Baid Leasing and Finance Co. Ltd.
The Board of Directors are pleased to present the 29th Annual Report of yourCompany together with the audited annual financial statements for the financial year2019-2020.
1. COMPANY'S PERFORMANCE
The Company's financial highlights for the financial year ended on 31stMarch 2020 are summarized below:-
| || ||(Amount in Rs.) |
|Particulars ||F.Y. 2019-20 ||F.Y. 2018-19 |
|Total Revenue ||627853268/- ||583937247/- |
|Less: Total Expenditure ||524257896/- ||456795160/- |
|Profit / (Loss) before Taxation ||103595372/- ||127142086/- |
|Tax expenses ||27522702/- ||30022254/- |
|Profit / (Loss) after Tax ||76072671 /- ||97119832/- |
2. PERFORMANCE REVIEW AND STATE OF COMPANY'S AFFAIRS
The Company is mainly engaged in the business of Vehicle Finance Asset Finance andproviding loan against property.
Total Income during the year under review were Rs. 627853268/- as against Rs.583937247/-in the previous year. The profit/ (Loss) before tax is Rs. 103595372/- asagainst Rs. 127142086/-in the previous year. The profit/ (Loss) after tax is Rs.76072671/- as against Rs. 97119832/-in the previous year.
The Company has recorded a growth in revenue of 7.52% during the year under review.
The asset size of Company during the year under review were Rs. 2679549262.64/- asagainst Rs. 2827724000 in the previous year. The performance from both the sectors areas follows:
|F.Y ||Particulars ||Vehicle ||Loan against property |
|2019-20 ||Asset Under Management ||Rs. 402707436.64/- ||Rs. 2276841826/- |
|2018-19 || ||Rs. 417154000/- ||Rs. 2410570000/- |
The improvement in the revenues is a result of the aggressive marketing and robustcollections. The Company endeavors to continue the tremendous growth rate.
Your Directors feel that it is prudent to plough back the profits for future growth ofthe Company and do not recommend any dividend for the financial year ended on 31st March2020.
4. CHANGES IN CAPITAL STRUCTURE
With respect to amalgamation of Jaisukh Developers Private Limited ("TransferorCompany-1") Skyview Tie up Private Limited ("Transferor Company-2") withthe Baid Leasing and Finance Co. Ltd. ("Transferee Company") the transfereeCompany on September 10 2019 allotted 1906830 (Nineteen Lakh Six Thousand Eight Hundredand Thirty)equity shares to the shareholders of Transferor Companies pursuant to orderdated August 21 2019 passed by the Hon'ble National Company Law TribunalJaipur("NCLT")thereby increasing the paid up share capital of the Company to Rs.120068300/- (Rupees Twelve Crores Sixty Eight Thousand and Three Hundred Only) from101000000/- (Rupees Ten Crores Ten Lakhs Only). The authorized share capital of theCompany increased from Rs. 120000000/- (Rupees Twelve Crores Only) to Rs.177900000/-(Rupees Seventeen Crores Seventy Nine Lakhs Only).
5. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY/CHANGEIN THE NATURE OF THE BUSINESS
With the evolving and aggravating impact of the Covid-19 pandemic and subsequentlockdowns imposed there has been a reduction in the cash flow of Company in the firstquarter of the Financial Year 2020-21. The Company is continuously endeavoring to dealwith the situation and boost collections by means of incentivizing customers to makeregular payments. However the extent of impact is difficult to crystallize.
Save and except the affect of the above there have been no material changes andcommitment affecting financial position of the Company/change in the nature of thebusiness.
6. SCHEME OF ARRANGEMENTS/ UPDATE ON AMALGAMTION
During the year the Hon'ble National Company Law Tribunal ofJaipur("NCLT") has approved the Scheme of Arrangement among Jaisukh DevelopersPrivate Limited ("Transferor Company-1") Skyview Tie up Private Limited("Transferor Company-2") with the Baid Leasing and Finance Co. Ltd.("Transferee Company")and their respective members and Creditors vide theirorder dated August 21 2019.
The certified copy of the Order of the Hon'ble NCLT sanctioning the scheme fromApril 01 2016 being the appointed date has been filed electronically by TransferorCompany-1 Transferor Company-2 and Transferee Company with the Registrar of Companies onAugust 28 2019.
