BOARDS'REPORT Dear Members. Your Directors' have pleasure in presenting their 20th Annual Report together with the Audited Statement of Accounts for the year ended March 31st, 2015. PERFORMANCE AND FUTURE PROSPECTS The performance of the Company has been good due to favorable market condition. The Company has seen some gains from the investing of shares and securities. The Stock markets have been showing positive signs and it is expected that the trend shall continue in future. During the Financial Year 2014 ~ 2015 the company has earned a net profit of Rs. 242.33 million as compared to last Financial Year 2013-2014 which was Rs.21.85 millions. The future seems to be bullish as the Stock markets seems an upward trend. The Company is taking full advantage of the good market conditions by investing and hedging to earn more profits. DIVIDEND & RESERVES The Directors did not recommend any dividend for the Financial Year ended 31sl March, 2015. Profit for the Financial' Year ended 31s' March 2015 was carried forward to Profit and Loss Account. No amounts have been transferred to any reserves, during the year under review CHANGE IN THE NATURE OF BUSINESS There are no changes in the nature of business during the Financial Year 2014 - 2015. INTERNAL FINANCIAL CONTROL The Company has appointed M/s. H.N. Bafna & Co. as Internal Auditor of the Company under Section 138 of the Companies Act, 2013. The Company has effective internal financial control and risk mitigation system. The Audit committee reviews the adequacy and effectiveness of the Internal Financial control and suggests the improvements for the same. Orders Passed by Regulatory Authority: During the Financial Year under review, there were no material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future; SUBSIDIARY/JOINT VENTURES The Company has no subsidiaries or joint ventures with any other entities DEPOSITS The Company has not accepted any deposits under the Companies Act 2013 for the Financial Year 20142015. AUDITORS'REPORT M The Statements made by the Auditors in their report are self-explanatory and doesn't require any comments by the Board of Directors. STATUTORY AUDITOR The Board recommends to the members for the re-appointment of M/s Kochar & Associates, Chartered Accountants, whose term of appointment as the Statutory Auditor expires at the conclusion of the ensuing Annual General Meeting. The Audit Committee has recommended to appoint M/s Kochar & Associates, Chartered Accountants as the Statutory Auditors for the Financial Year 2015 - 2016 and the same has been approved by the Board. Certificate from the Auditors has been received to the effect that their re appointment if made, would be within limits prescribed under Section 139 of the Companies Act, 2013. SHARE CAPITAL A) Issue of Equity Shares with Differential Rights: The Company has not issued any equity shares with differential rights during the Financial Year 2014 - 2015. B) Issue of Sweat Equity Shares: The Company has not issued any Sweat Equity Shares during the Financial Year 2014-2015. C) Issue of Employee Stock Options: The Company has not issued any Employee Stock Options during the Financial Year2014-2015. EXTRACT OF ANNUAL RETURN The details forming the part of the extract of the Annual Return in Form MGT 9, as required under Section 92 of the CompaniesAct2013, is included in this Report as Annexure-Aand forms an integral part of thi Report. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION The information relating to conservation of energy and technology absorption by the Companies annexed to the report as "Annexure B". FOREIGN EXCHANGE EARNING AND OUTGO During the year under review there were no earnings in foreign exchange and there was no foreign exchange out go. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The provisions of the Section 135 of the Companies Act 2013 have become applicable to the Company from 1s,April 2015. Accordingly the Board of Directors has constituted a CSR Committee to undertake the initiatives. The Board of Directors in consultation with the CSR committee have formulated and adopted the CSR policy. The Annual Report on CSR activities is not annexed as the provisions of Section 135 were not applicabl for the year2014-2015 and they became applicable to the Company only on 181 April 2015. DIRECTORS A) Changes in directors and appointment of Key Managerial Personnel: During the year under review, the Company appointed Mrs. Sangeeta Ashok Bharadia (DIN: 03335888) as an Additional Director until the conclusion of the forthcoming Annual General Meeting. The Company seeks shareholder's approval for appointing Mrs. Sangeeta Ashok Bharadia (DIN: 03335888) as a Non Executive Promoter Director of the Company liable to retire by rotation. During the year under review, Mr. Anil Jain (DIN: 00020074), Mr. Anil Parakh (DIN: 01124855) and Mr. Yash Poonamchand Golechha (DIN: 00035469) have resigned from the Board due to their pre-occupation. The Company appreciates for their valuable contribution during their tenure. Mr. Deepak Moolchand Lahoti has been appointed as Chief Financial Officer with effect from 10lh February 2015 In accordance with the provisions of Section 152 of the Companies Act 2013 and the Articles of Association of the Company Shri. Manoj Bharadia, (DIN: 00035385) Whole Time Director retires by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment. B) Declaration by Independent Directors and Re-appointment of Directors: All the Independent Directors have given the declarations that they meet the criteria for ! Independence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement. C) Board Evaluation : Pursuant to the provisions of the Companies Act 2013, and clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, 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. The Board of Directors expressed their satisfaction with the evaluation process The Board of Directors met Twelve times during the Financial Year 2014-2015. AUDIT COMMITTEE The composition of the Audit Committee and the number of Audit Committee meetings held during the Financial Year 2014 -2015 forms a part of the Corporate Governance Report. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES The Company has a Vigil Mechanism policy to report genuine concerns or grievances. The detail forms a part of the Corporate Governance Report. The policy on Vigil Mechanism as approved by the Board uploaded on the Company's website. NOMINATION AND REMUNERATION COMMITTEE The Company has a policy framed for Remuneration and Appointment of Directors, Key Manageri Personnel and senior management of the Company. The composition and the policy forms a part of the Corporate Governance Report. The policy on Nomination and Remuneration as approved by the Board is uploaded on the Company's website. PARTICULARS OF TRANSACTION BETWEEN THE COMPANY AND THE NON EXECUTIVE DIRECTORS During the year the Company has not entered into any transaction with its Directors. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/s 186 OF THE COMPANIES ACT 2013. The Company has not given any loan, guarantee or security in connection with any loan to any other body corporate or person exceeding the specified limits mentioned under section 186(2) of the Companies Act 2013. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules made there under the Company has appointed M/s Priti J Sheth & Associates, a firm of Company Secretaries in Practice (CP. No 5518) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as "Annexure C" and forms an integral part of this report. DIRECTOR COMMENT ON QUALIFICATION OR OBSERVATION The Company is in process of Appointing Company Secretary as required by the provision section 203 of CompanyAct2013. CORPORATEGOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate governance practice followed by the Company, together with a certificate from the Company's Statutory Auditor's confirming compliance, forms an integral part of the Report. RISK MANAGEMENT POLICY The stock markets in India are not immune to the global developments. Risks are assessed and ranked according to the likelihood and impact of them occurring. Existing controls are assessed and mitigation measures discussed. Risk are assessed and reviewed regularly at top level and risk mitigation measures taken promptly to address any adverse situation. Morever your company is essentially involved in arbitrage opportunities and with the introduction of the uniform settlement cycle the arbitrage opportunities have significantly reduced. The Board of Directors in consultation with the Audit Committee has framed a policy for management and mitigation of risk faced by the in its day to day operations, further the Board of Directors and the Senior Management of the Company have been entrusted with the responsibility of identification, development and implementation of the same across the organization. Some of the Risks that the Company is exposed to are: 1. Market Risks Any investment in the stock markets carriers a certain amount of risk based on exposure. Some of the Market risks are Micro Economic Risk. Macro Economic Risk, Valuation Risk, Speculative Risk and Leverage Risk. The Company is mitigating all these risk through proper implementation of risk management policy. 2. Financial Risks: Given the interest rate fluctuations, the company has adopted a prudent and conservative risk mitigation strategy to minimize interest costs. 3. Regulatory Risks: The company is exposed to risks attached to various statues and regulations. The Company is mitigating these risks through regular review of legal compliances carried out through internal as well as external compliances audit. 4. Human Resources Risks: Retaining the existing talent pool and attracting new talent are major risks. The company has initiated various measures for learning and development activities. RELATED PARTY TRANSACTIONS The Company has entered into transactions with related parties falling under the purview of Section 188 of the Companies Act 2013 and Rules made thereunder. However all the said transactions were on arms length basis. In terms of Listing Agreement as well as policy on materialism framed by the Company, above mentioned transactions don't qualify to be considered as 'Material Transaction'. Keeping in view the above-mentioned points, Statement in Form AOC 2 is not required to be annexed DIRECTORS'RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act 2013: 1. That in preparation of the Annua! Accounts forthe year ended 31st March 2015, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any; 2. And applied them consistently and made judgements 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 March 31,2015 and of the profit of the company for the year ended on that date; 3. 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. 4. That the Directors have prepared the annual accounts on a going concern basis. 5. 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 6. 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. PARTICULARS OF REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONS AND EMPLOYEES Details of Remuneration as per Companies( Appointment and remuneration of Managerial Remuneration) Rules 2014 are as follows: (i) the ratjo of the remuneration of each director to the median remuneration of the employees of the company for the financial year: Deepak Lahoti -2.82, Manoj Bharadia-2.02 (ii) the" percentage increase in remuneration of each director, Chief Financial Off icer,Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: N A (iii) the percentage increase in the median remuneration of employees in the financial year: IMA (iv) the number of permanent employees on the rolls of company: 61 (v) the explanation on the relationship between average increase in remuneration and company performance: NA (vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company: PAT-24.23 Crs, Deepak Lahoti -'0.052 Crs, Manoj Bharadia-0.0375 crs (vii) variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year: FY15 P/E - 1.96, FY14 P/E - 10.62, Variation of MCap - 104%, From IPO-390% (viii) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: NA (ix) the key parameters for any variable component of remuneration availed by the directors: NA (x) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: 0.69 (xi) affirmation that the remuneration is as per the remuneration policy of the company: Yes ACKNOWLEDGEMENTS The Board of Directors of acknowledge the continued the support and co-operation extended by the Statutory Authorities, Government Authorities, Bankers, Stock Exchange, Stake holders and employees of the Company. By Order of the Board For Wallfort Financial Services Limited Ashok Radhakishan Bharadia Managing Director DIN:00407830 Place: Mumbai Date: 29™ May 2015 |