DIRECTORS’ REPORT To, The Members, FIRST FINANCIAL SERVICES LTD. Chennai Your Directors have great pleasure in presenting 30TH ANNUAL REPORT on the business and operations of your Company with the Audited Accounts for the year ended 31st March, 2015. The financial results of the Company are summarized below: 2. RESERVES: The Company does not propose to carry any amount to reserves. 3. DIVIDEND: The directors do not recommend any dividend for the year under consideration. 4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Management Discussion and Analysis Report is enclosed as a part of this report. 5. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION: Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors M/s. S A R A & Associates., Practicing Chartered Accountants Mumbai of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is included as a part of this report. 6. LISTING WITH STOCK EXCHANGE: The Company’s shares are listed on BSE Limited. However the Company has been suspended from BSE Limited due to penal reasons w.e.f 31st December 2014. 7. DIRECTORS: Mr. Chandrakant Mane was appointed by the Board w.e.f. 14th November 2014 and subsequently resigned from Board with effect from 15th April 2015 The independent directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement. The directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013. 7.1 Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 and the Non Independent Directors 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 Shareholders / Investors Relations and Grievance Committee. The Directors expressed their satisfaction with the evaluation process. 7.2 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. The remuneration policy as adopted by the company envisages payment of remuneration according to qualification, experience and performance at different levels of the organization. 7.3 Details of Meetings held: During the year ten Board Meetings and one independent directors’ meeting were held. The Details of the meetings and attendance thereof have been given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. 7.4 Re- Constitution of Committees The Board has constituted an Audit Committee, Nomination & Remuneration Committee and a Shareholders / Investors Relations And Grievance Committee, the details of which have been mentioned in the Corporate Governance Report. 8. AUDITORS: (i) Statutory Auditor The retiring auditors, namely M/s S A R A & Associates, Practicing Chartered Accountants, Mumbai, hold office until the conclusion of the forthcoming Annual General Meeting and are seeking re-appointment. They have confirmed that their appointment if made, at the Annual General Meeting, will be within the limits prescribed under Companies Act, 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41(1)(h) of the Listing Agreement. Members are requested to consider their reappointment (ii) Secretarial Auditor: According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Binu Singh, Company Secretary in Practice has been appointed as the Secretarial Auditor. The Secretarial Audit Report submitted by Secretarial Auditor - is enclosed as a part of this report in Annexure-1. (iii) Internal Auditor: M/S Singhal & Sewak Associates, Practicing Chartered Accountants, Mumbai performed the duties of internal auditors of the company for the year 2014-15 and their report is reviewed by the audit committee from time to time. 9. Comment on Auditor’s Report: Statutory Auditor: With respect to preliminary expenses, the Company had incurred certain expenses on account of further issue of shares as revenue expenditure which were treated as Preliminary expenses in the books of accounts of the Company. Out of the said expenses, 1/5 has been debited to profit & loss account for the financial year 2014-2015 and balance has been carried forward for the next years with expectation of future benefit. The management has now decided that if any benefit will not arises in the next financial year 2015-2016 then all the preliminary expenses will be written off in compliance with Accounting Standard 26. As regards not making provision for retirement benefits of employees, the same has not been done in view of the meager staff strength. Secretarial Auditor: As regards the Company not having appointed the Key Managerial Personnel i.e. Company Secretary and Chief Financial Officer as required under section 203 of the Companies Act, 2013, the Company has made suitable efforts for the recruitment of suitable candidate for the post of Company Secretary and CFO. As regards delay in filing of certain returns/ forms with the Registrar of Companies, these forms/returns have been filed by making the payment of the additional fee as prescribed by the law. With regards to SEBI interim order dated December 19, 2014 the company has filed an appeal with Securities Appellate Tribunal on 12.01.2015 against the abovesaid order. The hearing took place and Securities Appellate Tribunal has directed the SEBI in the hearing held on 21st July 2015 to conclude the investigation and passed appropriate order on merits and accordance with law as expediously as possible preferebly by June 30, 2016. 10. 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, 2015 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, 2015 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 11. 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. There is no Foreign Exchange Earnings and Outgoes during the year. 12. 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 www.ffslonline.com/whistleblower.html 13. RELATED PARTY TRANSACTIONS: Related party transactions that were entered during the financial year were on an arm’s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company’s 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 for its omnibus approval and the particulars of contracts entered during the year as per Form AOC2 is enclosed as Annexure 2. The Board of Directors of the Company has, 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 Listing Agreement. This Policy was considered and approved by the Board and has been uploaded on the website of the Company at www.ffslonline.com/relatedparty.html 14. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure 3. 15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 17. 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 18. DEPOSITS: The Company has not accepted or invited any deposits during the financial year 2014-2015 19. PARTICULARS OF EMPOLYEES UNDER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RILES, 2014 The provisions of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended are not applicable to the company, as there are no employees whose remuneration is in excess of the limits prescribed. 20. CASH FLOW STATEMENT: In conformity with the provisions of Clause 32 of the Listing agreement and requirements of Companies Act, 2013, the Cash flow Statement for the year ended 31.03.2015 is annexed here to as a part of the Financial Statements. 21. INTERNAL CONTROL SYSTEM 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. 22. SEBI ORDER: The SEBI has passed an ex-parte ad interim order dated December 19, 2014 under Section 11 (1), 11 (4) and 11 (B) of the Securities Exchange Board of India Act, 1992 for your Company for not accessing the capital market. Further SEBI also passed a final order dated 20th April 2015 in continuation of the interim order passed on 19th December 2014. Further SEBI has also restricted Mr Nirmal Singh Mertia, Whole Time Director of our Company for not accessing the capital market vide same order. Your company has filed an appeal with Securities Appellate Tribunal (SAT) on 12.01.2015 against the abovesaid order. The hearing took place and Securities Appellate Tribunal has directed the SEBI in the hearing held on 21st July 2015 to conclude the investigation and passed appropriate order on merits and accordance with law as expediously as possible preferebly by June 30, 2016. Further your Company has been suspended from BSE Ltd in equity trading due to penal reasons w.e.f 31.12.2014 23. POSTAL BALLOT: During the year one postal ballot held for the purpose of shifting of the registered office of your Company from Chennai, state of Tamil Nadu, to Mumbai state of Maharashtra. The Shareholders approved the Shifting of Registered office of the Company on May 7, 2015 by passing a special resolution in this regard. Your Company has filed a petition with the Regional Director Southern Region on 30.06.2015 for the purpose. The matter is under process. 24. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 A policy on Sexual Harassment of Women At Workplace has been drafted and approved by the Board in its meeting held on May 30, 2015. A committee namely Local Control Committee has been construed for protection of women against Sexual Harassment at the workplace consisting the following: Name of the Member Designation Ms. Ritu Tusham Chairman Ms. Sunita Ravetkar Member Mr. Nirmal Singh Mertia Member The Committee will look after the complaints received from the women employees and will also work for Safety of Women at workplace. 25 ACKNOWLEDGMENT: Your 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. FOR AND ON BEHALF OF THE BOARD Sd/- Nirmal Singh Mertia Whole Time Director Sd/- Ritu Tusham Director PLACE: Mumbai DATE: 14.08.2015 |