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Directors Report of Parnami Credits Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 22nd Annual Report on the business and operations of the Company together with Audited Balance Sheet as at 31st March 2015.

OPERATION AND FINANCIAL RESULTS:

The summary of operation and financial results of the company for the year with comparative figures for last year is as under:

(Amount in Lac)

FINANCIAL RESULTS 2014-15 2013-14

Revenue from operations 55.13 60.32

Other Income 0.28 18.93

Less: Operational & Other expenses 35.51 42.78

Profit/(Loss) before Depreciation 19.90 36.47

Less: Depreciation - 1.07

Less: Finance Cost 3.00 8.83

Less: Exceptional Items - 0.56

Profit/ (Loss) Before Taxation 16.90 26.01

Less: Provision for Tax 6.22 6.00

Less: Prior Year's Income Tax 4.76 -

Net Profit After Tax 5.92 20.01

REVIEW OF OPERATIONS AND FUTURE PROSPECTS:

The Company being a registered NBFC has during the financial year under review has generated revenue of Rs. 55.13 lacs (previous year 60.32 lacs) from operational activity, resulting in net profit of Rs. 5.92 lacs (previous year Rs.20.01/- lacs)

TRANSFER TO RESERVES:

The credit balance of Profit and Loss account is transferred to reserves in Balance sheet.

DIVIDEND:

Your Directors decided to plough back the profit and therefore dividend is not declared.

DIRECTORS:

During the year under review the Board of Directors of the Company, Mr. Naresh Patade (DIN 06706482) is a Whole Time Director and Mr. Tribhawan Kumar Parnami (DIN 01186423) is Managing Director of the Company. The Company had, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, Appointed Ms. Sunita Malhotra (DIN 07001256), Mr. Ishant Malhotra (DIN 06459062) and Mr. Amreesh Kumar (DIN 03069885) as Independent Directors of the Company. Mr. Tribhawan Kumar Parnami (DIN 01186423) is getting retired by rotation and eligible for re-appointment. As per Section 149(4) of the Companies Act, 2013, which came into effect from April 1, 2014, every Listed Public Company is required to have at least one-third of the total number of Directors as Independent Directors. In accordance with the provisions of Section 149 of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges and also in the opinion of the Board of Directors they fulfills the conditions set out in the Act. Brief details of Directors proposed to be appointed / reappointed as required under Clause 49 of the Listing Agreement are provided in the Notice of Annual General Meeting forming part of this Annual Report.

Mr. Raman Kumar Parnami, Mr. Anil Kumar Parnami, Mr. Brajesh Kumar Kataria, Ranjeet Sharma and Kishan Chand Wadhwa have resigned from the Directorship on 14th February 2015.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, during the year under review, the Board carried out the annual evaluation of its own performance. A structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligation and governance was distributed to each member of the Board and inputs were received. The performance evaluation of the Independent Directors who will be appointed at the ensuing Annual General Meeting was carried out by the entire Board. The performance evaluation of Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process

SHARE CAPITAL:

During the year under review, there were no changes in the Capital Structure of the Company. As on 31st March 2015, the paid up capital of the Company was Rs. 3,35,28,000/- comprising of 3352800 Equity Shares of Rs. 10/- each.

CHANGE OF MANAGEMENT/ OPEN OFFER:

During the previous year, current management had transferred their holding of 561000 shares to Mr. Rakeshch and M Jain. In view of this, the open offer was triggered by Mr. Rakeshchand M Jain vide SPA singed on 27.03.2015 between Rakeshchand M Jain and Mr. Anil Kumar Parnami. The open offer process is going on as per the guidelines of Securities and Exchange Board of India (SEBI) (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 to the Equity Shareholders Of the company and accordingly the public announcement were made by Mr. Rakeshchand M Jain on 27.03.2015 to Bombay Stock Exchange as well as to SEBI on 27.03.2015.The detailed public statement was published in the newspapers and the same were forwarded to the respective competent authorities.

The necessary approval for open offer has been received by the merchant banker on 17.07.2015. The open offer was open from 4th August 2015 to 17th August 2015. The necessary formalities were completed by the merchant bankers as well as RTA in this regards.

RBI Approval for open offer

Being a Non-banking finance company (NBFC), since the open offer was triggered, the necessary approval for change of management has been filed and the approval for the same is awaited. The stakeholders of the Company will be informed about the updates in said matter.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on the Management Discussion and Analysis is attached as a separate part of this Annual Report.

