 of the Companies Act 2013 and in accordance with the provisions of the Articles of Association of the Company, Shri Abhay Gupta retires by rotation and being eligible offers himself for re appointment. 14 Number of meetings of the Board During the year under report, the board met 6 times on 21st April 2014, 30th May 2014, 13th August 2014, 10th November 2014, 8th January 2015 and 31th March 2015. 15 Board Evaluation The performance evaluation of the independent directors was completed. The performance evaluation of the Chairman and non-independent directors was carried out by the independent directors and was accepted by the Board. 16 Particulars of loans, guarantees or investments by the Company During the year, the Company has not given any loan or issued any guarantee in connection with the loan. The Company has, during the year under report, acquired 128150 equity shares (46.92%) in Tera Natural Resources And Pellets Private Limited (Tera). Tera has become subsidiary of the Company in terms of section 2(87)(i) of the Companies Act 2013. Tera has obtained requisite approvals and permits for carrying out mining activities in Kolahapur District, Maharashtra. . 17 Whistle Blower policy The Company has in place a mechanism to report genuine concerns or grievances. 18 Remuneration and Nomination policy The Board of directors has adopted a policy framework for selection, appointment and remuneration of directors, key managerial personnel and senior management of the Company. 19 Related party transactions All transactions entered with related parties for the financial year ended 31st March 2015 were on arm's length basis and in the ordinary course of business. Hence provisions of Section 188 of the Companies Act 2013 are not attracted and disclosure in form AOC 2 is not required. All related party transactions are placed before the Audit Committee and the Board of Directors for approval. 20 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. 21 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) of the Companies Act 2013: (i) That in preparation of the annual accounts for the year ended 31st March 2015 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 2015 and of the profit 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 22 Statutory auditors M/s. Mahesh Tejwani, Chartered Accountants, who are statutory auditors of the Company hold office upto 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. 22 Cost Audit The provisions of the Companies (Cost Records and Audit) Rules 2014 are not applicable to the Company's operations. 23 Secretarial Audit Report As required under section 204 of the Companies Act 2013, the Secretarial Audit Report from Mr L Krishnamoorthy Practising Company Secretary (CP No 6885 ) is annexed to this report as Annexure B which forms part of this report. With reference to the observations in the report regarding appointment of whole time company secretary, it is clarified that the Company is taking steps to appoint suitable company secretary commensurate with its operations and compliance requirements. 24 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. 25 Environment and Safety The Company's operations do not pose any environment hazards. 26 Statutory Information (A) Conservation of energy: Not applicable (B) Technology Absorption: Not applicable (C) Foreign exchange earnings and expenses: Not applicable 27 Acknowledgment The Directors wish to place on record their appreciation of the contribution 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 2015. The Directors also to wish to thank the Company's customers and banks for their continued support and faith reposed in the Company. For and on behalf of the Board Anupam Gupta Managing Director Place : Mumbai Dated 29th May 2015 |