Pursuant to order dated August 21 2019 passed by the Hon'ble NCLT and inaccordance with the Scheme of Amalgamation amongst Transferor Company-1 and TransferorCompany-2 with Transferee Company under section 230 to 232 and other applicable provisionsof the Companies Act 2013 ("Act")approved by the said order the Board allotted1906830 (Nineteen Lakh Six Thousand Eight Hundred and Thirty)equity shares of theCompany to the shareholders of
Transferor Companies in consonance with the share exchange ratio as follows:
Transferor Company 1:-i.e. 10:21 i.e. for every twenty one shares of (TransferorCompany1)of Rs. 10/- ten shares of transferee Company of Rs. 10/- each and
Transferor Company 2-10:192 for every one hundred ninety two shares of (TransferorCompany2) of Rs. 1/- ten shares of transferee Company of Rs. 10/- each.
7. EXTRACT OF ANNUAL RETURN
Pursuant to section 134 (3) (a) and section 92 (3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 as amended an extract of AnnualReturn as on March 31 2020 in form MGT-9 has been prepared and enclosed as AnnexureI which forms part of this report.
8. TRANSFER TO RESERVES
Reserves and Surplus Account as at March 31 2020 of your Company increased by 202.71 %to Rs. 1180176149/-as against Rs. 389876523/- in the previous financial year. YourCompany has transferred Rs. 15214535/- to Special Reserve in compliance with theprovisioning norms of the RBI.
The Board transferred Rs. 19836314/- to the General Reserve for the period underreview.
9. TRANSFER TO GENERAL PROVISION ON STANDARD ASSETS
Your Company has transferred following amount to General provision on standard assetsin compliance with the provisioning norms of Reserve Bank Of India and RBI circularRBI/2019-20/220 DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17 2020):-
Rs. 1301270/- @ 5% on total outstanding of accounts in default but standardfor the year ended March 31 2020.
10.ASSOCIATE COMPANIES JOINT VENTURE AND SUBSIDIARY COMPANIES
During the year under review there was no associate Joint Venture and subsidiaryCompany.
11.DIRECTORS/ KEY MANAGERIAL PERSONNEL APPOINTMENT/ RE-APPOINTMENT/ CESSATION
In accordance with the provisions of the Act and the rules made there under andthe Articles of Association of the Company Mrs. Alpana Baid Director of the Company isliable to retire by rotation at the ensuing Annual General Meeting and being eligible hasoffered herself for re-appointment.
On the basis of report of performance evaluation done by Nomination andRemuneration Committee and Board of Directors of the Company and after considering theirintegrity expertise and experience Mr. Monu Jain and Mr. Mudit Singh have beenre-appointed as Independent Directors of the Company for a term of 5 (five) years each upto March 31 2024 respectively by the members at the 28th Annual General Meeting of theCompany held on September 30 2019.
Mr. Aman Baid retired by rotation and was reappointed in the previous AGM heldon September 30 2019.
Mr. Panna Lal Baid was appointed as Chairman and Managing Director for a periodof 3 years with effect from April 1 2018 and his present term is concluding on March 312021 Mr. Aman Baid was appointed as Executive Director for a period of 3 years with effectfrom June 1 2017 and his present term is concluding on May 31 2020. Mr. Panna Lal Baidand Mr. Aman Baid are key contributors in overall Management of the Company. Their vastexperience and association would be of immense benefit to the Company and it is desirableto continue to avail their services. Your Board believes their re- appointment willbenefit the Company.
After evaluating the eligibility criteria under the Act and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred as "ListingRegulations") your Board recommends re-appointment of Mr. Panna Lal Baid as Chairmanand Managing Director and Mr. Aman Baid as Whole Time Director designated as ExecutiveDirector of the Company for a further period of 3 years each.
Detailed profile of the above Directors pursuant to Schedule V to the Companies Act2013 Regulation 36(3) of Listing Regulations and relevant provisions of SecretarialStandard on General Meetings is furnished as Annexure 1 and 2 to the notice calling AnnualGeneral Meeting of members of the Company.
During the financial year 2019-20 there was no change in the structure of theKey Managerial Personnel.
12.DECLARATION OF INDEPENDENCE BY DIRECTORS
The Company has received necessary declaration from each of the Independent Directorsof the Company that they meet the criteria of independence as provided under section149(6) of the Act and Regulation 16 (b) and 25 of Listing Regulations in respect of theirposition as an "Independent Director" of Baid Leasing and Finance Co. Ltd.
In the opinion of the Board the Independent Directors of the Company fulfill theconditions specified in the Act and Listing Regulations and have complied with the Codefor Independent Directors prescribed in Schedule IV to the Act and are independent of themanagement.