CORPORATE GOVERNANCE

Effective corporate governance is necessary to retain the trust of stakeholders and to achieve business success. Corporate governance is about commitment to values and ethical business conduct. It is about how an organization is managed. It includes its corporate and other structures, its culture, policies and the manner in which it deals with various stakeholders. As shareholders across the globe evince keen interest in the practices and performance of companies, corporate governance has emerged at the centre stage of the way the corporate world functions. Corporate governance is vital to enable companies to compete globally in a sustained manner and let them flourish and grow. A separate Report on Corporate Governance is attached and forms part of the Annual Report. The Auditors' Certificate regarding compliance of the conditions of Corporate Governance is also annexed.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement: (i) That in the presentation of the annual accounts for the year ended March 31, 2015, applicable accounting standards have been followed and that there are no material departures; (ii) That they have, in the selection of the accounting policies, consulted the statutory auditors and have 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 for the year ended March 31, 2015 and of the profit of the Company for the year ended on that date; (iii) That they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) That the annual accounts have been prepared on a going concern basis. (v) That internal financial controls followed by the Company are adequate and were operating effectively (vi) That the system to ensure compliance with the provisions of all applicable laws were adequate and operating effectively

RISKS AND MANAGEMENT POLICY

The Company has in October 2014 constituted a Risk Management Committee (RMC) which has been entrusted with responsibility to assist the Board in (a) Overseeing the Company's risk management process and controls, risk tolerance and capital liquidity and funding (b) Setting strategic plans and objectives for risk management and review of risk assessment of the Company (c) Review the Company's risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks (d) The Committee has also approved and adopted Risk Committee (RMC) charter. The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as the Act) and Clause 49 of the Listing Agreement.

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a company's capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a company's operating environment and they emerge on a regular basis. The Company's Risk Management process focusses on ensuring that these risks are identified on a timely basis and addressed.

SUBSIDIARIES COMPANIES:

The Company is having 6 Subsidiaries, namely Parnami Goods Carrier Pvt. Ltd., Signature Finance Private Limited, GLP Habitation Private Limited, Suman Villas Private Limited, M.R. Agrotech Private Limited, V S Developers Private Limited.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH &DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) Energy conservation measures taken : Nil

(b) Additional investments and proposals if any, being implemented for reduction of consumption of energy : Nil

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods : Nil

(d) Total energy consumption and energy consumption per unit of production : Nil

FORM-A: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

A. Power and fuel consumption : Nil

B. Consumption per unit of production : Nil

TECHNOLOGY ABSORPTION

FORM-B: FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION ETC.,

I Research and Development : Nil

II Technology Absorption, Adaptation and Innovation : Nil

FOREIGN EXCHANGE EARNINGS AND OUTGO

I. Earnings in Foreign Exchange during the year : Nil

II. Foreign Exchange outgo during the year : Nil

PARTICULARS OF EMPLOYEES

Particulars of employees as required to be disclosed in terms of Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are made available at the registered office of the Company. The members desirous of obtaining the same may write to the Company Secretary at the registered office of the Company.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Amit R. Dadheech, Company Secretaries, was appointed as Secretarial Auditors of the Company for the financial year 2014-15 Pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure 'B' and forms part of this report.

There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2014-15 which call for any explanation from the Board of Directors

RE-APPOINTMENT OF THE STATUTORY AUDITORS

At the forthcoming Annual General Meeting, M/s. Subramaniam Bengali & Associates., Chartered Accountants who are the Statutory Auditors of the Company, will retire and being eligible, have offered themselves for re-appointment as the Company's Auditors. The Company has received certificate and confirming that their re-appointment for the year 2015-16, if made at the ensuing Annual General Meeting of the Company will be appointed upto the 28th Annual General meeting will be held in the calendar year 2019 in accordance with the provisions of the Companies Act, 2013 and as per the term prescribed under the said act.

DEPOSITS

During the period under review, your Company has not accepted or invited any deposits from public.

INSURANCE

The Company has taken insurance cover for its assets to the extent required.

SIGNIFICANT / MATERIAL ORDERS PASSED IMPACTING ON GOING CONCERN STATUS AND COMPANY'S OPERATIONS

There have been no significant and material orders passed by any regulators or courts or tribunals impacting the going concern status and company's operations in future.

