First Financial Services Ltd Directors Report.

To,

The Members,

FIRST FINANCIAL SERVICES LTD, (CIN: L85100TN1984PLC011231)

Chennai

Your Directors have great pleasure in presenting 35th ANNUAL REPORT on the business and operations of your Company with the Audited Accounts for the year ended 31st March, 2020. The financial results of the Company are summarized below:

1. FINANCIAL RESULTS

PARTICULARS FINANCIAL YEAR ENDED 31st MARCH 2020 FINANCIAL YEAR ENDED 31st MARCH 2019
Total Revenue 19,713,811.00 5,836,992.00
Profit/(Loss) before Taxation (22,685,976.00) (38,478,376.00)
Provision for Taxation - -
Current Tax - -
-Deferred Tax 2,712,579.00 -
Tax of earlier year - -
Profit/(Loss) After Tax (25,398,555.00) (38,478,376.00)

FINANCIAL HIGHLIGHTS

• Profit/(Loss) before taxes for fiscal 2020 was Rs.(22,685,976).

• Profit/(Loss)after taxes for fiscal 2019 was Rs. (25,398,555).

• Basic Earning Per Share for fiscal 2020was Rs. (0.31) per share.

• Net Worth of Company stood at Rs. 114,754,656.00

IMPACT OF COVID-19 PANDEMIC AND MITIGATION MEASURES IMPLEMENTED

Due to COVID-19 outbreak globally in 2020 and to restrict the spread of the pandemic in India, the Government announced national lockdown with effect from March , 2020, which caused disruption of supply of goods across business and industries. These restrictions had resulted in temporary shutdown of operations at all plants and offices for approximately 30 days The Company has taken various steps to support its various stakeholders and maintain operations.In accordance with the Governments directive post partial lifting of the lockdown from April 2020 and after receiving the necessary approvals from the respective government departments, the Company had resumed partial operations. The necessary precautions and safety measures are put in place to maintain social distancing.

2. RESERVES

The Company does not propose to carry any amount to reserves.

3. CAPITAL STRUCTURE

There was no change in the Authorized and Paid-up Share Capital of the Company during the year.

The Authorized Share Capital of the Company is Rs. 160,000,000/- (Rupees Sixteen Crores only) divided into 160,000,000 (Sixteen Crores) Equity Shares of Rs. 1/- (Rupee One) each.

The Paid-up Share Capital of the Company is Rs. 80,747,600/- (Rupees Eight Crores Seven Lacs Forty Seven Thousand and Six Hundred only) divided into 80,747,600 (Eight Crores Seven Lacs Forty Seven Thousand and Six Hundred) Equity Shares of Rs. 1/- (Rupee One) each.

4. DIVIDEND

The directors do not recommend any dividend for the year under consideration.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of the Company.

6. CHANGE IN NATURE OF BUSINESS

There is no change in nature of business carried on by the Company.

7. MANAGEMENTDISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report is enclosed as a part of this report.

8. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 17 to 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance is included as a part of this Annual Report. A Certificate from the Statutory Auditors M/s. Singhal & Sewak., Practicing Chartered Accountants, Mumbai of the Company confirming the compliance with the conditions of Corporate Governance as stipulated of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as a part of this report in Annexure-4.

9. LISTING WITH STOCK EXCHANGE

The Companys shares are listed on BSE Limited. However the Company has been suspended from BSE Limited due to surveillance measures w.e.f 31stDecember , 2014.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) CHANGES IN DIRECTORS

Mr. Selvaraj Selvam Arumai (DIN: 08268028), Additional Director of the Company was regularize in the 34th Annual General Meeting of the Company and appointed as an Independent Director of the Company for a term of 5 years. No other changes took place in the composition of Board of Directors during the financial year 2019-20.

ii) DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given a declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Directors during the year.

iii) CHANGES IN KEY MANAGERIAL PERSONNEL

There are no changes in the composition of the Key Managerial Personnel.

iv) MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company have met Twelvetimes during the year on 08th April 2019, 10th May 2019, 29th May 2019, 20th June 2019, 05th August, 2019, 13th August 2019, 31st August 2019, 22nd October 2019, 01st November 2019, 14th November 2019, 09th December 2019 and 13th February 2020 in respect of which proper notices were given and proceedings were properly recorded, signed and maintained in the Minutes Book kept by the Company for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

v) COMMITTEES OF THE BOARD

The Company has constituted an Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee as per the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its Committees are provided under the Corporate Governance Section in this Annual Report. The composition of the Committees, as per the applicable provisions of the Act and Rules, are as follows:

Name of the Committee Composition of the Committee
Audit Committee Mrs. Chandrika Panchal (Chairperson)
Mr. Nirmal Singh Mertia (Member)
Mr. Girishkumar Panchal (Member)
Nomination and Remuneration Committee Mrs. Chandrika Panchal (Chairperson)
Mr. Girishkumar Panchal (Member)
Mr. Selvaraj Selvam Arumai(Member)
Stakeholders Relationship Committee Mr. Girishkumar Panchal (Chairman)
Mr. Nirmal Singh Mertia (Member)
Mrs. Chandrika Panchal (Member)

vi) BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 Whole Time Director 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 Stakeholders Relationship Committee. The Directors expressed their satisfaction with the evaluation process.

11 . POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on Directors Appointment and Remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report.

12. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis, which forms part of this Report.

