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Transwarranty Finance Ltd.

BSE: 532812 | NSE: TFL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE804H01012 | SECTOR: Finance - General

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Annual Report

For Year :
2017 2015 2014 2013 2012 2011 2010 2009 2008

Director’s Report

Dear Members,

The Directors have pleasure in presenting the 23rd Annual Report on the business and operations of the Company along with the financial statements for the financial year ended 31st March, 2017.

Financial Highlights

The table given below gives the financial highlights of the Company for the year ended 31st March, 2017, as compared to the previous financial year.

(Rs. in Lacs)

Financial Results




Total Income



Total Expenses



Provision for taxation



MAT Credit Entitlement



Deferred tax



Reversal of excess provision



Net profit for the year



Profit available for appropriation




Reserves u/s.45 1C of RBI Act




In order to consolidate the financial position of the Company, the Board has decided to skip the dividend for the financial year ended 31st March, 2017.

Subsidiary Companies:

Vertex Securities Limited(VSL), Vertex Commodities And Finpro Private Limited (VCFPL), Transwarranty Capital Market Services Private Limited (TCMSPL) and Transwarranty Consultants Private Limited (TCPL) are the subsidiaries of the Company.

VSL and VCFPL are engaged in the following businesses:

1. Stock and currency broking services to retail, HNI and institutional clients.

2. Commodity broking services through Vertex Commodities And Finpro Pvt. Ltd (VCFPL) to retail, HNI and corporate clients.

3. Merchant banking.

Vertex Securities Limited (VSL) is a member of: -

1. National Stock Exchange of India Limited (NSE)

2. Bombay Stock Exchange Limited, (BSE)

3. National Securities Depository Ltd., (NSDL) (for depository services)

4. SEBI registration as a Merchant Banker

5. Association of Mutual Funds of India(AMFI) registered Mutual Fund Advisor.

Vertex Commodities And Finpro Private Limited(VCFPL)is amember of following commodity exchanges: -

1. Multi Commodity Exchange of India (MCX)

2. National Commodity and Derivative Exchange (NCDEX)

3. National Multi Commodity Exchange (NMCE)

During the financial year 2016-17, Transwarranty Capital Market Services Pvt. Ltd. (TCMSPL) and Transwarranty Consultants Pvt. Ltd. (TCPL) become the wholly owned subsidiaries of the Company. TCMSPL and TCPL are engaged in the business of financial and management consultancy and advisory services.

During the year ended 31st March, 2017, the subsidiary company, Vertex Securities Limited earned revenue of Rs. 659.35 lakhs as compared to Rs. 523.72 lakhs in the previous year. The operations have recorded a profit of Rs. 39.33 lakhs as compared to a loss of Rs. 61.04 lakhs in the previous year.

The subsidiary company, Vertex Commodities And Finpro Private Limited had total revenue of Rs. 139.78 lakhs and profit of Rs. 9.01 lakhs as on 31st March, 2017 as against the total revenue of Rs. 96.84 lakhs and profit of Rs. 0.33 lakhs respectively in the previous year.

The subsidiary company, Transwarranty Capital Market Services Pvt. Ltd had recorded a loss of Rs. 0.56 lakh as on 31st March, 2017 as against Rs. 0.07 lakh in the previous year and Transwarranty Consultants Pvt. Ltd. had recorded a loss of Rs. 0.11 lakh as on 31st March, 2017.

During the year under report, the consolidated revenue of the Company was Rs. 1983.45 lakhs as against Rs. 1622 lakhs in the previous year. The net profit after tax was Rs. 122.04 lakhs as against net loss of Rs. 46.42 lakhs in the previous year.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the Company''s subsidiaries in Form AOC

1 is attached to the financial statements of the Company.

Management Discussion and Analysis:

A detailed review on the operations and performance of the Company and its business is given in the Management Discussion and Analysis, which forms part of this report as Annexure A.

Corporate Governance Report:

A detailed report on Corporate Governance and Auditors Certificate on compliance with Corporate Governance Requirements by the Company is attached and also forms part of this report as Annexure B.

Consolidated Financial Statements:

Pursuant to Section 136 of the Companies Act, 2013, the standalone financial statements of the Company, consolidated financial statements along with the relevant documents form part of the Annual Report and separate audited accounts in respect of the subsidiaries are available on the website of the Company.

Auditors'' Report

There are no qualifications in the Auditors'' Report for standalone accounts for the financial year ended 31st March 2017. Referring to observations given under Basis for Qualified Opinion in the Independent Auditors Report for Consolidated Accounts, it is clarified that as the Company has initiated legal actions for the recovery of the dues and it will not be prudent to make any provisions as the cases are in various stages in different Courts.

The Statement on Impact of Audit Qualification submitted to the stock exchange pursuant to SEBI Listing Regulations for modified opinion in Audit Report for consolidated accounts is appended to this report as Annexure C.

