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Ceejay Finance Ltd.

BSE: 530789 Sector: Financials
NSE: N.A. ISIN Code: INE358C01010
BSE 13:29 | 17 Jul 101.90 0






NSE 05:30 | 01 Jan Ceejay Finance Ltd
OPEN 101.90
52-Week high 241.00
52-Week low 95.05
P/E 6.32
Mkt Cap.(Rs cr) 35
Buy Price 99.00
Buy Qty 150.00
Sell Price 104.00
Sell Qty 50.00
OPEN 101.90
CLOSE 101.90
52-Week high 241.00
52-Week low 95.05
P/E 6.32
Mkt Cap.(Rs cr) 35
Buy Price 99.00
Buy Qty 150.00
Sell Price 104.00
Sell Qty 50.00

Ceejay Finance Ltd. (CEEJAYFINANCE) - Director Report

Company director report



Your Directors hereby present their TWENTY FOURTH Annual Report together with theaudited accounts of the Company for the year ended 31st March 2017.


(Rs. in Lacs)
Revenue From Operations 1449.56 1227.49
Total Revenue 1450.53 1228.44
Profit Before Depreciation & Tax 714.81 578.21
Depreciation 15.88 14.49
Profit before Tax 698.93 563.72
Provision for tax
Current 231.00 187.51
Deferred 0.07 0.33
Provision of Income Tax of earlier period 0.39 0.69
Profit After Tax 467.47 375.19
Balance of Profit brought forward 68.89 72.82
Profit available for Appropriation 536.36 448.01
Dividend Paid 51.75
Corporate tax on Dividend 12.17
Transferred to
Statutory reserve 93.50 75.20
General reserve 275.00 240.00
Balance Carried to Balance Sheet 167.86 68.89


We are pleased to recommend dividend of 15% p.a (Rs. 1.50 per share) on the EquityShare Capital of the Company for the financial year ended 31st March 2017. Thedividend if approved by the members will be paid to members within the period stipulatedby the Companies Act 2013.


The unclaimed dividend as on 31st March 2017 was Rs. 17.57 lakhs. Theunpaid/unclaimed dividend of Rs. 1.77 lakhs for the financial year 2008-09 has beentransferred to the Investor Education and Protection Fund during the year.


Your Company has continued to grow steady but substantially due to the concertedmarketing efforts in new business centers new product and prudent recovery system.Company has maintained steady growth in operations and profit during fiscal 2016-17. Totalrevenue including income from operations and other income increased to Rs. 1450.53 lacs inthe current year from Rs. 1228.44 lacs in previous year. The total expenses increased fromRs. 664.72 lacs in previous year to Rs. 751.60 lacs in current year mainly towardsprovisions of doubtful debt/ NPA and increase in sales expenses due to competition. Thefinance cost increased marginally to Rs. 241.65 lacs in the current year compared to Rs.208.00 lacs in previous year. Accordingly the profit before tax increased from Rs. 563.72lacs in the previous year to Rs. 698.93 lacs in the current year. After providing tax ofRs. 231.00 lacs in the current year (Rs. 187.51 lacs in previous year) profit after taxincreased Rs.467.47 lacs against Rs. 375.19 lacs in the previous year.

The total disbursement made in the current year Rs. 5721.40 lacs as compared to Rs.4611.73 lacs in previous year. The Company's strategy to focus for the business in smallerplaces and specialization in two/ three wheeler segment has remained unchanged.Hypothecation / loan stock of the Company has increased from Rs. 4252.57 lacs in previousyear to Rs. 4969.00 lacs in the current year.

The assets of the Company are properly and adequately insured and recoveries are atsatisfactory level.


Your Company continues to operate the same business segment as that of previous yearand there is no change in the nature of the business.


No material changes and commitments have occurred after the close of the financial yeartill the date of this report which affect the financial position of the Company.


Indian economy recorded a growth rate of 7.1% in terms of real GDP in 2016-17. Whileagriculture growth rose to 4.4 % in2016-17 from 0.8 % in 2015-16 service sector growthdecline to 7.9% from 9.8 % during the same period. Inflation moderated with the averagelevel of consumer price inflation declining to 4.6% in 2016-17 from 4.9% % in 2015-16. FDIinflow increased by 12% in April-December period of 2016 compare to previous correspondingperiod. The growth inflation mix should continue to remain broadly unchanged in 2017-18.Going forward headline GDP growth is likely to increase to 7.5 % in 2017-18 from 7.1% in2016-17

