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CSL Finance Ltd.

BSE: 530067 Sector: Financials
NSE: N.A. ISIN Code: INE718F01018
BSE 00:00 | 11 Oct 241.45 -19.55
(-7.49%)
OPEN

250.05

HIGH

263.95

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239.00

NSE 05:30 | 01 Jan CSL Finance Ltd
OPEN 250.05
PREVIOUS CLOSE 261.00
VOLUME 4682
52-Week high 424.75
52-Week low 236.25
P/E 5.84
Mkt Cap.(Rs cr) 149
Buy Price 250.05
Buy Qty 20.00
Sell Price 264.00
Sell Qty 50.00
OPEN 250.05
CLOSE 261.00
VOLUME 4682
52-Week high 424.75
52-Week low 236.25
P/E 5.84
Mkt Cap.(Rs cr) 149
Buy Price 250.05
Buy Qty 20.00
Sell Price 264.00
Sell Qty 50.00

CSL Finance Ltd. (CSLFINANCE) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 27th Annual Report along with theAudited financial statements of the Company for the financial year ended 31 March 2019.st

1. FINANCIAL HIGHLIGHTS

(in Cores)
Particulars Current Year Previous Year
31-03-2019 31-03-2018
Revenue from operations 59.50 41.36
Other Income 0.20 0.10
Total Income 59.70 41.46
Less: Operating expenses 11.57 9.20
Profit/ loss before 48.13 32.26
Depreciation Finance cost
and Tax expenses
Less: Depreciation 0.24 0.15
Less: Finance Costs 11.92 6.32
Less: Tax Expense 10.85 7.70
(Current & Deferred)
Profit /Loss for the year 25.15 18.08
Less: Transfer to reserves 5.03 3.62
Less: Dividend 0.18 0.09
Distribution tax
Balance carried forward 19.94 14.37

During the year under review the total revenue of the Company was र5970.27 lakhs ascompared to र4146.18 lakhs during the previous year an increase of 43.99% while theProfit After Tax was र2515.49 lakhs as compared to र1807.76 lakhs of the previous yearan increase by 39.15%.

Further the financial summary of the company has been detailed in the ManagementDiscussion and Analysis Report forming part of the report.

First-time adoption of Ind AS

In accordance with the Companies (Indian Accounting Standards) Rules 2015 of theCompanies Act 2013 read with Section 133 of the Companies Act 2013 (‘Act') theCompany will be adopting the Indian Accounting Standards (Ind AS) for preparation of itsfinancial statements with effect from 1 April 2019. st

2. DIVIDEND

The directors recommend for consideration of the members at the ensuing Annual GeneralMeeting payment of dividend of 20% per equity share i.e. र2 per equity share of the facevalue of र10/- each for the financial year 2018-19. The dividend on equity shares ifapproved by the shareholders at the 27th AGM would amount to र1.48 crores (inclusive ofdividend distribution tax amount of र0.25 crores) and will be paid to those members whosenames appear on the register of members of the Company as on 23 September 2019. rd

3. TRANSFER TO RESERVES

The company proposes to transfer र5.03 Crores to Statutory Reserves in accordance withthe provisions of the Reserve Bank of India.

4. CAPITAL ADEQUACY

Capital Adequacy as at 31 March 2019 stood at st healthy 65.53% which is well abovethe Minimum regulatory norms for non-deposit accepting NBFCs.

5. CREDIT RATING

During FY 2018-19 CARE Ratings Limited (‘CARE') reaffirmed its ratings on theCompany's long term bank facilities at CARE BBB; Stable.

6. BORROWING

During the year under review your company raised a total of र25 crores from banks andfinancial institutions. As on 31 March 2019 the borrowings st of the company stand atर121.34 crores. No interest payment or principal repayment of the loan facilities availedby your company from banks/financial institutions was due and unpaid as on 31st March2019. The assets of the company which are available by way of security are sufficient todischarge the claims of the banks and Financial Institutions as and when they become due.

7. SHARE CAPITAL

During the year under review 100000 convertible warrants were converted intoequivalent equity shares.

8. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulatedin Regulation 34 of the Listing Regulations 2015 is annexed to this Report.

9. CORPORATE GOVERNANCE

Your Company complies with the provisions laid down in Corporate Governance laws. Itbelieves in and practices good corporate governance. The Company maintains transparencyand also enhances corporate accountability. In terms of regulation 34 of ListingRegulations read with Schedule V the following forms part of this Report: a. Declarationregarding compliance to Code of Conduct by Board Members and Senior Management Personnel;b. A certificate from a Practicing Company Secretary that none of the directors on theBoard of the Company have been debarred or disqualified from being appointed or continuingas directors of companies by the Board/Ministry of Corporate Affairs or any such statutoryauthority; c. Report on the Corporate Governance and Auditors' Certificate regardingcompliance of conditions of Corporate Governance.