Further pursuant to the provisions of The Companies (Creation and Maintenance ofDatabank of Independent Directors) Rules 2019 the Independent Directors have registeredwith the Databank maintained under Indian Institute of Corporate Affairs (IICA).
13.REMUNERATION POLICY FOR DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES ANDCRITERIA FOR APPOINTMENT OF DIRECTORS
For the purpose of selection of any Director the Nomination and Remuneration Committeeidentifies persons of integrity who possess relevant expertise experience and leadershipqualities required for the position. The Committee also ensures that the incumbent fulfilssuch criteria with regard to qualifications positive attributes independence age andother criteria as laid down under the Act Listing Regulations or other applicable laws.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy on appointment and remuneration of Directors Key Managerial Personnel andSenior Managerial Personnel including criteria for determining qualifications positiveattributes independence of a Director and other matters as mandated under Section 178(3)/(4) of the Act and Regulation 19 read with Part D of Schedule II of the ListingRegulations.
The Nomination and Remuneration Policy approved by the Board is available on thewebsite of the Company the same can be accessed athttps://www.balfc.com/wp-content/uploads/2018/09/Nomination-and-Remuneration-Policy.pdf
The salient aspects covered in the Nomination and Remuneration Policy have beenoutlined below:
a) To review the structure size and composition (including the skills knowledge andexperience) of the Board at least annually and making recommendations on any proposedchanges to the Board to complement the Company's corporate strategy with the objective todiversify the Board;
(b) To identify individuals suitably qualified to be appointed as the KMPs or in thesenior management of the Company;
(c) To recommend to the Board on the selection of individuals nominated forDirectorship;
(d) To make recommendations to the Board on the remuneration payable to the Directors /KMPs /Senior Officials so appointed /reappointed;
(e) To assess the independence of independent Directors;
(f) such other key issues/matters as may be referred by the Board or as may benecessary in view of the regulations and provision of the Act and Rules thereunder.
(g) To make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract;
(h) To ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks;
(i) Performance Evaluation of every Director Key Managerial Personnel and SeniorManagement Personnel.
14.FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of Regulation 25(7) of the Listing Regulations theCompany has put in place a Familiarisation Programme for the Independent Directors tofamiliarise them with the Company their roles rights responsibilities in the Companynature of the industry in which the Company operates business model etc. The details ofthe Familiarisation Programme conducted are available on the website of the Companywww.balfc. com and can be accessed through the web link:https://www.balfc.com/wp-content/uploads/2020/07/DETAILS-OF-FAMILIARISATION-PROGRAMME-IMPARTED-TO-INDEPENDENT-DIRECTORS-DURING-THE-YEAR-2019-20.pdf
15. NUMBER OF MEETINGS OF BOARD OF DIRECTORS
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies and other matters.
The Board of Directors of the Company met 8 (Eight) times during the year under reviewonMay30 2019 July18 2019 August13 2019 August 30 2019 September 10 2019 November14 2019 February 13 2020 and March 31 2020. The intervening gap between the meetingswas within the period prescribed under the Act Secretarial Standard-1 (SS-1)and thelisting regulations.
The details of Board and committee meetings held during the financial year ended on31st March 2020 and attendance thereto are set out in the Corporate Governance Reportenclosed as Annexure VI which forms part of this report.
16.EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Performance evaluation is becoming increasingly important for Board and Directors andhas benefits for individual Directors Board and the Companies for which they work. TheSecurities and Exchange Board of India has issued a Guidance Note on Board Evaluation andpursuant to the provisions of the act the Board of Directors has carried out an annualperformance evaluation of its own performance Board Committees and individual Directors.
The Chairman of the Company interacted with each Director individually for evaluationof performance of the individual Directors. The evaluation for the performance of theBoard as a whole and individual and of the Committees were conducted by way ofquestionnaires.
In a separate meeting of Independent Directors performance of Non IndependentDirectors and performance of the Board as a whole was evaluated. Further they alsoevaluated the performance of the Chairman of the Company taking into account the views ofthe Executive Directors and Non-executive Directors.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of various criteria such as structure and diversity of theBoard competency of Directors experience of Director strategy and performanceevaluation secretarial support evaluation of risk evaluation of performance of themanagement and feedback independence of the management from the Board etc.
The performance of the Committees was evaluated by the Board on the basis of criteriasuch as mandate and composition effectiveness of the committee structure of thecommittee and meetings independence of the committee from the Board and contribution todecisions of the Board.
The Nomination and Remuneration Committee reviewed the performance of the individualDirectors on the basis of the criteria such as qualification experience knowledge andcompetency fulfilment of functions availability and attendance initiative integritycontribution and commitment etc. and the Independent Directors were additionallyevaluated on the basis of independence independent views and judgement etc.