The year was marked by major events namely demonetization of specified bank notesconclusion of legislative assembly elections in five states passage of Goods and ServicesTax (GST) Bill by the Parliament. On November 8 2016 the government announced thedemonetization of ?500 and?1000 denomination notes thereby rendering 86% of the cash incirculation as invalid. The decline in cash in circulation had led to increase in bankdeposits with a resultant decline in interest rates on deposits loans and governmentsecurities as well as a decline in real-estate prices increase in savingsdigitalization income disclosure with a resultant increase in collections by tax andother local authorities. The immediate effect of demonetization was on the dailywages/earnings of the contract and unskilled laborer's employed in highly labourintensive unorganized sector construction transportation sectors etc. These sectors aremore dependent on cash for working capital requirements. There was a temporary decline indemand due to shortage of cash. This had caused layoff of contract workers disruption inproduction activities due to manpower loss etc. The impact of demonetisation isdissipating with entry of replacement notes in circulation.

This has affected largely to small NBFCs. India's financial services sector isdiversified comprising of entities such as commercial banks co-operatives insurancecompanies pension funds mutual funds non-banking financial companies and other variousentities. As on December 31 2016 the total managed retail credit (including off balancesheet book) of NBFCs stood at ~Rs. 5.6 trillion growing year-on-year by about 17.5% in 9MFY 2017 (as against 19.5% in FY 2016 and 14.8% in FY 2015). The total NBFC retail creditincluding SME exposure stood at about Rs. 6.2 trillion as on December 31 2016 growingyear-on year by about 19.0% in 9M FY 2017 (as against 21.2% in FY2016 and 16.2% in FY2015).

The parliament took a decisive step towards a possible roll out of Goods and ServicesTax (GST) on July 1 2017 by passing therefore related legislations on GST. The stategovernments will have to pass the GST law in their respective state assemblies. GST willbe a single levy to replace multiple central and state taxes to make the country aseamless national market and is expected to boost India's growth rate. According to RBIGVA growth is projected to strengthen to 7.4% in 2017-18. Inflation is expected to average4.5% in the first half and 5 % in the second half of the FY 2017-18.Domestic sales ofpassenger vehicles are expected to grow from 2.8 million in 2016 to 9.4 - 13.4 million by2026. The Budget 2017 proposals include the Government's commitment to double the farmers'income in 5 years. With further boost to the infrastructure and rural sector announced inthe Budget 2017 it will contribute in increasing the business of the Company.

As on now company major focus is on two wheeler business in rural area. The growthrate of two wheeler industry and its financing pattern make direct impact on theperformance of the company. After flat development in year 2015 two and three wheelermarket improved in 2016. Compared production of 19429 thousand in 2014 and 19462 thousandin 2015 the segment growth is increased to 20814 thousand in 2016. However demonetizationdid impact two wheeler markets in the last quarter and after effects of this disruptionare still felt in the first quarter of 2017. However against that union budget for2017-18 provides for increased allocation for rural development and welfare scheme. Thiswill support positive development of this segment in current year. However financing itsown product by manufacturers is big threat to small and middle level NBFC.

Our mission is to be sound NBFC among regional players in terms of product offeringstechnology service levels risk management and audit and compliance etc. The objective isto continue building sound customer /franchises across distinct businesses so as to be apreferred provider of NBFC services for its target retail and customer segments and toachieve a healthy growth in profitability consistent with the company's risk appetite.The company's range of retail financial products and excellent services and branches network is fairly exhaustive to meet up the coming challenges. The objective is continue tobuild sound customer/dealer friendly atmosphere to achieve healthy growth inprofitability consistent with company's risk appetite. The company also emphasizes todevelop innovative products and services that attract its Customers Increase its marketshare as NBFC and financial services industry by following a disciplined growth strategyfocusing on balancing quality and volume growth while delivering high quality customerservice maintain reasonably good standards for asset quality through disciplined creditrisk management; and continue to develop products and services that reduce its cost offunds; and Focus on healthy earnings growth with low volatility. Our company growth ismore important especially looking to the concentration in rural area for the business. Thecompany grew its retail assets portfolio in a well balanced manner focusing on bothreturns as well as risk. Company intends to follow conservative view in the coming years.Company also expects continuous threats to small/medium Company like us from global/giantplayers in the retail finance market especially with large size/volume lower rate ofinterest and ability to sustain in the market is inevitable for the company to sustain inthe market.

Overall in spite of various pros and corns your company has demonstrated outstandingachievement in terms of earned valued and well-built market presence. Your company is cashrich has better liquidity improved working capital and it has shown its readiness toaccept market challenges. All of these are signs of strong fundamentals which the companyhas been able to establish with the help of batter and professional management support.


