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Comfort Fincap Ltd Directors Report

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Jul 19, 2024|09:56:00 AM

Comfort Fincap Ltd Share Price directors Report

To the Members of the Company,

Your directors have pleasure in presenting the 41st (Forty First) Annual Report of Comfort Fincap Limited ("the Company") on the business and operations of your Company along with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2023.

1) financial highlights

The summary of Audited (Standalone and Consolidated) Financial performance of the Company, for the financial year ended March 31, 2023 is summarized as under:

(Rs. in lakh, except EPS)

PARTICULARS

STANDALONE

CONSO LIDATED
2022-2023 2021-2022 2022-2023 2021-2022
Revenue from Operations 1,466.10 1,242.43 1,466.10 1,242.43
Other operating Income 7.19 7.78 7.19 7.78
Total Revenue 1,473.28 1,250.21 1,473.28 1,250.21
Less: Total Expenditure 815.44 630.31 815.44 630.31
Profit before Tax 657.84 619.90 657.84 619.90
Les: Current Tax Expenses 168.75 146.51 168.75 146.51
Less: Deferred Tax 0.06 14.08 0.06 14.08
Less: Tax of earlier years 0.81 16.86 0.81 16.86
Profit for the year 488.23 442.44 488.22 442.40
Earnings Per Share (EPS) (Basic & Diluted)* 0.90 0.82 0.90 0.82

*Note: Subsequent to quarter ended March 31, 2023, the equity shares of the Company were sub-divided such that each equity share having face value of Rs.10/- (Rupees Ten only) fully paid-up, was sub-divided into five (5) equity shares having face value of Rs. 2/- (Rupees Two only) each, fully paid-up with effect from May 05, 2023 (Record Date). Therefore, the Earnings Per Share (EPS) for the financial year ended March 31, 2023 and all comparative periods presented above have been restated to give effect of the share split.

2) FINANCIAL PERFORMANCE AND STATE OF COMPANYS AFFAIRS:

Your Company is a Non-Banking Finance Company (NBFC) which is primarily focused in providing inter corporate loans, personal loans, loans against shares & securities, loans against properties, Mortgage Loans, Home Loans, trade financing, bills discounting and trading in shares and securities.

The consolidated and standalone financial statements of the Company for the year ended March 31, 2023 have been prepared in accordance with Indian Accounting Standards (IND-AS), the relevant provisions of

sections 129 and 133 of the Companies Act, 2013 (hereinafter referred to as "the Act"), Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), which have been reviewed by the Statutory Auditor of the Company.

During the year under review, your Companys total revenue from operations on consolidated basis increased to Rs. 1466.10lakh as compared to Rs. 1,242.30 lakh in the previous financial year. The net profit increased to Rs. 488.22 lakh as compared to Rs.442.40 lakh in the previous financial year.

During the year under review, your Companys total revenue from operations on standalone basis increased to Rs. 1466.10 lakh as compared to Rs. 1,242.43 lakh in the previous financial year. The net profit increased to Rs. 488.23 lakh as compared to Rs. 442.44 lakh in the previous financial year.

In accordance with the provisions contained in Section 136 of the Act and Regulation 34 of SEBI Listing Regulations, the Annual Report of the Company, containing Notice of the Annual General Meeting ("AGM"), Standalone and Consolidated Financial Statements, Standalone and Consolidated Cash Flow Statement, Report of the Auditors, Directors Report, Corporate Governance Report "together with Notes and Annexures" thereto are available on the website of the Company at http://www.comfortfincap.com/. Further, a detailed analysis of Companys performance is included in the Management Discussion and Analysis Report ("MDAR"), which forms part of this Annual Report.

3) DIVIDEND

Based on the Companys financial performance for the year 2022-23 and in order to conserve cash resources to face the future challenges, the Board of Directors have not recommended any dividend on equity shares for the year ended on March 31, 2023.

4) TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS AND CONCERNED SHARES TO INVESTOR EDUCATION AND PROTECTION FUND f‘IEPF")

Pursuant to the section 124 and other applicable provisions of the Act, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (including any statutory modification (s) and /or re-actment (s) there of for the time being in force),the Company will be transferring the unclaimed and unpaid dividend of the financial year 2015-16 from its Unpaid Dividend Account to Investor Education and Protection Fund (hereinafter referred to as "IEPF")after October 16, 2023. Further, all the shares in respect of which dividend remaining unpaid/unclaimed shall also be transferred to IEPF Authority.

Members who have not yet en-cashed their Final Dividend from financial year 2015-16 and thereafter are requested to make their claims to the Company/RTA. Members are requested to quote folio numbers/DPID-Client ID in all their correspondence.

5) SHARE CAPITAL

During the year under review, there has been no change in share capital of the Company. The issued, subscribed and paid-up Equity Share Capital of the Company as on March 31, 2023 was Rs. 10,85,13,000/- (Rupees Ten Core Eighty-Five Lakh Thirteen Thousand only) divided into 1,08,51,300 Equity Shares of Rs. 10/- each.

Further, during the financial year, your Board of Directors, at their meeting held on February 03, 2023,

approved subdivision/stock-split of existing One (1) equity share of the Company having face value of Rs. 10/- (Rupees Ten only) each into Five (5) equity shares of face value of Rs. 2/- (Rupees Two only) each, fully paid-up, ranking pari-passu in all aspects and without altering the aggregate amount of paid-up share capital.

Further, the shareholders vide resolution passed by way of postal ballot through e-voting on March 17, 2023 approved the said split of equity shares and the consequential alteration in the Capital Clause of Memorandum of Association of the Company. Subsequently, after sub-division of equity shares, the authorised share capital of the Company was altered as Rs. 15,00,00,000/- (Rupees Fifteen crore only) divided into 7,50,00,000/- equity shares of Rs. 02/- (Rupees Two only) each and issued, subscribed and paid- up share capital of the Company as Rs. 10,85,13,000/- (Rupees Ten crore eighty-five lakh and thirteen thousand only) divided into 5,42,56,500 equity shares of Rs. 02/- (Rupees Two only) each with effect from May 05, 2023 (Record Date).

Additionally, there was no public issue, rights issue, bonus issue or preferential issue, etc., during the year. The Company has not any issued any shares with differential voting rights or sweat equity shares, nor has it granted any stock options during the financial year.

6) TRANSFER TO RESERVES

The Board of Directors has decided to plough back the entire amount of profit in the business. Accordingly, the Company has not transferred any amount to the general reserves during the financial year ended March 31, 2023. The closing balance of the retained earnings of the Company for financial year 2022-23, after all appropriation and adjustments was Rs. 3,920.04 lakh.

7) LISTING WITH THE STOCK EXCHANGEfS)

Your Companys equity shares are listed on The BSE Limited and The Calcutta Stock Exchange Limited. Accordingly, the Annual listing fees for the financial year 2022-23 and 2023-24 has been paid to both the stock exchanges. Pursuant to sub-division/split of equity shares, the Company has been allotted new ISIN: INE274M01026 on May 05, 2023 (record date). Further, The Calcutta Stock Exchange Limited ("CSE") vide their letter dated August 23, 2022 bearing Ref. No. CSE/LD/15632/2022 have revoked the suspension for dealing in equity shares w.e.f. September 01, 2022. Further, the Board of Directors of the Company at its meeting held on October 20, 2022 inter alia considered and approved a proposal for voluntary delisting of equity shares of the Company from the CSE pursuant to Regulation 5 and 6 of Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 ("SEBI Delisting Regulations"). Since, there has been no trading in the equity shares of the Company at the CSE for last many years and the Company also incurs extra operational costs of being listed on the CSE, therefore, it was being proposed to delist the equity shares of the Company from CSE. The delisting from CSE will not be prejudicial to or affect the interest of the investors. The equity shares of the Company will continue to remain listed on BSE Limited. The delisting fees has been paid to CSE and the Notice for the proposed voluntary delisting of equity shares were published in newspapers dated November 18, 2022 in Financial Express, Jansatta and Duranta Barta. Furthermore, the Company has complied and carried out all procedure to give effect to the aforesaid action. However, approval for delisting is still pending from CSE.