Directors'' Responsibility Statement:

In terms of Section 134 (3) (c) of the Companies Act, 2013 your Directors state that:

1. In preparation of annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

2. They have 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 as at 31st March, 2017 and profit of the Company for the year ended on that date;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts on a going concern basis;

5. They have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively and

6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.


During the financial year under report the Company has not accepted deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. No amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Particulars of Loans, Guarantees and 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.


In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. U. Ramachandran, Director of the Company (DIN 00493707), retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment and your Board has recommended his re-appointment.

Familiarization Programme for Directors:

At the time of appointment of a Director, a formal letter of appointment is given to the Director. The Director is also explained in detail the role, function, duties and responsibilities expected from him/her and also compliance required from him/her under the Companies Act, 2013, and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015[Listing Regulations]. Further the Managing Director also will have one to one discussion with the newly appointed Director to familiarize with the Company''s operation.

Performance of Board Evaluation

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by SEBI Listing Regulations.

The evaluation was done on various parameters like vision and strategy, Board participation, disclosure of interest, review of risk management policies, leadership skills, good governance, marketing and corporate communications etc.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The board reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.


The details regarding the meeting of the Board of Directors, Committees of the Board and meeting of Independent Directors are provided in the Report on Corporate Governance, which forms part of the Annual Report.

Extract of Annual Return

An extract of Annual return in Form MGT-9 is appended to this report as Annexure D.

Risk Management:

The Company has adopted a Risk Management Policy for the Company including identification therein the elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. After identifying the risk and assessing the level of impact, controls are put in place to mitigate the risk by the concerned executives/the Board to control the exposure of the risk and balance the impact of risk on a continuous basis.

Nomination & Remuneration Policy

The Board on the recommendation of Nomination, Remuneration & Compensation Committee has adopted a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management. The details of this Policy are provided in the Corporate Governance Report.

Sexual Harassment Policy

In line with the requirements of Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (Act), the Company has in place a policy to prevent sexual harassment of women at workplace. Your Directors state that during the year under review, there were no cases filed pursuant to the above Act.

Whistle Blower Policy:

The Company has adopted a Whistle Blower Policy as part of vigil mechanism to provide appropriate avenues to the Directors and Employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business of the Company. The employees are encouraged to voice their concerns by way of whistle blower policy and all the employees have been given access to the Audit Committee. All cases registered under the Code of Business Principles and Whistle Blower Policy will be reported to the Audit Committee.

Employees'' Stock Option Plan 2008 (ESOP):

During the financial year 2016-17, 61,650 equity shares of Rs. 10 each have been vested pursuant to ESOP Scheme. Disclosures as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, and disclosure pursuant to the Rule 12(9) of Companies (Share Capital and Debenture) Rules, 2014 are provided as Annexure E to the Board''s Report.

Independent Directors:

The Independent Directors of the Company have furnished necessary declarations to the Company under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed for independent directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.

During the year under review a meeting of Independent Directors was held on 20.02.2017.

Related Party Transactions:

All related party transactions that were entered into during the year were on arm''s length basis and in the ordinary course of business. The Audit Committee has approved the related party transactions and subsequently the same were approved by the Board of Directors. The disclosures on the Related Party Transactions in Form AOC-2 is provided as Annexure F to the Board''s Report.


Pursuant to the provisions of Section 139 of the Act and the rules framed thereafter, M/s. Rahul Gautam Divan and Associates, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the twenty first annual general meeting (AGM) of the Company held on September 11, 2015 till the conclusion of the twenty fifth AGM to be held in the year 2019, subject to ratification of their appointment at every AGM. The Company has received eligibility certificate in terms of Section 139 of the Companies Act, 2013 and consent from the auditors.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under the Company has appointed Mr. M. P. Sharma, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as part of this Report as Annexure G. The Report does not contain any qualifications, reservations, or adverse remarks.

Energy Conservation, Technology Absorption:

Because of the nature of activities being carried on by the Company, the particulars are not applicable.

Foreign Exchange Earnings and outgo:

Earnings - Nil

Outgo - Rs. 4.33 lakhs

Particulars of Employees and related disclosure:

There are no employees drawing a monthly or yearly remuneration in excess of the limits specified under Section 197 of the Companies Act, 2013 read with Rules 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any amendments thereof.

The information containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,as amended from time to time is attached herewith as Annexure H.


Your Directors acknowledge the support and counsel extended by the bankers, government agencies, shareholders, investors, employees and others associated with the Company. The Directors look forward the same in future also.

For and on behalf of Board of Directors

Place: Mumbai Kumar Nair U. Ramachandran

Date: April 27, 2017 Managing Director Director & CFO

(DIN 00320541) (DIN 00493707)

Director’s Report