The performance of the Individual Directors was evaluated by the Board on the basis ofcriteria such as ethical standards governance skills professional obligations personalattributes etc.
Further the evaluation of Chairman of the Board in addition to the above criteria forindividual Directors also included evaluation based on effectiveness of leadership andability to steer the meetings impartiality etc.
The Chairman and other members of the Board discussed upon the performance evaluationof every Director of the Company and concluded that they were satisfied with the overallperformance of the Directors individually and that the Directors generally met theirexpectations of performance.
The Board discussed upon the performance evaluation of every Director of the Companyand concluded that they were satisfied with the overall performance of the Directorsindividually and that the Directors generally met their expectations of performance.
The summary of the feedback from the members were thereafter discussed in detail by themembers. The respective Director who was being evaluated did not participate in thediscussion on his/her performance evaluation.
The Chairman additionally interacted with each Director individually for evaluation ofperformance of all Individual Directors and were satisfied with the overall performance ofthe Directors individually and that the Directors generally met their expectations ofperformance.
The Directors expressed their satisfaction with the evaluation process.
17.DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013 AND INTERNAL COMPLAINT COMMITTEE (ICC)
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in its premises through various interventions and practices. TheCompany always endeavors to create and provide an environment to all its employees that isfree from discrimination and harassment including sexual harassment.
The Company has a policy for prevention of sexual harassment in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013 (POSH Act). The Company has complied with the provisions relatingto constitution of internal complaints committee (ICC) under the POSH Act. ICC has beenset up to redress complaints received regarding sexual harassment. All employees arecovered under this policy.
The complaints received and the details relating thereto were as follows for the periodunder review:
|Particulars ||Nos. |
|No. of Complaints Pending at the Beginning of the Year ||0 |
|No. of Complaints Received and Resolved during the year ||0 |
|No. of Complaints Pending at the End of the Year ||0 |
18.AUDITORS & AUDITOR'S REPORT
- Statutory Auditors & Audit Report
M/s. Khilnani & Associates Chartered Accountants (Firm Registration No. 005776C)were appointed in the 24th Annual General Meeting (AGM) of the Company held on July 182015 for a period of 5 years i.e from conclusion of 24th AGM till the conclusion of 29thAGM and accordingly the current term will expire at the conclusion of the ensuing AGM.
M/s. Khilnani & Associates have confirmed their eligibility and willingness toaccept the reappointment. The Company has received letter dated May 22 2020 from M/s.Khilnani & Associates Chartered Accountants to the effect that their appointment ifmade would be within the prescribed limits under Section 139 of the Act and they are notdisqualified for appointment within the meaning of Section 141 of the said Act.Accordingly M/s. Khilnani & Associates on the recommendation of the Board of Directorsis proposed to be re-appointed from the conclusion of this Annual General Meeting untilthe conclusion of the 34th Annual General Meeting.
The Financial Statements and the Auditor's Report for the financial year ended on 31stMarch 2020 are free from any qualification reservation and adverse remark; further thenotes on accounts are self-explanatory. The Auditors' Report is enclosed with thefinancial statements in this annual report.
- Secretarial Auditor & Secretarial Audit Report
As per Section 204 of the Act read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 every Listed Company is required to appoint aSecretarial Auditor to carry out Secretarial Audit of the Company.
In consonance with the aforementioned requirement M/s V. M. & Associates CompanySecretaries(Firm Reg. No. P1984RJ039200) were appointed as secretarial auditors to conductthe secretarial audit of the Company for the financial year 2019-20.
Secretarial Audit Report as issued by M/s V. M. & Associates Company Secretariesin respect of the secretarial audit of the Company in Form MR-3 for the financial yearended on 31st March 2020 is given in Annexure II to this Report.
The Secretarial Audit report for the financial year ended on 31st March 2020 statesthat during the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. except expenses on CSR activitiesbelow the prescribed limit.
The Board responded on the observation that due to the non availability of suitable CSRactivities the Company had spend below the prescribed limit. The Company believes ingiving back to the society and appropriate expenses under CSR will be an honest endeavor.
M/s. V. M. & Associates Company Secretaries (Firm Registration No.P1984RJ039200)have confirmed their eligibility and willingness to accept the appointment.The Company has received consent/eligibility certificates etc. dated May 16 2020 from M/sV. M. & Associates Company Secretaries. AccordinglyBoard in its meeting held on June30 2020 has re-appointed M/s V. M. & Associates Company Secretaries Jaipur asSecretarial Auditor(Firm Reg No. P1984RJ039200) of the Company to carry out secretarialaudit of the Company for the financial year 2020-21.
