PMC Fincorp Ltd Directors Report.
PMC FINCORP LIMITED
Your directors have pleasure in presenting the 34th Annual Report together with the Audited Accounts of the company for the year ended 31 March, 2019.
The Companys financial performance for the year under review along with previous years figures are given hereunder: Particulars for the Year ended 31st March, 2019.
(Amount in Rs.)
Year ended 31.03.2019
Year ended 31.03.2018
|Profit/Loss Before Interest and Depreciation (EBITDA)||3,11,86,732||3,54,28,340|
|Provision for Depreciation||3,45,848||5,34,470|
|Net Profit Before Tax||2,20,50,900||1,41,92,836|
|Provision for Tax||61,15,435||40,57,919|
|Net Profit After Tax||1,59,35,465||1,01,34,917|
Your Company has earned Income from operation and profit before tax aggregated to Rs. 8.50 Crores and Rs. 2.21 Crores during the current year, respectively as compared to Income Rs. 5.70 Crores and Profit Rs. 1.42 Crores during the previous year.
Your Directors do not recommend any dividend for the financial year ended on 31st March, 2019 and no amount has been transferred to General reserve.
The paid up equity share capital as on March 31, 2019 is Rs. 50,90,61,200. There was no public issue, rights issue, bonus issue or preferential issue during the year. The company has not issued shares with differential voting rights, sweat equity shares not it has granted any stock options.
The Companys Share are Listed with BSE Limited, Mumbai. Your Company has paid the Annual Listing Fee up to date and there are no arrears. The BSE have nation-wide trading terminals and therefore provide full liquidity to the investors.
The Securities and Exchange Board of India (SEBI), on September 2, 2015 issued SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. The said regulations which became effective December 1, 2015 required all Listed Companies to enter into the fresh Listing Agreements within six months from the effective date. Accordingly, the Company entered into Listing Agreement with BSE Limited during February, 2016.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy and technology absorption
The company has no activity relating to consumption of energy or technology absorption.
The Company does not have any foreign exchange earnings.
RISK MANAGEMENT FRAMEWORK
The Company has a robust internal business management framework to identify, evaluate business risks and opportunities which seeks to minimize adverse impact on the business objectives and enhance the Companys business prospects. As an NBFC, PMC is exposed to credit risk, liquidity risk and Interest rate risk. Risk Management is an Integral part of the Companys business strategy.
Committees of the Board
The Company has the following Committees constituted in accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015:
Nomination & Remuneration Committee
Stakeholders Relationship Committee
The details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in the "Report on Corporate Governance" forming part of this Annual Report in Annexure -IV.
VIGIL MECHANISM & WHISTLE BLOWER POLICY
The Company has a vigil mechanism and a whistle blower policy. The same has been posted on the Companys website and the details of the same are given in the Corporate Governance Report.
The Company has adopted the various policies in compliance with the provisions of SEBI (LODR) Regulations, 2015 at their duly convened Board meetings held on 29th December, 2015:
1. Policy for Determination of Materiality of Disclosures.
2. Policy on Materiality of Related Party Transactions.
3. Adoption of policy on preservation of documents.
4. Adoption of archival policy.
The details of the Policy are available on the website of the Company at www.pmcfinance.in.
The company has been registered with Reserve Bank of India as Non Banking Finance Company vide Registration No. 12.00128 Dated 1st April 1998. Your Company is categorized as a Non-deposit taking Non-Banking Financial Company. The Company has not accepted any deposit from the public during the year pursuant to the provisions of Section 73 of Companies Act, 2013.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act, 2013, some amount is due for transfer to investor education and protection fund. Transfer of funds is in under process.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE ANDTHE DATE OFTHE REPORT
There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.
Our Company has in accordance with the provisions of Section 45IC of the Reserve Bank of India (RBI) Act, 1934, created a Reserve Fund and during the year under review the Company has transferred an amount of Rs. 31,92,407/- (Rupees Thirty One Lakh Ninty Two Thousand Four Hundred Seven Only) out of the profits of the year to the said Reserve Fund.
DEMATERILISATION OF SHARES
Your Company has connectivity with NSDL & CDSL for dematerlisation of its equity shares. The ISIN no. INE793G01035 has been allotted for the company. Therefore, the member and/or investors may keep their shareholding in the electronic mode with their Depository Participates.
REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing AGM. Any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company, being a non-banking finance company registered with the Reserve Bank of India and engaged in the business of giving loans, is exempt from complying with the provisions of section 186 of the Companies Act, 2013 in respect of loans and guarantees. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been given in this Report.
Information regarding investments covered under the provisions of section 186 of the said Act are detailed in the financial statements.
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 pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company 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.
RELATED PARTY TRANSACTIONS
Transaction entered with related parties for the year under review were in the ordinary course of business and are placed before the Audit Committee on regular basis. All the transactions entered with related parties do not attract the provisions of Section 188 of the Companies Act, 2013 except one related party transaction which is covered under subsection (1) of section 188 of the Companies Act, 2013, the particulars of said contract or arrangement with related party in the Form AOC-2 is annexed as Annexure I.
A policy on materiality of related party transactions and dealing with related party transactions is placed on the Companys website www.pmcfinance.in.
SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval from the Ministry of Corporate Affairs, the Institute of Company Secretaries of India (ICSI) has, on 23 April 2015, notified the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) effective from 1 July 2015. The Company is compliant with the same.
