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Ceejay Finance Ltd.

BSE: 530789 Sector: Financials
NSE: N.A. ISIN Code: INE358C01010
BSE 00:00 | 03 Dec 90.05 -5.90
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NSE 05:30 | 01 Jan Ceejay Finance Ltd
OPEN 96.00
PREVIOUS CLOSE 95.95
VOLUME 418
52-Week high 146.80
52-Week low 67.00
P/E 7.00
Mkt Cap.(Rs cr) 31
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 96.00
CLOSE 95.95
VOLUME 418
52-Week high 146.80
52-Week low 67.00
P/E 7.00
Mkt Cap.(Rs cr) 31
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ceejay Finance Ltd. (CEEJAYFINANCE) - Director Report

Company director report

To

THE MEMBERS OF CEEJAY FINANCE LIMITED

Your Directors are pleased to present their TWENTY SEVENTH Annual Report together withthe Audited Statement of Accounts of the Company for the year ended 31st March 2020.

FINANCIAL RESULTS: (Rs. In Lakhs)
PARTICULARS YEAR ENDED 31/03/2020 YEAR ENDED 31/03/2019
Revenue From Operations 1730.42 1478.69
Other Income 4.56 2.67
Total Revenue 1734.98 1481.36
Profit Before Depreciation Finance Cost& Tax 892.22 907.98
Finance Cost 240.99 227.19
Depreciation 13.61 14.48
Profit before Tax 637.62 666.31
Provision for tax - -
Current Tax 171.04 199.84
Deferred Tax (15.45) (16.02)
Provision of Income Tax of earlier period - -
Profit After Tax 482.03 482.49
Balance of Profit brought forward 242.77 305.38
Profit available for Appropriation 712.37 773.75
APPROPRIATION - -
Dividend Paid 18-19 51.75 86.25
Corporate tax on Dividend 18-19 Transferred to 10.64 17.73
Statutory reserve 96.41 102.00
General reserve 325.00 325.00
Balance Carried to Balance Sheet 246.45 242.77
Proposed Dividend 2019-20 34.50 51.75

COVID-19

In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers.

In the terms of the COVID-19 Regulatory package of the RBI vide guidelines dated 27thMarch 2020 17th April 2020 and 23rd May 2020 and in accordance with the Schemeapproved by the Company's Board of Directors (the "Board") the Company hasoffered to all eligible borrowers moratorium of six months on the payment of all loansinstalments falling due between 01st March 2020 and 31st August 2020. In thisconnection having regard to the guidance provided by the RBI and the Institute ofChartered Accountants of India extension of such moratorium benefit to borrowers as perthe COVID-19 Regulatory Package of the RBI by itself is not considered to result insignificant increase in credit risk as per Ind AS 109. Further estimates and associatedassumptions applied in preparing the financial statements especially in respect ofexpected credit loss on loans are based on historical experience and otheremerging/forward looking factors including those arising on account of the COVID-19pandemic.

The Company inter alia has used relevant indicators of moratorium along with anestimation of potential stress on probability of defaults and loss given defaults due toCOVID-19 situation in developing the estimates and assumptions to assess the expectedcredit loss on loans including on account of potential macro-economic conditions and hasincrementally provided for an expected credit loss of Rs. 88.65 lakh for the year ended31st March 2020. However considering the inherent uncertainty regarding the severity andduration of the pandemic and the resultant economic impact the Company's actualimpairment loss could be different from these estimates.

The extent to which the COVID-19 pandemic will impact the Company's results will dependon future developments which are highly uncertain including among other things any newinformation concerning the severity of the COVID-19 pandemic and any action to contain itsspread or mitigate its impact whether government-mandated or elected by the Company. Giventhe uncertainty over the potential macroeconomic condition the impact of COVID-19pandemic may be different from that estimated as at the date of approval of thesefinancial results and the Company will continue to closely monitor any material changes tofuture economic conditions.