RELATED PARTIES TRANSACTIONS

All the transactions with related parties are in the ordinary course of business and on arm's length basis. The details of the transactions entered into between the Company and the related parties are given in AOC-2 attached as Annexure 'C' as part note No. 2(21)(iii) of the standalone financial account.

Your attention is drawn to the Related Party disclosures set out in Note no.2 (21) of the Standalone Financial Statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not made any transactions so there are not particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

BOARD MEETINGS

During the financial year 2014-2015, the Board of Directors met 7 times. The gap between any two meetings has been less than four months.

Details of the Board of Directors and Attendance Record of Directors during the financial year ended March 31, 2015 is as under:

Name of director No.of meetings No.of meetings Last AGM held Attended Attended

Mr. T.K Parnami 7 7 Yes

Mr.Naresh Patade Vasant 7 3 No

Mr.Raman Kumar Parnami * 7 1 Yes

Mr. Anil Kumar Parnami * 7 5 Yes

Mr. Brajesh Kumar Kataria * 7 6 Yes

Mr. Kishan chand wadhwa * 7 2 Yes

Mr. Ranjet P. Sharma * 6 Nil No

MR. Anil Khanna 6 6 Yes

Mr.Amreesh Kumar ** 6 3 No

Mr.Ishant Malhotra ** 6 3 No

Mrs.Sunita Malhotra *** 6 Nil No

EXTRACT OF THE ANNUAL RETURN

An extract of the Annual Return for the year ended March 31,2015 as provided under sub-section (3) of Section 92 and prescribed under Rule 12 of Companies (Management & Administration) Rules, 2014 in the prescribed form MGT-9 is attached as Annexure 'A' and forms part of this report.

BOARD COMMITTEES

The Company has the following Committees of the Board:

* Audit Committee

* Stakeholders Relationship Committee

* Nomination & Remuneration Committee

* Risk Management Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In 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.parnamicredits.in under investors/policy documents/Vigil Mechanism Policy link.

INTERNAL FINANCIAL CONTROL

The Company believes that internal control is a necessary concomitant of the principle of prudent business governance that freedom of management should be exercised within a framework of appropriate checks and balances. The Company remains committed to ensuring an effective internal control environment that inter alia provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Company's independent and Internal Audit processes, both at the Business and Corporate levels, provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements.

The Financial Statements of the Company are prepared on the basis of the Significant Accounting Policies that are carefully selected by management and approved by the Board. These, in turn are supported by a set of divisional Delegation Manual & Standard Operating Procedures (SOPs) that have been established for individual units/ areas of operations.

The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless the Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

RISK & MITIGATION

The Company has identified various risks faced by the Company from different areas. As per the provision of the Companies Act, 2013 and listing agreements, the, the Board had adopted a risks management policy whereby a proper framework is set up. Appropriate structures are present so that risks are inherently monitored and controlled. A combination of policies and procedures attempts to counter risks as and when they evolve.

COST AUDITORS

As the Company is operating in the service industry, cost audit is not applicable to the Company and hence no reporting is required.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013"the Company has in place a formal policy for prevention of sexual harassment of its women employees.

The following is the summary of sexual harassment complaints received and disposed off during the current financial year.

Number of Complaints received : NIL

Number of Complaints disposed off : NIL

INDUSTRIAL RELATIONS:

The company maintained healthy, cordial and harmonious industrial relations at all levels the enthusiasm and unstinting efforts of employees have enabled the company to remain at the leadership position in the industry it has taken various steps to improve productivity across organization.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

Mr. T.K.Parnami Chairman & Managing Director, Compliance Officer

Mr. Mr. Naresh Patade Vasant Whole time Director

ACKNOWLEDGEMENT

Your Directors wish to acknowledge all their stakeholders and are grateful for the excellent support received from the shareholders, Bankers, Financial Institutions, Government authorities, esteemed corporate clients, customers and other business associates. Your Directors recognize and appreciate the hard work and efforts put in by all the employees of the Company and their contribution to the growth of the Company in a very challenging environment.

By Order and on behalf of the board

Sd/- T. K. Parnami DIN : 01186423 Chairman & Managing Director Place: Gurgaon Dated: 03rd September, 2015

Registered Office:

Parnami Tower 2nd Floor, Sco 50-51 Old Judicial Complex Civil Lines, Gurgaon, Haryana - 122 001





 
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