8) SUBSIDIARIES. ASSOCIATES AND IOINT VENTURES

The Company has one Associate Company namely, Lemonade Shares & Securities Private Limited and has no other subsidiaries or joint venture within the meaning of Section 2 (87) or 2 (6) of the Act as on March 31, 2023. During the year, there has been no material change in the nature of the business of the Associate Company and no Company became or ceased to be subsidiary, associate company or joint venture.

Further, the report on the performance, financial position and overall contribution to companys profitability of the Associate and salient features of the financial statements in the prescribed Form AOC-1 is marked and annexed as "Annexure I" to this report.

9) DEPOSITS

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on public deposit under section 73 and 74 of the Act, read together with the Companies (Acceptance of Deposits) Rules, 2014 was outstanding as on the date of the balance sheet.

10) material changes affecting the company

There were no material changes and commitments affecting the financial position of the Company between end of the financial year and the date of this report. It is hereby confirmed that there has been no other change in the nature of business of the Company.

11) CORPORATE GOVERNANCE

The Company has consciously adhered to the best standards of governance long before they were legally mandated. The Company has devised proper systems to ensure compliance with all the applicable provisions and that such systems are adequate and operating effectively. Pursuant to Regulation 34(3) read with Schedule V (E) of the SEBI Listing Regulations, a separate section on Corporate Governance practices followed by the Company, together with a Certificate from Practicing Company Secretary confirming compliance, forms an integral part of this Annual Report.

Further a declaration with respect to the compliance with the Code of Conduct duly signed by the Chief Executive Officer of the Company also forms part of this Annual Report.

12) board of directors and key managerial personnel

I. Board of Directors

The Board of Directors is an apex body constituted by the shareholders for overseeing the Companys overall functioning. The Board provides strategic direction and leadership and oversees the management policies and their effectiveness looking at long-term interests of the shareholders and other stakeholders.

The Board of Directors of the Company consists of professionals from varied disciplines. The day-to-day

management of the affairs of the Company is entrusted with the senior management personnel.

The Composition of the Board of Directors is in conformity with section 149 of the Act read with regulation 17 of the SEBI Listing Regulations.

Following were the Directors as on March 31, 2023:

Sr. No. Name of Directors DIN Category
1 Mr.Ankur Agrawal 06408167 Executive Director, Chairperson
2 Mr. Devendra Lal Thakur 00392511 Non-Executive - Independent Director
3 Mr. Milin Ramani 07697636 Non-Executive - Independent Director
4 Mrs. Apeksha Kadam 08878724 Non-Executive-Non-Independent Woman Director

a. Changes in Directors:

i. Cessation/ Resignation:

During the year under review, there was no instance of Cessation/Resignation by any of the Director of Company.

ii. Director liable to retire by rotation:

Pursuant to provisions of Section 152(6) of the Act, Mr. Ankur Agrawal (DIN: 06408167), Executive Director, retires by rotation at the ensuing Annual General Meeting("AGM") and being eligible offers himself for re-appointment. The Nomination and Remuneration Committee and Board have recommended re-appointment of Mr. Ankur Agrawal. Brief profile of Mr. Ankur Agrawal as required under Regulation 36 (3) of the SEBI Listing Regulations read with SS-2 on General Meetings is provided separately by way of an Annexure to the Notice of the ensuing 41stAGM which forms part of this Annual Report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, perquisites and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committees of the Company.

None of the Directors are disqualified for being appointed as the Director of the Company in terms of Section 164 of the Act.

II. Key Managerial Personnel (KMP)

During the year under review, Ms. Sneha Mandelia has resigned as Company Secretary & Compliance Officer of the Company with effect from closure of business hours of September 15, 2022. The Board placed on record their appreciation for Ms. Sneha Mandelias services to the Company.