13. DISCLOSURE OF REMUNERATION OF EMPLOYEES COVERED UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:-

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

i. The percentage increase in Remuneration of each Director and ratio of the Remuneration of each Director to the median Remuneration of the employees of the Company for the financial year:

Sr No Directors Name Designation Remuneration 2019-2020 Remuneration 2018-2019 Increase/Decre ase
1. Nirmal Singh Mertia Whole Time Director 4,67,505 3,91,723 19.35%

ii. The percentage Increase In remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Sr No Directors Name Designation Remuneration Remuneration Increase/Decre ase
2019-2020 2018-2019
1. Nirmal Singh Mertia Whole Time Director 4,67,505 3,91,723 19.35%

iii. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

No employee of the Company is falling under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

14. AUDITORS

i) Statutory Auditor s

The Company in its 33rd Annual General Meeting (AGM) held on 30th September, 2018 appointed M/s Singhal & Sewak, (Firm Registration No. 011501C), Chartered Accountants, Mumbai, as its Statutory Auditors to hold office for the period of five consecutive years from the conclusion of the 33rd Annual General Meeting until the conclusion of 38th Annual General Meeting of the Company.

ii) Secretarial Auditor

According to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Secretarial Auditor – Somani & Associates (Company Secretaries) (M. No. F9364, COP No. 8642), is enclosed as a part of this report in Annexure-1.

iii) Internal Auditors

M/s Rahul Drolia, Chartered Accountant, Mumbai performs the duties of Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time.

15. COMMENT ON AUDITORS REPORT

Statutory Auditors

The Statutory Auditors report is self explanatory in nature.

Secretarial Auditor

The Company is in the process of appointing a Company Secretary and Chief Financial Officer required under section 203 of the Companies Act, 2013 and making all necessary efforts for the same.

In the final order passed on 02 April, 2018 , SEBI has prohibited First Financial Services Limited from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of three years from the date of said order i.e. 02nd April, 2018. However, Further company filed an appeal to SAT and SAT, vide its final order dated on 27.09.2019, ordered that it was observed that 3 years already elapsed from the impugned exparte order dated 19/12/2014 and restriction on buying or selling the securities will come to an end.

Your Company believes in best investor relation practices. Hence, Management of the Company ensures to be more careful /proactive and dedicated in all of the compliances henceforth.

16. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:

i) That in the preparation of the annual accounts for the financial year ended 31st March, 2020 the applicable accounting standard had been followed along with proper explanation relating to material departures.

ii) 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 and loss of the Company for the year under review.

iii) 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.

iv)That the directors had prepared the accounts for the financial year ended 31st March, 2020 on a going concern basis.

v) 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.

vi)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

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of energy and technology absorption information pursuant to section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is not applicable to the Company. There are no Foreign Exchange Earnings and Outgoes during the year.

18. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://ffslonline.com/whistle-blower-policy/

19. RELATED PARTY TRANSACTIONS

Related party transactions that were entered during the financial year were on an arms length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-2.

The Board of Directors of the Company have, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Policy was considered and approved by the Board and has been uploaded on the website of the Company at http://ffslonline.com/related-party-transcation/

20. EXTRACT OF ANNUAL RETURN

As per amendment section 23 of the Companies(Amendment) Act, 2017, extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-3 as well as available on the website of the Company at http://ffslonline.com

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, are given in the notes to the Financial Statements.

22 . DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

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.

23. DEPOSITS

The Company has not acceptedor invited any deposits during the financial year 2019-2020.

24. DISCLOSURE OF MAINTENANCE OF COST RECORDS

Maintenance of Cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 is not applicable to the Company.

25. CASH FLOWSTATEMENT

In conformity with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and requirements of Companies Act, 2013, the Cash flow Statement for the financial year ended 31.03.2020 is annexed here to as a part of the Financial Statements.

26. LEGAL

In the final order passed on 02 April, 2018 , SEBI has prohibited First Financial Services Limited from accessing the securities market and further prohibit them from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of three years from the date of said order i.e. 02nd April, 2018. However, Further company filed an appeal to SAT and SAT, vide its final order dated on 27.09.2019, ordered that it was observed that 3 years already elapsed from the impugned exparte order dated 19/12/2014 and restriction on buying or selling the securities will come to an end.

27. POSTAL BALLOT

During the year, no postal ballots were held.

28. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Corporate Social Responsibility under section 135 of Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable on the Company.

29. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings. As required in terms of Secretarial Standard (SS)-4, it is hereby confirmed that there is no corporate insolvency resolution process initiated under the Insolvency and Bankruptcy Code, 2016.

30. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

There was no case filed during the year, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Further, the Company ensures that there is a healthy and safe atmosphere for every women employee at the workplace and have made necessary policies for safe and secure environment for women employees. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. The Company affirms that during the Year under review, no complaints were received by the Committee for redressal.

31. ACKNOWLEDGMENT

The Directors wish to thank and deeply acknowledge the cooperation and assistance received from the Bankers and Shareholders. The Director also wishes to place on record their appreciation of the devoted services of employees of the Company.

Place: Mumbai On behalf of the Board
Date:01 stSepte mber, 2020 For First FinancialServices Limited
Sd/- Sd/-
Mr. Nirmal Singh Mertia Mr. Girishkumar Panchal
Whole Time Director Director
(DIN: 03584434) (DIN: 07227360)