Your company has comprehensive Risk Management System towards identification andevaluation of all potential business risks. Management has developed Risk Management Planand reviews its implementation regularly. The company is exposed to external and internalrisk associated with its business. To counter these risks the company continues tobroaden its product portfolio increase customer profile and geographic reach.

Taking on various types of risk is integral to the NBFC business. Sound risk managementand balancing risk-reward trade-offs are critical to a company's success. Business andrevenue growth have therefore to be weighed in the context of the risks implicit in thecompany's business strategy. Of the various types of risks your company is exposed to themost important are credit risk credit concentration risk market risk business riskstrategic risk interest rate risk model risk technology risk including liquidity riskprice risk and operational risk. The identification measurement monitoring andmanagement of risks accordingly remain a key focus area for the Company. For credit riskappropriate distinct policies and processes are in place for the retail businesses.Overall portfolio diversification and reviews also facilitate mitigation and management.Especially a small capital based company faces multiple problems due to poor recoverysystems. The specific NPA provisions that the company has made continue to be moreconservative than the regulatory requirements. This will help the company to maintain highstandards for assets quality through disciplined credit risk management.

However while the balance of risks in the last financial year were largely externaldemonetization did impact two wheeler markets in the last quarter and after effects ofthis disruption are still felt in the first quarter of 2017.

The company has strength as being the pioneer in the two wheeler vehicles financingsector in Gujarat/Maharashtra Oldest NBFC since last 20 years sound financial positionsince inception a well-defined and scalable organisation structure strong financialtrack record with low Non-Performing Assets (NPAs) Experienced and stable managementteam strong relationships with public private as well as banks fast Procedure. Howeveryour company is facing the threat of small organisation structure availability ofcheaper fund competition with large NBFC's/Banks direct manufacturer involvement infinance business and rain fall affecting rural area.


As on 31st March 2017 against hypothecation of loan stock of Rs. 4969.00lacs (previous year Rs. 4252.57 lacs) Rs. 3030.84 is falling due within 12 months.Company has made provision for Non Performing Hypothecation loan stocks for Rs. 8.56 lacs(previous year Rs. 7.83 lacs). The NPA of bad debts/hypo. loans written off during thefinancial year is Rs. 45.80 lacs (previous year RS. 11.58 lacs) while provision fordoubtful/ nonperforming assets is Rs. 22.54 lacs (Previous year Rs. 46.27 lacs.)


The Company has Internal Audit and Compliance functions which are responsible forindependently evaluating the adequacy of all internal controls and ensuring operating andbusiness units adhere to internal processes and procedures as well as to regulatory andlegal requirements. The audit function also recommends improvements in operationalprocesses and service quality. To mitigate operational risks the Company has put in placeextensive internal controls including restricted access to the Company's computer systemsappropriate segregation of front and back office operations and strong audit trails. TheAudit Committee of the Board also reviews the performance of the audit and compliancefunctions and reviews the effectiveness of controls and compliance with regulatoryguidelines. The Board has formed a new audit committee considering the requirement underthe Companies Act 2013 and rules made thereunder. Along with keeping in view therequirement under listing agreement.


Cost of funds for retail-focused NBFCs which remained high at 12%-14% is likely toremain stable during the year. As mentioned earlier Company is in constant search toavail cheaper fund to reduce our cost of funds. The cash credit limit of the Company hasremained at Rs. 1500 lacs with the Banks.

The Company has discontinued accepting or renewing fresh deposits therefore there nooutstanding fixed deposit as on date. Inter Corporate Deposit increased from Rs. 887.63lacs in the previous year to Rs. 1200.00 lacs in current year. Bank borrowing increasedfrom Rs. 896.90 lacs to Rs. 1470.43 lacs due to increase in business.

The Company has obtained ICRA rating for Rs. 1500 lacs Cash Credit Limits from Bank.ICRA has assigned +BB (Stable) ratings for the same.


Your Company's Capital Adequacy Ratio (CAR) stood at 55.84% well above the regulatoryminimum of 15%. The revised Guidelines issued by R.B.I for recognition of Income assetclassification Investment accounting provision for non-performing assets and capitaladequacy have been followed by your Company. The Company has also made the provision fornon performing assets in case of Sub-standard doubtful and loss assets as per R.B.I.guidelines.


The Company has not accepted any deposits from the public within the meaning ofprovision of Non- Banking financial Companies accepted of public deposits (reserve banks)direction 1988.

As reported earlier the Company has discontinued to accept or renewed fresh/existingfixed deposits. At the close of the year no amount remained unclaimed or unpaid. TheCompany does not have any claimed but unpaid deposits.