DIVIDEND

The Board is pleased to recommend dividend @ 10% (Rs. 1.00 per share) per equity shareof the face value of Rs. 10 each/- for the financial year ended 31st March 2020 on thepaid up Equity Share Capital of the Company. The dividend if approved by the memberswill be paid to members eligible as on the record date within the period stipulated bythe Companies Act 2013.

If declared the total amount outflow on account of dividend will be Rs. 34.50/- Lakhssubject to deduction of TDS as applicable.

UNCLAIMED DIVIDEND AND TRANSFER OF SHARES TO IEPF

The total unclaimed dividend as on 31 st March 2020 was Rs.21.84 Lakhs of which theunpaid/unclaimed dividend of Rs. 2.33 Lakhs for the financial year 2011-12 has beentransferred to the Investor Education and Protection Fund during the year under report.

Pursuant to the Investor Education and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 24462 equity shares have been transferred to InvestorEducation and Protection Fund during the year. The Company has duly complied with relevantapplicable provisions of Investor Education and Protection Fund Authority (AccountingAudit T ransfer and Refund) Rules 2016. The details of the unpaid and unclaimed dividendis uploaded at company and IEPF Website (www.iepf.gov.in). The Board has appointed CompanySecretary and Compliance Officer as Nodal Officer to coordinate with IEPF authority andthe Contact details of the same are available at company's website.

COMPANY'S AFFAIRS AND FUTURE OUTLOOK

Total revenue including income from operations and other income increased to Rs.1734.98Lakhs in the current year from Rs.1481.36 Lakhs in previous year. The total expensesincreased to Rs. 1097.36 Lakhs in current year from Rs. 815.05 Lakhs in previous yearmainly towards making additional COVID-19 provisions & provision for expected creditloss and increase in Finance Cost and other expenses. The finance cost has increased toRs. 240.99 Lakhs in the current year compared to Rs.227.19 Lakhs in previous year due toincrease in borrowing cost. Accordingly the profit before tax decreased to Rs.637.62Lakhs in the current year from Rs. 666.31 Lakhs in the previous year. After providing taxof Rs.155.59 Lakhs in the current year (Rs. 183.82 Lakhs in previous year) profit aftertax decreased to Rs. 482.03 Lakhs against Rs. 482.49 Lakhs in the previous year.

The total disbursement made in the current year Rs. 5934.00 Lakhs as compared to Rs.5554.21 Lakhs in previous year. The Company's strategy to focus for the business insmaller places and specialization in two/three wheeler segment/used four wheelers hasremained unchanged. Hypothecation / loan stock of the Company has increased to Rs. 6897.92Lakhs in current year from Rs. 5881.82 Lakhs in the previous year.

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

SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES

The Company does not have any subsidiary companies associate companies or jointventure during the year under review.

CHANGE IN NATURE OF BUSINESS IF ANY

Your Company continues to operate in the single business segment as that of previousyear and there is no change in the nature of the business.

REPORTING OF FRAUDS

There have been no instances of fraud reported by the statutory auditors under section143(12) of the Act and rules framed thereunder either to the Company or to the centralgovernment.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments have occurred after the close of the financial year31st March 2020 till the date of this report which affect or is likely to affect thefinancial position of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS OUTLOOK AND OPPORTUNITY

The financial year 2019-20 began with the Lok Sabha elections in April - May and thenewly formed government took a strong stance on economic development with the aspirationto reach a $5 trillion economy by 2024. The Economic Survey published in July 2019 withthe theme of wealth creation probusiness policies and corporate tax rate cuts ofSeptember 2019 were in line with the aspirations. At the end of August 2019 the ministryof finance announced that 10 Public Sector Banks were to be merged into 4. Meanwhile RBIsystematically reduced the repo policy rates over the course of the year from 6.25% atthe end of FY 19 to 4.40% at the end of FY 20.