Sunil K. Gupta & Associates, Chartered Accountants, who are the Statutory Auditors of the Company, hold office, in accordance with the provisions of the Act, for a period of five years from the conclusion of the 32nd Annual General Meeting (AGM) until the conclusion of the 37th AGM. In accordance with Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors needs to be ratified by the members at every AGM. The Company has received a confirmation from Sunil K. Gupta & Associates that their appointment, if ratified, at the 34th AGM will be in accordance with Sections 139 and 141 of the Act and rules made thereunder. Accordingly, the Members are requested to ratify the appointment of the Statutory Auditors at the 34th AGM.
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company has appointed M/s Ashu Gupta & Co., Company Secretaries as Secretarial Auditors of the Company, to undertake the secretarial audit of the Company for the FY 2018-19. The Secretarial Audit report MR-3 submitted by Company Secretary in Practice is enclosed as part of this report Annexure-II.
EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS
As required under section 204(1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to during the period Registrar of Companies Kanpur issued a notice regarding Complaint against the company dated 04.12.2018 vide no. TC/COMP/20-6998/6147, for which company filed reply on 04.01.2018.
M/s. KPSP & Associates (formerly known as Krishan K Aggarwal & Associates), Chartered Accountants (FRN: 019471N), who has been appointed as Internal Auditors of the Company during last financial year for a period of three years is continuing as internal auditors . Their reports are being reviewed by the Audit Committee from time to time.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Controls with proper checks to ensure that transactions are properly authorised, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.
The internal auditors of the Company review the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. Follow up mechanism is in place to monitor the implementation of the various recommendations.
COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 28th September, 2014 formulated and/or reconstituted the Nomination and Remuneration Committee and Policy of your Company on the recommendations of Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policies relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Board of Directors duly met 7 times during the financial year from 1st April, 2018 to 31st March, 2019.
Pursuant to provisions of the Companies Act, 2013, and Regulation 17(10) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, The Board of Directors has carried out an annual performance evaluation of its own performance, the Directors individually including Independent Directors. 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.
In compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Independent Directors held a meeting on 14th February, 2017, and they, inter alia:
1. Reviewed the Performance of Non-Independent Directors and the Board as whole.
2. Reviewed the performance of the chairperson of the Company.
3. Assessed the quality, quantity and timeliness of flow of Information between the Company Management and the Board, which is necessary for the Board to effectively and reasonably perform their duties.
The Board of your Company consists of the following Directors:
|Category||Name of Directors|
|Executive Director||Mr. Raj Kumar Modi, Managing Director|
|Non - Executive - Non - Independent Directors||Mrs. Rekha Modi|
|Mr. Pramod Gupta|
|Non - Executive Independent Directors||Mr. V.B. Aggarwal*|
|Mr. Mahavir Prasad Garg**|
* Resigned with effect from December 16, 2018.
** Appointed as Additional Independent Director with effect from January 14, 2019.
The composition of the Board is in line with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015. All the Directors are having vast knowledge and experience in their relevant fields and the Company had benefitted immensely by their presence in the Board. The key Board qualifications, expertise, attributes are given in details in the Report on Corporate Governance forming part of this Report.
According to the Companies Act, 2013, at least two-thirds of the total number of directors (excluding independent directors) shall be liable to retire by rotation. Mrs. Rekha Modi, Director (DIN: 01274200) retires at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mrs. Rekha Modi as Director of the Company.
a) Changes in Directors and Key Managerial Personnel (KMP) during the FY 2018 - 2019
During the FY 2018 - 2019, Mr. Mahavir Prasad Garg (DIN: 00081692) has been appointed as the Additional Independent Director on the Board with effect from February 14, 2019. The Board of your Company recommends the regularization of appointment of Mr. Mahavir Prasad Garg in the ensuing AGM for a period of five years.
b) Declaration by Independent Directors
The Company has received necessary declaration from each Independent Directors under section 149(7) of the Companies Act, 2013 that he/she fulfills all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies 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 at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had 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;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) 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.
(f) 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.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits from the public or its employees under Section 73 of Companies Act, 2013 and rules made thereunder during the year under review.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act, 2013, Corporate Social Responsibility Policy is not applicable on your Company. Accordingly the CSR Committee was not constituted.
Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT - 9 is appended as Annexure III to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015, forms part of this Annual Report .
A report on corporate governance as per the Listing Regulations is attached and forms part of this report. The report also contains the details as required to be provided on the composition and category of directors, number of meetings of the board, composition of the various committees including the audit committee, nomination and remuneration committee, stakeholders relationship committee and corporate social responsibility committee, annual board evaluation, remuneration policy, criteria for board nomination and senior management appointment, whistle blower policy/vigil mechanism, disclosure of relationships between directors inter-se, state of companys affairs, etc. The managing director and the chief financial officer have submitted a certificate to the board regarding the financial statements and other matters as required under regulation 17(8) of the Listing Regulations.
COMPLIANCE WITH RBI GUIDELINES
The Company is registered with the Reserve Bank of India as a NBFC within the provisions of the NBFC (Reserve Bank of India) Directions, 1998. The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it.
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c. BONUS SHARES
The Company has not issued any Bonus Equity Shares during the year under review.
d. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors acknowledges gratefully the shareholders for their support and confidence reposed on your Company.
And your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company.
|FOR AND ON BEHALF OF THE BOARD OF DIRECTORS|
|Place : New Delhi||(RAJ KUMAR MODI)|
|Date : 30.05.2019||(Managing Director)|
|DIN : 01274171|