Mr. Deepak Patel (DIN: 00081100) and Mr. Shailesh Patel (DIN: 00081127) are liable toretire by rotation at the ensuing Annual General Meeting and being eligible offerthemselves for reappointment. There was no change in the Board of Directors during theyear under review.

The Board of Directors of the Company hereby confirms that all the IndependentDirectors duly appointed by the Company have given the declaration and they meet thecriteria of independence as provided under section 149(6) of the Companies Act 2013.


As per regulation 27(2) of the SEBI listing Obligations and Disclosure RequirementsRegulations 2015 with stock exchanges your Company was required to implement the code ofCorporate Governance. Accordingly your Company has complied in all material respects withthe features of the said code. A report on the same is given separately.


To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofclause (c) of sub-section (3) of Section 134 of the Companies Act 2013 which statesthat—

(a) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;

(b) 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 and ofthe profit of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the Annual Accounts on a going concern basis;

(e) 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

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Pursuant to the provisions of listing agreement with stock exchanges the equity sharesof the Company are listed at Ahmedabad (regional) and Mumbai stock exchanges. The StockExchange Ahmedabad is inoperative; the Company has made application for delisting andawaits reply from the exchange.


Your Company has established electronic connectivity with National SecuritiesDepository Ltd. (NSDL) and Central Depository Services (India) Ltd. In view of thecompulsory dematerialization of Company's equity shares on stock exchanges members arerequested to dematerialize the shares on either of the depositories as aforesaid.


The term of appointment of M/s. Kantilal Patel & Co. Chartered Accountants(Membership No. 104744W) as statutory auditors of the Company expires on the day of theensuing Annual General Meeting. By virtue of the provisions of Section 139[2] of theCompany relating system of rotation of auditors at the specified period M/s. KantilalPatel & Co. Chartered Accountants are now not eligible to continue to be appointed asauditors of the Company for a further term. It is now proposed to appoint M/s. PruthviShah & Associates Chartered Accountants (Firm Reg. No. 144032W) from the conclusionof the 24th Annual General Meeting till the conclusion of ensuing AnnualGeneral Meeting in compliance with the provision of Section 139[1] of the Companies Act2013. The Company has received a certificate from the M/s. Pruthvi Shah & Associatesto the effect that if they are appointed it would be in accordance with the provisions ofSection 141 of the Companies Act 2013. The appointment if made will be subject toratification at every Annual General Meeting


Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Tushar Vora Company secretaries in practice to undertake the secretarialaudit of the Company. The secretarial audit report is annexed herewith as Annexure"A".


Since the net profit for the year ended 31st March 2017 is less than Rs. 5crores the relevant provision of the Act is not applicable.


The Nomination and remuneration Committee comprises of Mr. Bharat Amin as Chairman Mr.Kiritkumar Dalal Mrs. Mrudulaben Patel Mr. Sunil G. Patel and Mr. Deepak Patel as othermembers. The role and responsibilities Company's policy on Directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a Director and other related matters are in conformity with therequirements of the Companies Act 2013 and SEBI [Listing Obligations and DisclosureRequirements] Regulations 2015.


The Board of Directors and members of Audit committee during the financial year2016-17 met five times. The Audit Committee comprises of Mr. Bharat Amin as Chairman Mr.Kirit kumar Dalal Mrs. Mrudulaben Patel and Mr. Sunil G. Patel and Mr. Deepak Patel asother members. The scope of Audit committee is enhanced in accordance with the CompaniesAct 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations 2015.


The Stakeholders Relationship/Share Transfer committee of Mr. Bharat Amin as ChairmanMr. Kirit kumar Dalal Mrs. Mrudulaben Patel Mr. Sunil G. Patel and Mr. Deepak Patel asother members in accordance with the Companies Act 2013 and SEBI [Listing Obligationsand Disclosure Requirements] Regulations 2015.


A detailed exercise for evaluation of the performance of the Board its variouscommittees and also the performance of individual Directors was carried out by the Board.The performance of the Board and that of its committees was evaluated on the basis ofvarious parameters like adequacy of Composition Board Culture Execution and performanceof specific duties obligations and governance etc. Whereas the evaluation of individualDirectors and that of the Chairman of the Board was on the basis of various factors liketheir attendance level of their engagement their contribution and independency ofjudgment their contribution in safeguarding the interest of the Company and otherrelevant factors. The Board and committees put sufficient efforts to safeguard theinterest of the Company. The information relating to its terms of reference no. ofmeetings held and attendance etc during the year under report are provided in CorporateGovernance Report.