Despite these interventions FY 20 showed a slowdown in growth from the previous year.Implied real GDP growth was estimated at 5% down from FY 19 figure of 6.1%. 2019-20 wasalso negative for the automobile industry with sales down in passenger vehicle by 16%commercial vehicles by 29% and two wheelers by 18%. Similarly Global economic activitywas also consistently slow paced and followed a downward trajectory: year over year realGDP growth was recorded at 2.9% as of Q3 2019 compared to 3.6% in the previous year.

The Indian automotive industry was in a slowdown well before the COVID-19 pandemicbegan wreaking havoc. Thus the only significant effect of the pandemic on the overallannual sales figures here is in the month of March where sales did drop even lower. Whilethe two-wheeler sector saw a huge 39.83 percent drop in sales for March 2020 alone theoverall FY2020 sales figures are 17.7 percent lower than FY2019. As per figures releasedby industry body Society of Indian Automobile Manufacturers (SIAM) cumulative two-wheelersales in FY2020 stood at 17.41 million units - the lowest in four years.

The outbreak of the COVID-19 pandemic in January 2020 brought the global economy toalmost a standstill with a high possibility of slipping into a recession. Severalindustries starting with travel tourism and hospitality were immediately hit withmanufacturing and services following soon afterwards. Crude oil prices plummeted and fromJanuary 2020 panic sell-off resulted in wealth destruction in equity markets acrossadvanced and emerging economies alike.

In India the government announced a nationwide lockdown from March 24 2020 in aneffort to contain the spread of the disease which led to unprecedented economic shock.The lockdown has resulted in a liquidity crunch followed by a labor shortage. RBIannounced three months moratorium for loans and extended it by another three months fromMarch 2020 till August 2020 to alleviate some of the financial burden on the public.

Outlook for the current financial year continues to remain uncertain with the COVID-19situation evolving each day. Apart from agriculture and related activities most othersectors of the economy have been adversely impacted by the pandemic and are expected toshow de-growth. India's GDP growth for FY 21 is now projected to reduce significantly ascompared to pre-COVID projections of around 5%. If COVID-19 is prolonged and supply chaindisruptions get accentuated the global slowdown could deepen with adverse implicationsfor India. The fall of international crude prices could however provide some relief inthe form of trade gains. In addition the government and RBI have been taking steps tomitigate the economic impact of the pandemic through stimulus packages cuts to repo andreverse repo rates liquidity infusion through Targeted Long Term Repo Operations(TLTROs) and loosened the liquidity criteria for banks and NBFCs.

The company's significant share of revenue comes from two wheeler finance in ruralarea. The thrust on rural and infrastructure sectors by the government could rejuvenaterural demand and also crowd in private investment. We continue to focus on Two wheeler andSecond-hand Four Wheeler Vehicle financing and we adopt such business models whichgenerates required return on assets and the quality portfolio.

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 branchesnet work is fairly exhaustive to meet up the coming challenges. The objective is continueto build 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 demonstratedoutstanding achievement in terms of earned valued and well-built market presence. YourCompany is cash rich has better liquidity improved working capital and it has shown itsreadiness to accept market challenges. All of these are signs of strong fundamentals whichthe Company has been able to establish with the help of batter and professional managementsupport. The main growth drivers for the company is Unique value proposition Regionaloutreach Deep understanding of the customer segment Customised product offeringsAvailability of capital Leveraging technology Co-lending arrangements and Riskmanagement.

RISK MANAGEMENT / SWOT ANALYSIS

In its pursuit of creating value for stakeholders through sustainable business growthCompany has put in place a robust risk management framework to promote a proactiveapproach in reporting evaluating and resolving risks associated with the business. Giventhe nature of the business the company is engaged in the risk framework recognizes thatthere is uncertainty in creating and sustaining such value as well as in identifyingopportunities. Risk management is therefore made an integral part of the company'soperations The RBI has been tightening regulations to manage the risk in the sector andhas been proposing higher capital and provisioning requirements. It has also beenstressing on higher disclosures to safeguard public money and prevent systemic shocks. Inaddition the RBI has taken rapid preventive actions in addressing specific issues tomanage systemic risk. It is expected that RBI will continue to monitor the activity andperformance of the NBFC sector with a focus on major entities and their inter-linkageswith other sectors to maintain financial stability in the short medium and long-term.