- Internal Auditor
Pursuant to Section 138 of Act read with Companies (Audit and Auditors) Rules 2014every Listed Company is required to appoint an Internal Auditor or a firm of InternalAuditors to carry out Internal Audit of the Company.
In consonance with the aforementioned requirementsM/s Shiv Shankar Khandelwal&Co.(Firm Registration No. 006852C) Chartered Accountants were appointed as InternalAuditors to conduct the Internal Audit of the Company for the financial year 2019-20.
The Internal Audit Report is received yearly by the Company and the same is reviewedand taken on record by the Audit Committee and Board of Directors. The yearly InternalAudit Report as received for the financial Year 2019-20 is free from any qualification.
M/s. Shiv Shankar Khandelwal & Co. Chartered Accountants (Firm Registration No.006852C)have confirmed their eligibility and willingness to accept the appointment. TheCompany has received consent/eligibility certificates etc. dated May 05 2020 from M/s.Shiv Shankar Khandelwal & Co. Chartered Accountants. Accordingly Board in itsmeeting held on June 30 2020 has re-appointed M/s Shiv Shankar Khandelwal & Co.Chartered Accountants Jaipur (Firm Reg. No. 006852C)as the Internal Auditor of theCompany for the financial year 2020-21.
- REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the statutory auditor nor the secretarial auditorhas reported to the audit committee under Section 143 (12) of the Act any instances offraud committed against the Company by its officers or employees.
19.LOANS GUARANTEES AND INVESTMENTS IN SECURITIES BY THE COMPANY
Pursuant to Section 186(11) of the Act loans made guarantees given or securitiesprovided or acquisition of securities by a Non Banking Financial Company(NBFC) registeredwith Reserve Bank of India (RBI) in the ordinary course of its business are exempted fromthe applicability of Provisions of Section 186 of the Act. As such the particulars ofloans and guarantee have not been disclosed in this Report. However the same are mentionedin the Note no. 3 and 4 in audited financial statements for the financial year ended onMarch 31 2020.
20.RELATED PARTY TRANSACTIONS
During the year all the related party transactions were in accordance with Section 188of the Act Regulation 23 of Listing Regulations and IND AS-24 and are disclosed underNote No. 3.10 of the Notes to Standalone Financial Statements for the year ended March 312020. The transactions were in the ordinary course of business and on arm's length basisand there were no transactions requiring approval of the Shareholders. However priorapproval of the Audit Committee was sought for entering into the Related PartyTransactions as required under the Act read with rules made thereunder and Regulation 23(2) of Listing Regulations.
Further there are no materially significant related party transactions during the yearunder review made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large. Thus disclosure in Form AOC-2 is not required.
The Company has adopted a policy on materiality of related party transactions indealing with Related Party Transactions and the same is disclosed on the website of theCompany and can be accessed athttps://www.balfc.com/wp-content/uploads/2018/09/POLICY-ON-MATERIALITY-OF-RPT.pdf
The Company has developed and implemented a risk management policy which encompassespractices relating to identification assessment monitoring and mitigation of variousrisks to key business objectives. The Risk management framework of the Company seeks tominimize adverse impact of risks on our key business objectives and enables the Company toleverage market opportunities effectively.
The various key risks to key business objectives are as follows:
Liquidity Risk: It is the risk that the Company will be unable to meet its financialcommitment to a Bank/ Financial Institution in any location any currency at any point intime. Liquidity risk can manifest in three different dimensions for the Company.
Funding Risk: To replace net outflows due to unanticipated outflows.
Time Risk: To compensate for non receipt of expected inflows of funds.
Call Risk: Due to crystallization of contingent liabilities or inability to undertakeprofitable business opportunities when desirable.
Interest Rate Risk: It is the risk where changes in market interest rates mightadversely affect the Company's financial condition. The short term/immediate impact ofchanges in interest rates are on the Company's Net Interest Income (NII). On a longerterm changes in interest rates impact the cash flows on the assets liabilities andoff-balance sheet items giving rise to a risk to the net worth of the Company arising outof all re-pricing mismatches and other interest rate sensitive positions.