Further, as a sign of healthy and long relationship with the Company, the Board of Directors of the

Company, on recommendation of Nomination and Remuneration Committee, had afresh considered and approved the appointment of Ms. Sneha Mandelia as Company Secretary & Compliance Officer of the Company with effect from March 10, 2023.

Following were the Key Managerial Personnel as on March 31, 2023 pursuant to Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 :

Sr.No. Name of the KMP Designation
1 Mr.Bharat Shiroya Chief Executive Officer
2 Mrs. Nirmala Kanjar Chief Financial Officer
3 Ms. Sneha Mandelia Company Secretary & Compliance Officer

III. Directors Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance with an aim to improve the effectiveness of the Chairperson, Board committees, individual directors and the Board as whole.

The Company has formulated a policy for performance evaluation of the Independent Directors, Board committees, other individual Directors and Board as a whole which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors based on the recommendation of the Nomination & Remuneration Committee and Guidance Note on Board Evaluation issued by the SEBI.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness, on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Further, pursuant to Regulation 17 (10) of the SEBI Listing Regulations, the performance evaluation of the Independent Directors was carried out by the entire Board, in their meeting held on February 03, 2023, excluding the independent director being evaluated.

In a separate meeting of Independent Directors held on February 03, 2023, the performance evaluation of the Board as whole, Chairperson of the Company and the Non-Independent Directors was evaluated and they assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board. The performance evaluation of the Chairperson of the Company was carried out by the Independent Directors, taking into account the views of the Executive Directors and Non-Executive Directors.

The Independent Directors expressed their satisfaction with the evaluation process and flow of information between the Companys management and the Board.

IV. Declaration by Independent Directors:

The Company has received the necessary declarations from the Independent Directors under Section 149(7) of the Act read with Regulation 25(8) of the SEBI Listing Regulations that they meet the criteria

of Independence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. Further, all the independent directors are registered with the data bank maintained by the Indian Institute of Corporate Affairs ("IICA"). The Independent Directors have confirmed that they are not aware of any circumstances or situations that exist or are reasonably anticipated to exist that could impair or impact their ability to discharge their duties with an objective, independent judgment and without any external influence.

The Board, after taking these declarations and disclosures on record and acknowledging the veracity of the same, is of the opinion that the Independent Directors of the Company possess the requisite qualifications, experience, expertise, hold the highest standards of integrity, and are Independent of the Management of the Company. The terms and conditions of the appointment of Independent Directors are available on the website of the Company at http://www.comfortfincap.com/InvestorRelation.

Disclosure regarding the skills/expertise/competence possessed by the Directors is given in detail in the Report on Corporate Governance forming part of this Annual Report.

V. Familiarization program for Independent Directors:

Pursuant to Regulation 25(7) of the SEBI Listing Regulations, the Company has put in place a system to familiarize its Independent Directors. All Board members of the Company are invited to familiarize themselves with the Company, its management, its operations, and above all, the industrys perspective and issues. Separate sessions are organized during the year with domain experts to enable Board members to update their knowledge of the sector.

Details of the familiarization program on a cumulative basis are available on the Companys website at http://www.comfortfincap.com/InvestorRelation.The familiarization program aims to provide the Independent Directors understanding with respect to their roles, responsibilities in the Company, nature of the industry, business model, processes, policies and the technology and the risk management systems of the Company, the operational and financial performance of the Company, significant development so as to enable them to take well informed decisions in timely manner. The Company conducted one program during the financial year 2022-23, and the time spent by Independent Directors was in the range of 2 hours. The cumulative programs and meetings conducted till date are 7, and the time spent by Independent Directors is in the range of 12 hours. The policy on the companys familiarization program for independent directors is hosted on the companys website at http://www.comfortfincap.com/InvestorRelation.

VI. Board and Committee Meetings

During the financial year 2022-23, Six (6) Board Meetings and Twelve (12) Committee Meetings were held. The Board has established following three Committees in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

a. Audit Committee;

b. Nomination and Remuneration Committee;

c. Stakeholders Relationship Committee.