During the year under report the Company has appointed Key Managerial Personnel tointer alia shoulder the responsibilities in their respective fields as envisaged under theprovisions of the Companies Act 2013.


The particulars of ratio of remuneration of Director KMP and employees moreparticularly described under section 197(12) of the Companies Act2013 and Rules 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given inAnnexure "B" to this report.


There are no Employees covered by Section 197 of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.


The Company being NBFC registered with Reserve Bank of India with principal business asloan Company the provisions of Section 186 except sub section (1) of the Companies Act2013 are not applicable to it. Hence no particulars thereof as envisaged under Section134(3)(g) of the Act are covered in this report.


The Company has no transaction with related parties referred to sub section (1) ofSection 188 of the Companies Act 2013. However other related party transactions notcovered above are disclosed in note 22.8 of this report.


As the Company is in finance and loan segment the Company has no activities relatingto conservation of energy or technology absorption. The Company has had no foreignexchange earnings or out goes during the year under review.


The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and redressal) Act 2013 and no complaint has been received on sexualharassment during the financial year 2016-17.


The Company has adopted a "Vigil Mechanism/Whistle Blower Policy". The Briefdetails of establishment of this policy are provided in the Corporate Governance Report.


In accordance with the ‘Green Initiative' the Company has been sending the AnnualReport/Notice of AGM in electronic mode to those Shareholders whose Email ids areregistered with the Company and / or the Depository Participants. Your Directors arethankful to the Shareholders for actively participating in the Green Initiative.


The Company was already having risk management system to identify evaluate andminimize the business risks. The Company during the year had formalized the same byadopting Risk Management Policy. This policy intends to identify evaluate monitor andminimize the identifiable risks in the organization.


The extract of the Annual Return in Form MGT-9 is provided in Annexure "D" tothis report.


Remuneration to Managing Director

The remuneration paid to managing Director is recommended by the Nomination andRemuneration Committee and approved by Board of Directors and shareholders of the Company.The remuneration is decided after considering various factors such as qualificationexperience performance responsibilities shouldered industry standards as well asfinancial position of the Company.

Remuneration to Non Executive Directors:

No fees/remuneration are being paid to the Non-Executive Directors.


The Code of Conduct for all Board members and Senior Management of the Company havebeen laid down and are being complied with in words and spirit. The compliance ondeclaration of code of Conduct signed by Managing Director of the Company is included as apart of this Annual Report.


No orders were passed by the regulators or courts or tribunals impacting the goingconcern status and Company's operation in future.


The Directors would like to place on record their sincere appreciation to all theemployees of their continued effort towards the growth of the Company and would also liketo express their thanks to the Bankers Shareholders and Customers for their support andcontribution which enabled the Company to achieve its goals for the year.

Dated : 27th May 2017 DIN: 00080903

"Annexure A"


The Members

Ceejay Finance Limited

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as considered appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification as done on test basis is to reasonably ensure that correct facts arereflected in secretarial records. We believe that the processes and practices we followedprovide a reasonable basis for our opinion.

3. In respect of laws rules and regulations other than those specifically mentioned inour report above we have limited our review analysis and reporting up to process andsystem adopted by the Company for compliance with the same and have not verified detailedcompliance submissions reporting under such laws etc. nor verified correctness andappropriateness thereof including financial records and books of accounts of the Company.

4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws RulesRegulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to compliance in totality orthe future viability of the Company nor of the efficacy or effectiveness with which themanagement has conducted the affairs of the Company.

Ahmedabad. Company Secretaries
FCS No. 3459
C P No.: 1745


Disclosure of Ratio of Remuneration of each Director to Median Employees Remunerationthe % increase in remuneration of Director Chief Financial Officer and Company Secretaryfor the financial year ended 31st March 2017.

1) Ratio of Mr. Deepak Patel Managing Director's remuneration to the medianremuneration of employees of the Company is 8.54:1

2) Percentage increase in remuneration of Mr. Deepak Patel Managing Director is 11.67%Mr. Kamlesh Upadhyaya Company Secretary is 11.08% and Mr. D. T. Shah CFO is 1.18% in thefinancial year.

3) Percentage increase in the median remuneration of employees-6.35%

4) Number of permanent employees on the rolls of Company-41 employees.

5) The average increase in the salaries of employees other than managerial personnel inthe financial year was 15.50% compared to average increase in managerial personnelremuneration of 10.49%.

6) The Company affirms that the remuneration is as per the remuneration policy of theCompany.

Place: Nadiad CHAIRMAN
Dated: 27th May 2017 DIN: 00080903