The Company's Risk Management Policy is put up on the Company's website and can beaccessed at https://www.balfc.com/wp-content/uploads/2018/09/Risk-Management-Policy.pdf
22.INTERNAL FINANCIAL CONTROL SYSTEMS
The Company believes that internal control is a necessary prerequisite of Governanceand that freedom should be exercised within a framework of checks and balances.The Companyhas a well-established internal control framework which is designed to continuouslyassess the adequacy effectiveness and efficiency of financial and operational controls.The management is committed to ensure an effective internal control environmentcommensurate with the size and complexity of the business which provides an assurance oncompliance with internal policies applicable laws regulations and protection ofresources and assets.The Audit Committee reviews adherence to internal control systems andinternal audit reports.
23.DETAILS RELATING TO DEPOSITS
The Company has not accepted any deposit within the meaning of the Companies(Acceptance of Deposits) Rules 2014 or Chapter V of the Act and guidelines and directionsof Non-Banking Financial Companies (Acceptance of Public Deposits)(Reserve Bank)Directions 2016 as prescribed by Reserve Bank of India in this regard and as such nodetails are required to be furnished.
Further the Company has taken unsecured loans from the Directors of the Companydetails of the same are part of notes on accounts in the Annual Report.
24.MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review pursuant toRegulation 34 of Listing Regulations is annexed herewith as Annexure V forming part ofthe Annual Report.
25.CORPORATE GOVERNANCE REPORT
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI"). The Company has also implemented several bestgovernance practices. The report on Corporate Governance for the financial year ended onMarch 31 2020 along with Certificate issued by the M/s V.M. & Associates CompanySecretaries confirming the compliance to applicable requirements related to corporategovernance as stipulated under Schedule V of the Listing Regulations forms part of thisAnnual Report as Annexure VI.
26.CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Particulars with respect of conservation of energy technology absorption foreignexchange earnings and outgo:
The information required under Section 134(3) (m) of the Act read with the Companies(Accounts) Rules 2014 relating to the conservation of energy and technology absorptionforeign exchange earnings and outgo are given below:
(a) Conservation of energy:
|I the steps taken or impact on conservation of energy || The Company is providing financial services which require normal consumption of electricity. However the Company is making necessary efforts to reduce the consumption of energy. |
| || The office of the Company has been using LED bulbs that consume less electricity as compared to CFL and incandescent bulbs. The Company has increased the usage of low electricity consuming monitors in place of conventional monitors. The Company has started buying the new energy efficient computers that automatically goes into low power sleep' mode or off- mode when not in use. As a part of Green Initiative a lot of paper work at Registered Office has been reduced by increased usage of technology. |
|II the steps taken by the Company for utilizing alternate sources of energy ||NIL |
|III the capital investment on energy conservation equipment ||NIL |
(b) Technology absorption:
|I the efforts made towards technology absorption ||Your Company being a Non-Banking Finance Company its activities do not require adoption of any specific technology. However your Company has been in the forefront in implementing latest information technologies & tools towards enhancing our customer convenience and continues to adopt and use the latest technologies to improve the productivity and quality of its services. The Company's operations do not require significant import of technology. |
|II The benefits derived like product improvement cost reduction product development or import substitution ||N.A. |
|III Technology Imported during the last three years || |
|(a) The details of technology imported ||N.A. |
|(b) The year of import ||N.A. |
|(c) Whether the technology been fully absorbed ||N.A. |
|(d) If not fully absorbed areas where absorption has not taken place and the reasons thereof ||N.A. |
|IV The expenditure incurred on Research and Development ||Company has not incurred any expenditure on research and development during the year under review. |
(c) Foreign exchange earnings and Outgo:
Foreign exchange earnings and outgo is reported to be NIL during the financial yearunder review.
27.CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Board of Directors haveconstituted a Corporate Social Responsibility (CSR) Committee. The details of membershipof the Committee and the meetings held are detailed in the Corporate Governance Reportforming part of this Report.
The Company was obligated to spend approximately an amount of :-
(i) Rs. 1653716/- (Rupees Sixteen Lakhs Fifty Three Thousand Seven Hundred SixteenOnly)being 2% of the average net profit before tax of the three immediately precedingfinancial years towards CSR activities during the financial year2019-2020 and.
(II) Rs. 1134679/-(Rupees Eleven Lakhs Thirty Four Thousand Six Hundred SeventyNine Only)Unspent budget of previous Financial Year 2018-19 due to unavailability ofsuitable CSR activity.
As such the Company has contributed a sum of. Rs. 1341400/- ( Rupees Thirteen LakhsForty One Thousand Four Hundred Only) with regard to CSR activities for the Financial year2019-20 (including Rs. 1134679/- which was the shortfall for the Financial Year2018-19).