Further, the Company also has an Operations Committee to deal with the matters relating to frequent banking and day-to-day business affairs. The details of the Board and its Committees along with their composition, meetings held during the year are given under Corporate Governance Report forming part of this Annual Report.

13) AUDITORS

a. Statutory Auditor

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended, the Members of the Company at the 40thAGM held on September 21, 2022 had approved the re-appointment of M/s. A. R. Sodha & Co., Chartered Accountants (FRN 110324W) as the Statutory Auditors of the Company for a further period of 5 consecutive years to hold office from the conclusion of the 40th AGM till the conclusion of the 45th AGM to be held in the year 2027.

M/s. A. R. Sodha & Co., Chartered Accountants has audited the books of accounts of the Company for the financial year ended March 31, 2023 and have issued the Auditors Report there on. The report provided by of the Statutory Auditor along with the notes is enclosed with the Financial Statements.

The Statutory Auditor has issued modified opinion on the Financial Statements for the financial year ended March31,2023 as mentioned below:

"The company has not provided defined benefit obligation of gratuity under Ind-As-19 i.e. Employees Benefits."

Managements Explanation:

"The management is in due process of quantifying the gratuity obligation of the Company based on the actuarial valuation of the same and the said process will be completed in due course."

The Auditor has further commented that the Company has to obtain the actuarial valuation report to comply with the Accounting Standards.

Further, the Statutory Auditor of the Company has not reported any fraud as specified under Section 143(12) of the Act.

Further, the Statutory Auditor was present at the last AGM.

b. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Mitesh J. Shah & Associates, Practicing Company Secretaries (Membership No.: F10070; Certificate of Practice No.: 12891), as Secretarial Auditor of the Company for the financial year 2022-23 to conduct the Secretarial Audit and issue the Secretarial Audit Report in Form MR-3. The report of the Secretarial Auditor for the financial year 2022-23 is annexed as Annexure II to this Report. The report is self-explanatory and contains onequalification, reservation and adverse remarks for the financial year ended March 31, 2023 as mentioned below:

"The Company has submitted the unsigned financial statements and Audit Report for the financial year ended on March 31, 2022 in form AOC-04 NBFC."

Managements Explanation:

Due to the form size constraint on MCA portal, the Company has submitted pdf copy of Annual Report submitted to the Stock Exchange(s), regulatory authorities and other stakeholders. However, the financial statements are duly signed by two directors and KMP of the Company as required under the provisions of section 134 of the Companies Act, 2013.

c. Internal Auditor

M/s. ASHP & Co., Chartered Accountants, Mumbai performed the duties of internal auditors of the Company for the financial year 2022-23 and their report is reviewed by the Audit committee from time to time.

d. Cost Auditor

Provisions of section 148(1) of the Act read with Rule 3 of the Companies (Cost records and Audit) Rules, 2014 requiring maintenance and audit of cost records and appointment of cost auditor is not applicable to your company.

14) nomination and remuneration policy

The Company has a Nomination and Remuneration Policy for Directors and Senior Managerial Personnel in compliance with the provisions of Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations as approved by the Nomination and Remuneration Committee and the Board. The policy is available on website of the Company at web link: https://www.comfortfincap.com/Investorrelation. The detailed policy aspects are mentioned in Corporate Governance Report forming part of this report.

15) related party transactions

During the year under review, all related party transactions entered into are at arms length basis and in the ordinary course of business. Prior omnibus approval of the Audit Committee is obtained for Related Party Transactions which are of a repetitive nature and entered into in the ordinary course of business and at arms length. All related party transactions are placed before the Audit Committee and Board of Directors for review and approval on quarterly basis.

There were no material contracts or arrangements or transactions with related parties, therefore Form AOC-2 does not form part of this Report. Details of the Related Party Transactions are provided in the accompanying Financial Statements which form part of this Annual Report.