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 onvarious types of risk is integral to the NBFC business. Sound risk management andbalancing risk reward trade-offs are critical to a Company's success. Business and revenuegrowth have therefore to be weighed in the context of the risks implicit in the Company'sbusiness strategy. Of the various types of risks your Company is exposed to the mostimportant 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. The Company hasstrength as being the pioneer in the two wheeler vehicles financing sector inGujarat/Maharashtra Oldest NBFC since last 25 years sound financial position sinceinception a well-defined and scalable organisation structure strong financial trackrecord with low Non Performing Assets (NPAs) Experienced and stable management teamstrong relationships with public private as well as banks fast Procedure. However yourCompany is facing the threat of small organisation structure availability of cheaperfund competition with large NBFC's/ Banks direct manufacturer involvement in financebusiness and rain fall affecting rural area. Regulatory restrictions - continuouslyevolving Government regulations and uncertain economic and political environment mayimpact operations.

The NBFC sector continued to experience liquidity problems in the financial year2019-20 with the spreads over the G-Sec also continuing to widen for the sector. Therisk-appetite further weakened in the third quarter of FY 2020 due to uncertainties causedby CoronaVirus (COVID-19). This led to funding primarily being available to companieshaving strong parentage brand and business model robust corporate governance andconservative ALM. Your Company continued to focus on managing cash efficiently and ensuredthat it had adequate levels of liquidity apart from back-up lines of credit to supportbusiness requirement and near term liability maturity.

Further Capital Adequacy Ratio (capital as a % of total advances) is quite comfortableat around 61.29% Well above regulatory minimum of 15%.

FINANCIAL PERFORMANCE

As on 31st March 2020 against hypothecation of loan stock of Rs. 6897.92 Lakhs(previous year Rs. 5881.52 Lakhs). The company has made Rs. 96.94 Lakhs provision towardsexpected credit loss out of which Rs. 88.65 Lakhs is additional COVID-19 provision as perRBI guidelines.

INTERNAL AUDIT AND COMPLIANCE

The Company has appointed M/s. Vipinchandra C. Shah & Co. Chartered Accountants asinternal auditors of the Company who regularly carries out the internal audit of theCompany. All audit reports are regularly placed before the audit committee at committees'meetings which are also attended by internal auditor. After providing due explanationsthe Company adopts the final suggestions and necessary effects are given in accountingprocess and system of the Company.

RESOURCE MOBILATION/ICRA RATING

Cost of funds for retail-focused NBFCs which remained high at 12%-14% is likely toincrease during the year. As mentioned earlier Company is in constant search to availcheaper fund to reduce our cost of funds. The cash credit limit of the Company hasremained at Rs. 1500.00 Lakhs with the Banks.

The Company has discontinued accepting or renewing fresh deposits therefore there nooutstanding fixed deposit as on date. Inter Corporate Deposit increased to Rs. 1500.00Lakhs in the current year from Rs. 1175.00 Lakhs in previous year.

The Company has obtained CARE rating for Rs. 1500.00 Lakhs Cash Credit Limits fromBank. There is no change in CARE rating compare to last year (BBB-(Stable)).

CAPITAL ADEQUACY

Your Company's Capital Adequacy Ratio (CAR) stood at 61.29% 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.

CAPITAL STRUCTURE

There has been no change in the authorised issued subscribed and paid-up sharecapital of the Company during the year under review.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public within the meaning ofprovision of NonBanking Financial Companies acceptance of public deposits (reserve banks)direction 1998.