The Company is very selective in identifying the appropriate areas for spending therequired CSR amount and made its best efforts to spend the entire amount of CSR but due tonon availability of suitable CSR activities only an amount of Rs. 1341400/- ( RupeesThirteen Lakhs Forty One Thousand Four Hundred Only) was spent during the year and Rs.1446995/-(Rupees Fourteen Lakhs Forty Six Thousand Nine Hundred Ninety Five Only)remained unspent out of Rs. 2788395.85/- (Rupees Twenty Seven Lakhs Eighty EightThousand Three Hundred Ninety Five Only).The balance will be carried over to the next yearand the Company will; endeavor to spend the full amount with respect to CSR in the comingyear.
The Annual Report on CSR activities is annexed herewith as Annexure III to this report.
The CSR Policy approved by the Board is available on the website of the Company thesame can be accessed athttps://www.balfc.com/wp-content/uploads/2018/09/Corporate-Social-Responsibility-Policy-1.pdf.
28.SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant and material orders passed by the Regulators or Courts orTribunals during the year impacting the going concern status and the operations of theCompany in future pursuant to Rule 8 (5) (vii) of the Companies(Accounts) Rules 2014 .
In line with the provisions of Listing Regulations the Act and the principles of goodgovernance the Company has devised and implemented a vigil mechanism in the form of'Whistle-Blower Policy'. Detailed information on the Vigil Mechanism of the Company isprovided in the Report on the Corporate Governance which forms part of the Annual Report.
Previously the Company was assigned BBB- Rating by CARE ratings thereafter BrickworkRatings vide its letter dated August 20 2019 has upgraded the credit rating of theCompany in respect of bank facilities as given below:
|Facility Fund Based ||Rating Agency Brickwork Ratings ||Rating BBB ||Outlook Stable |
Few major reasons for upgrade in rating as mentioned in the rating letter were asfollows:
recent developments including operational and financial performance of theCompany
the possible impact on the credit profile of the Company on the account ofamalgamation of Jaisukh Developers Private Limited and Skyview Tie Up Private Limited withthe Company
the domain knowledge of the management team steady improvement in the overallfinancials over the period of last three years
comfortable liquidity position comfortable capital adequacy and good assetquality.
31.DISCLOSURE ON SECRETARIAL STANDARDS BY DIRECTORS:
The Directors state that applicable Secretarial Standards i.e. SS-1 andSS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company and they have devised proper systems to ensurecompliance with the provisions of all applicable Secretarial Standards and that suchsystems are adequate and operating effectively.
The Company has complied with all the provisions of Master Direction - Non-BankingFinancial Company Non-Systemically Important Non-Deposit taking Company (ReserveBank) Directions 2016 and other directions guidelines rules regulations etc. as issuedby the Reserve Bank of India from time to time.
33.COMMITTEE OF DIRECTORS
The Board has constituted seven Committees viz. Audit Committee Nomination andRemuneration Committee Stakeholders' Relationship Committee Corporate SocialResponsibility Committee Risk Management Committee Asset Liability Management Committeeand Executive Committee. Other details are laid down in the Corporate Governance segmentof this Annual Report.
34.PARTICULARS OF REMUNERATION OF DIRECTORS KMPs AND EMPLOYEES
(A) During the year under review none of the Director/KMP/employee of the Company wasin receipt of the remuneration exceeding the limits prescribed u/s 197 (12) read with rule5 sub-rule 2 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 of the Act .Following is the list of the top ten employees of the Company interms of remuneration drawn:
Amount in Rs.)