The Company has put in place a policy for related party transactions ("RPT policy") which has been reviewed and approved by the Audit Committee and Board of Directors respectively. The RPT policy

provides for identification of related party and related party transactions, materiality of related party transactions, necessary approvals by the Audit Committee/Board of Directors/ Shareholders of related party transactions and subsequent material modification thereof, reporting and disclosure requirements in compliance with the Act and the SEBI Listing Regulations.

Pursuant to Regulation 23(9) of the SEBI Listing Regulations, your Company has filed the half yearly reports on related party transactions with the Stock Exchanges.

The said RPT policy and Report has been uploaded on the website of the Company and can be accessed at the following link:http://www.comfortfincap.com/Investorrelation.

16) WHISTLE BLOWER POLICY / VIGIL MECHANISM

In compliance with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, the company has adopted a whistle blower policy. The Audit Committee oversees the functioning of this policy. The Companys Vigil Mechanism/Whistleblower Policy aims to provide the appropriate platform and protection for whistleblowers to report instances of fraud and mismanagement, if any, to promote reporting of any unethical or improper practice or violation of the Companys Code of Conduct or complaints regarding accounting, auditing, internal controls, or suspected incidents of violation of applicable laws and regulations, including the Companys Ethics Policy or Code of Conduct for Prevention of Insider Trading in the Company and the Code of Fair Practices and Disclosure.

The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairperson of the Audit Committee of the Company for any redressal. Details of the Vigil Mechanism and Whistleblower policy are covered in the Corporate Governance Report, which forms part of this Annual Report and is made available on the Companys website at http://www.comfortfincap.com/InvestorRelation.

During the financial year 2022-23, no cases under this mechanism were reported to the Company.

17) prevention of sexual harassment of women at workplace

The Company is committed to upheld and maintain the dignity of woman employees and to provide a safe and conducive work environment to all its employees and associates working in the Company. In Compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has put in place a Policy on Prevention of Sexual Harassment at Workplace. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

18) annual return

Pursuant to Sections 92(3) and 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended, the Annual Return of the Company for financial year 2022-23 is available on Companys website at www.comfortfincap.com/Investorrelation.

19) DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. In the preparation of the annual accounts for the financial year ended March 31,2023, the applicable accounting standards have been followed and there are no material departures;

ii. They have 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 the Company for the year under review;

iii. They have 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;

iv. They have prepared the annual accounts on going concern basis;

v. They have down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively

vi. They have devised a proper system to ensure compliance with the provisions of all applicable laws and that such system is adequate and operating effectively.

20) MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as stipulated under the Regulation 34(2)(e) of the SEBI Listing Regulations and the same is presented in a separate section forming part of this Annual Report. It provides details about the overall industry structure, global and domestic economic scenarios, developments in business operations / performance of the Companys various businesses, internal controls and their adequacy, risk management systems, human resources and other material developments during the financial year 2022-23.

21) REMUNERATION TO DIRECTORS, PARTICULARS OF EMPLOYEES AND HUMAN RESOURCES (HR)

Your Company had 6 employees as on March 31, 2023. The statement containing particulars of employees as required under Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company as no employees were in receipt of remuneration above the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Further, the ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197(12) of the Act read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure III of this Report.

22) INTERNAL CONTROL SYSTEMS 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.

23) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The operations of your Company are not energy intensive and hence, disclosure pursuant to the provisions of section 134(3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable. However, the Company is taking all possible measures to conserve energy. Several environment friendly measures are adopted by the Company. The Company continued to give major emphasis for conservation of Energy.

The Companys operations do not require significant import of technology.

24) FOREIGN EXCHANGE EARNINGS AND OUTGO

Detail of foreign exchange earnings and out required under section 134 (3) (m) of the Act read with Rule 8(3)of the Companies (Accounts) Rules,2014are as under:

Total Foreign Exchange used and earned by the Company is as follows:

Particulars Year Ended March 31,2023 Year Ended March 31, 2022
Foreign Exchange Used Nil Nil
Foreign Exchange Earned Nil Nil

25) CORPORATE SOCIAL RESPONSIBILITY ("CSR")

The Corporate Social Responsibility ("CSR") initiatives and activities of the Company are aligning with requirements of Section 135 of the Act and Rules, Circulars, Notifications made/ issued thereunder.