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

DIRECTORATE/KMP

Mr. Deepak Patel (DIN: 00081100) Director of the Company is liable to retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

During the year Mr. Kirit Dalal (DIN: 00509921) one of the Director of the Companyhas passed away on 29th December 2019. The Board places on record their deep sense ofgratitude for the devotion and commitment towards the Company business and its growth.

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.

Effective from 01st April 2019 the Board has appointed Mr. Shailesh Bharvad a memberof the Institute of Company Secretaries of India as Company Secretary and ComplianceOfficer on the recommendation of Nomination and Remuneration Committee. Further in termsof the provisions of Regulation 16(1 )(b) of Securities And Exchange Board of India(Listing Obligations And Disclosure Requirements) Regulations 2015 and Provisions ofSection 149(10) of the Companies Act 2013 the Board seek consent of the members of theCompany for re-appointment of Mrs. Mrudulaben Patel as non-executive independent Directorof the Company for second term of five years w.e.f. 26th September 2020 to avail herexpertise and for the immense benefit to the Company.

As on 31st March 2020 Mr. Deepak Patel Managing Director Mr. Devang Shah ChiefFinancial Officer and Mr. Shailesh Bharvad Company Secretary of the Company are KeyManagerial Personnel of the company.

All the Directors of the Company have confirmed that they are not disqualified frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013 and notdebarred or disqualified by the SEBI / Ministry of Corporate Affairs or any such statutoryauthority from being appointed or continuing as Director of the Company or any otherCompany where such Director holds such position in terms of Regulation 34(3) and ScheduleV Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015) (10)(i) of Part C of Schedule V of Listing Regulations.

CORPORATE GOVERNANCE

As per regulation 27(2) of the SEBI Listing Obligations and Disclosure RequirementsRegulations 2015 your Company was required to implement the code of CorporateGovernance. Accordingly your Company has complied in all material respects with thefeatures of the said code. The Report on Corporate Governance for the year under reviewis placed in a separate section forming part of the Annual Report (refer page no. 39)

DIRECTORS' RESPONSIBILITY STATEMENT:

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.

SECRETARIAL STANDARDS:

The Company has complied with applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India.

LISTING AGREEMENT WITH STOCK EXCHANGES:

Pursuant to the provisions of listing agreement with stock exchanges the equity sharesof the Company are listed at Mumbai stock exchange. The company has not renewed orexecuted any listing agreement as per new regulations of SEBI.

DEPOSITORY SYSTEM

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 Board would like to bring to your notice that in terms of amended regulation 40 ofthe SEBI [LODR] Regulations 2015 vide notification dated 8th June 2018 and in terms ofcircular of BSE Limited dated 5th July 2018 effective from December 5 2018 all shareswhich are lodged for transfer shall be transferred in dematerialized form only. Hencethose members who have yet not dematerialized their shares are hereby requested todematerialize the same as early as possible.

AUDITORS AND AUDITORS REPORT

The Company had appointed M/s. Arpit Patel & Associates (Firm name changed fromPruthvi Shah & Associates to Arpit Patel & Associates) Chartered Accountants(Firm Reg. No. 144032W) as Statutory Auditors of the Company at the 24th Annual GeneralMeeting till the conclusion of 29th Annual General Meeting in compliance with theprovision of Section 139[1 ] of the Companies Act 2013. The Company had received acertificate from M/s. Arpit Patel & Associates in accordance with the provisions ofSection 141 of the Companies Act 2013.

The Report given by the Auditors on the financial statement of the Company is part ofthis Report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

SECRETARIAL AUDIT

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 Secretary in practice to undertake the secretarialaudit of the Company. The Secretarial Audit Report is annexed herewith as 'Annexure"A". There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

CORPORATE SOCIAL RESPONSIBILITY [CSR]

Due to sad demise of Mr. Kiritkumar Dalal the Board of Directors of the Company hasre-constituted Corporate Social Responsibility Committee at their meeting held on 13thFebruary 2020. The re-constituted Committee comprises of Mr. Bharat Amin as ChairmanMrs. Mrudulaben Patel Mr. Sunil G. Patel and Mr. Deepak Patel as other members of theCommittee.