|S. No . Inform ation require d as per Rule 5(2) ||1 ||2 ||3 ||4 ||5 ||6 ||7 ||8 ||9 ||10 |
|i) Name ||Mr. Panna Lal Baid ||Mr. Aman Baid ||Mr. Aditya Baid ||Ms. Namra ta Sajna ni ||Mr. Bal Krisha n Sharm a ||Mr. Rajen dra Singh Deval ||Mr. Ashok Kumar Saini ||Mr. Pawan Jalundr iya ||Mr. Narp at Singh Khan garot ||Mr. Bhim Singh Shekha wat |
|ii) Designa tion of the Employe e ||Chairma n and Managin g Director ||Execut ive Direct or ||Chief Financ ial Officer after Febru ary 07 2018 ||Comp any Secret ary ||Legal Head ||State sales Head ||Area Manag er ||Assista nt Accoun ts Manag er ||Coll ecti on Man age r ||Assistant Accounts Manager |
|iii) Remune ration received for the year ||36000 00/- ||2400 000/- ||2100 000/- ||1054 379/- ||8086 87/- ||6983 21/- ||5494 07/- ||4278 88/- ||377 916 ||346325/- |
|iv) Nature of employ ment whether contract ual or otherwis e ||Contract ual Relation ship ||Contra ctual Relati onship ||Other ||Other ||Other ||Other ||Other ||Other ||Other ||Other |
|v) Qualifica tion and experie nce of the Employe e ||Under Graduat e and experie nce of 29 years ||Bachel ors in Hotel Manag ement and experi ence of 7 years ||Post Gradu ate and experi ence of 5 years ||Comp any Secret ary & LLB and experi ence of 7 years ||LLB & BLL and experi ence of 12 years ||Gradu ate (BSC) and experi ence of 14 years ||Gradu ate (BA) and experi ence of 11 years ||Post Gradua te and experie nce of 7 years ||Grad uate and exper ience of more than 3 years ||Post Graduate and experienc e of more than 3 years |
|vi) Date of commen cement of employ ment ||20.12.1 991 ||24.05. 2014 ||16.05. 2015 ||12.10. 2013 ||10.02. 2016 ||07.05. 2018 ||13.10. 2017 ||01.08. 2015 ||28.12 .2016 ||02.01.2017 |
|vii) Age ||77 ||28 ||28 ||29 ||44 ||37 ||37 ||26 ||30 ||30 |
|viii ) Last employ ment held before joining the Compan y ||NIL ||NIL ||NIL ||NIL ||Shree Ram Financ e Comp any ||Setia Auto financ e ||Esska y Financ e ||NIL ||Mum al Marbl es ||Esskay Finance |
|ix) The percent age of equity shares held by the employe e along with thespou se and depende nt children in the Compan y within the meanin g of clause (iii) of sub - rule (2) ||4.19% ||3.55% ||2.31% ||0.00% ||NIL ||NIL ||NIL ||NIL ||NIL ||NIL |
|x) Name of Director or manage r of whom such employe e is a relative. ||Mrs. AlpanaB aid ||Mrs. Alpana Baid ||Mr. Aman Baid & Mrs. Alpana Baid ||NIL ||NIL ||NIL ||NIL ||NIL ||NIL ||NIL |
(B) The ratio of the remuneration of each Director to the median employee'sremuneration and other details in terms of sub-section 12 of Section 197 of the Act readwith Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are forming part of this report as Annexure IV.
35.CHAIRMAN AND CFO CERTIFICATE
The Chairman and Managing Director and the Chief Financial Officer of the Company giveannual certification on financial reporting and internal controls to the Board in terms ofRegulation 17(8) of the Listing Regulations. The Chairman and Managing Director and theChief Financial Officer also give quarterly certification on financial results whileplacing the financial results before the Board in terms of Regulation 33(2) of ListingRegulations. The annual certificate given by the Chairman and Managing Director and theChief Financial Officer is published in this Report.
36.COMPLIANCE WITH THE CODE OF CONDUCT AND ETHICS
In compliance with the Listing Regulations and Act the Company has framed and adopteda code of conduct and ethics ("the code"). The code is applicable to the membersof the Board the executive officers and all the employees of the Company.
All the members of the Board and Senior Management Personnel have affirmed complianceto the code for the financial year ended on March 31 2020 and a declaration to thiseffect signed by the Managing Director forms part of the Corporate Governance Report asAnnexure VI.
37.DISCLOSURE OF ACCOUNTING TREATMENT
The Financial Statement of the Company for FY 2019-20 have been prepared with theapplicable accounting principles in India and the mandatory Indian Accounting Standard(IndAS') as prescribed under Section 133 of the Act read with the rules made thereunder.
38.DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to sub section 3 (c) of Section 134 of the Act the Board of Directors of theCompany hereby state and confirm that:
i. in the preparation of the annual accounts for the year ended on March 31 2020 theapplicable accounting standards have been followed and there are no material departuresfrom the same;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year ended onMarch 31 2020 and of the profit and loss of the Company for that period;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the Directors have prepared the annual accounts on a going concern basis;
v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Other disclosures with respect to Board's Report as required under the Act Rulesnotified thereunder and Listing Regulations are either NIL or NOT APPLICABLE.
Your Board acknowledges with appreciation the invaluable support provided by theCompany's stakeholders auditors advisors and business partners all its customers fortheir patronage. Your Board records with sincere appreciation the valuable contributionmade by employees at all levels and looks forward to their continued commitment to achievefurther growth and take up more challenges that the Company has set for the future.