The amount required to be spent by the Company on CSR during the financial year 2022-23 does not exceed fifty lakh rupees and accordingly all the functions of CSR committee are discharged and approved by the Board of Directors of the Company.

During the financial year 2022-23, the Company has identified rural development projectsas the focused area for its CSR activity(ies). The Company has also in place a CSR Policy as approved by the Board and the same is available on the Companys website

athttp://www.comfortfincap.com/Investorrelation.

Further, Chief Financial Officer of the Company has certified that the funds disbursed have been utilized for the purpose and in the manner approved by the Board for financial year 2022-23. The detailed CSR Report in prescribed form is annexed to this Report as Annexure IV.

26) BUSINESS RISK MANAGEMENT

Your Company has laid down Risk Management Policy to identify risks inherent in the business operations of the Company which provides guidelines to define, measure, report, control and mitigate the identified risks. An enterprise-wide risk management framework is applied so that effective management of risks can be done. Risk is an integral part of every employees job. The Audit Committee and Risk Management Committee play an important role in evaluation of the risk management systems. The Policy is devised for identification of elements of risks and procedures for reporting the same to the Board. The Board reviews the business plan at regular intervals and develops the Risk Management Strategy which shall encompass laying down guiding principles on proactive planning for identifying, analyzing and mitigating all the material risks, both external and internal viz. Environmental, Business, Operational, Financial and others.

27) LOANS, GUARANTEE OR INVESTMENTS IN SECURITIES

The loan made, guarantee given or security provided in the ordinary course of business by a NBFC registered with RBI are exempt from the applicability of the provisions of Section 186 of the Act. As such, the particulars of loans and guarantee have not been disclosed in this Report. Pursuant to Regulations 34(3) of SEBI Listing Regulations the particulars of loans / advances have been disclosed in the notes to financial statements.

28) CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER CERTIFICATION

The Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have certified to the Board about compliance by the Company in accordance with Regulation 17(8) read with Part B of Schedule II of the SEBI Listing Regulations for the financial year ended March 31, 2023 and the same forms part of this Annual Report.

29) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the financial year 2022-23, there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in the future.

30) SECRETARIAL STANDARDS

Your Company has complied with all applicable Secretarial Standards(SS) issued by the Institute of Company Secretaries of India (ICSI).

31) general disclosure

• There has been no change in the nature of business of the Company;

• There was no revision in the financial statements;

• The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of section 54(1) (d) of the Act read with rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished;

• The Company has not issued any shares with differential rights and hence no information as per provisions of section 43(a)(ii) of the Act, read with rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished;

• The Company has not granted employee stock options as per provisions of section 62(1)(b) of the Act, read with rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014;

• During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to section 67(3) of the Act, read with rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014;

• During the year under review, no funds were raised through preferential allotment or qualified institutional placement.

• The Company has complied with relevant guidelines as prescribed by Reserve Bank of India from time to time and filed necessary forms as required by the NBFCs.

• During the year under review, the Company has not made any application under Insolvency and Bankruptcy Code, 2016 and there is no proceeding pending under the said Code as at the end of the financial year;

• During the year, the Company has not undergone any one-time settlement and therefore the disclosure in this regard is not applicable.

32) ACKNOWLEDGEMENTS

Your directors would like to express their sincere appreciation for the assistance and co-operation received from various stakeholders including financial institutions and banks, government authorities and other business associates who have extended their valuable support and encouragement during the year under review.

Your Directors take this opportunity to place on record their appreciation for the committed services rendered by the employees of the Company at all levels, who have contributed significantly towards the Companys performance and for enhancing its inherent strength.

Your directors also acknowledge with gratitude the encouragement and support extended by our valued members.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

OF COMFORT FINCAP LIMITED

Sd/-

ANKUR AGRAWAL CHAIRPERSON AND DIRECTOR DIN: 06408167

DATE: JULY 28, 2023 PLACE: MUMBAI

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