The contents of the CSR Policy of the Company as approved by the Board on therecommendation of the CSR Committee is available on the website of the Company.

During the financial year 2019-20 Rs. 16.00 Lakhs has been spent towards CSR expenses.The Annual Report on CSR activities undertaken by the Company during the financial year2019-20 is annexed as 'Annexure "B" and forms part of this Report.

NOMINATION AND REMUNERATION COMMITTEE

Due to sad demise of Mr. Kiritkumar Dalal the Board of Directors of the Company hasre-constituted Nomination and remuneration Committee at their meeting held on 13thFebruary 2020 The re-constituted Nomination and remuneration Committee comprises of Mr.Bharat Amin as Chairman Mrs. Mrudulaben Patel and Mr. Sunil G. Patel as other members.The role and responsibilities Company's policy on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other related matters are in conformity with the requirements of theCompanies Act 2013 and SEBI [Listing Obligations and Disclosure Requirements]Regulations 2015.

MEETING OF THE BOARD & AUDIT COMMITTEE

Due to sad demise of Mr. Kiritkumar Dalal the Board of Directors of the Company hasre-constituted Audit Committee at their meeting held on 13th February 2020. There-constituted Audit Committee comprises of Mr. Bharat Amin as Chairman Mrs. MrudulabenPatel Mr. Sunil G. Patel and Mr. Deepak Patel as other members. The scope of AuditCommittee is in accordance with the Companies Act 2013 and SEBI [Listing Obligations andDisclosure Requirements] Regulations 2015. The Board of Directors and members of AuditCommittee during the financial year 2019-20 met five times.

STAKEHOLDERS RELATIONSHIP/INVESTOR GRIEVANCES COMMITTEE

Due to sad demise of Mr. Kiritkumar Dalal the Board of Directors of the Company hasre-constituted Stakeholders Relationship/Investor Grievances Committee at their meetingheld on 13th February 2020. The re-constituted Stakeholders Relationship/InvestorGrievances Committee comprises of Mr. Bharat Amin as Chairman Mrs. Mrudulaben Patel Mr.Sunil G. Patel and Mr. Deepak Patel as other members in accordance with the CompaniesAct 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations 2015.

EVALUATION OF BOARD COMMITTEE AND DIRECTORS

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 Boardby way of structured questionnaire and directors were satisfied with the evaluationprocess. The performance evaluation of the Independent Directors was carried out by theentire Board. The Directors expressed their satisfaction with the evaluation process. Theperformance of the Board and that of its committees was evaluated on the basis of variousparameters like adequacy of Composition Board Culture Execution and performance ofspecific 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.

DISCLOSURE OF REMUNERATION RATIO

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 "C" to this report.

ANNUAL RETURN

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

During the year under Report there were no Employees covered by Section 197 of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

PARTICULARS OF LOANS AND INVESTMENTS

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.

RELATED PARTY TRANSACTIONS

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 27 of this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

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.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and the company hasin place a Policy for prevention of Sexual Harassment at the Workplace in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. The Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. The following is asummary of sexual harassment complaints received and disposed of during the year:

(a) Number of complaints pending at the beginning of the year: Nil

(b) Number of complaints received during the year: Nil

(c) Number of complaints disposed off during the year: NA

(d) Number of cases pending at the end of the year: Nil

VIGIL MECHANISM/WHISTLE BLOWER POLICY

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

GREEN INITIATIVE

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.

RISK MANAGEMENT POLICY

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.

REMUNERATION POLICY

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.

CODE OF CONDUCT

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.

ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATERS OR COURTS OR TRIBUNALS

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

ACKNOWLEDGEMENT

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.

FOR AND ON BEHALF OF THE BOARD
Sd/-
KIRAN PATEL
CHAIRMAN
DIN: 00081061
Place: Nadiad
Dated: 30th June 2020

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