10. DEPOSITS

Being a non-deposit taking Company your Company has not accepted any deposits from thepublic within the meaning of the provisions of the Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions 2016 and provisions of CompaniesAct 2013.

11. RBI GUIDELINES

The Company continues to comply with all the regulations prescribed by the Reserve Bankof India from time to time.

12. SUBSIDIARIES COMPANIES JOINT VENTURES

AND ASSOCIATES

The Company has no Subsidiary Company or Associate Company. The Company has not enteredinto any joint venture.

13. NUMBER OF MEETINGS OF THE BOARD

The Board met 14 times in the Financial Year 2018-19 viz. 16 April 2018 23 May 201829 May 2018 th rd th 15 June 2018 7 August 2018 27 August 2018 th th th 22 October2018 26 October 2018 12 November nd th th 2018 1 January 2019 31 January 2019 1 Marchst st st 2019 16th March 2019 & 30th March 2019. The maximum time interval betweenany two meetings did not exceed 120 days.

14. COMMITTEES OF THE BOARD

The details of all the Committees of the Board along with their charters compositionand meetings held during the year are provided in the Report on Corporate Governancewhich forms part of this Annual Report. The Board has accepted all the recommendations ofthe Audit Committee.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31 March 2019 the Board of your Company st consists of following Directors andKey Managerial Personnel.

Name Category
Mr. Rohit Gupta Managing Director
(Executive Promoter Director)
Mr. Ashok Kumar Non-executive Promoter Director
Kathuria
Mr. Manoj Gupta Non-executive Independent Director
Ms. Anjna Mittal Non-executive Independent Director
Mr. Naresh Chief Financial Officer
Chandra Varshney
Mr. Akash Gupta Company Secretary and Legal Head

The composition of the Board is as per the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. All the Directors are havingvast knowledge and experience in their relevant fields and the Company has benefittedimmensely by their presence in the Board. a) Directors APPOINTMENT

During the financial year none of the directors were appointed.

RETIREMENT BY ROTATION

In accordance with the provisions of the Companies Act 2013 and Regulation 36 of theListing Regulations Mr. Ashok Kumar Kathuria (DIN: 01010305) retires at the ensuing AGMand being eligible offers himself for re-appointment. The brief resume/details relating toDirector who is to be reappointed is furnished in the Notice of the ensuing AGM. The Boardof Directors of your Company recommends the reappointment of the Director liable to retireby rotation at the ensuing AGM.

RESIGNATION

During the financial year none of the director resigned from the directorship of thecompany.

INDEPENDENT DIRECTORS

The Company has received declarations pursuant to Section 149(7) of the Companies Act2013 from all the Independent Directors of the Company confirming that they meet thecriteria of independence as prescribed both under Section 149(6) of the Companies Act2013 and in terms of Regulation 16 of Listing Regulations.

WOMAN DIRECTOR

In terms of the provisions of Section 149 of the Companies Act 2013 and Regulation 17(1) (a) of the SEBI (LODR) Regulations 2015 the Company shall have at least one WomanDirector on the Board. Your Company has Ms.Anjna Mittal as the Woman Director on theBoard of the Company. b) Key Managerial Personnel

In accordance to the provisions of Companies Act 2013 the following persons are theKMPs of the Company as recorded by the Board as on 31 March 2019: st Mr.RohitGupta :ManagingDirector Mr.NareshChandra : Chief Financial Officer Varshney Mr.AkashGupta :Company Secretary & Legal Head c) Changes in Key Managerial Personnel (KMP) duringthe FY 2018 - 19

Duringtheyearunderreviewnochangesinthekey managerialpersonnelwerethereinthecompany.

16. PERFORMANCE EVALUATION

Pursuanttotheprovisionsofsection134(3)(p)ofthe Companies Act 2013 and Schedule IV ofthe Companies Act 2013 and in accordance to Regulation 17(10) of the Listing Regulations2015 the Board has carried out the annual performance evaluation of the Board as a wholevarious Committees of the Board and of the Directors. A structured questionnaire wasprepared after taking into consideration the inputs received from the Directors coveringvarious aspects of functioning mechanism of the Board and Committee. The performanceevaluation of the Independent Directors was carried out by the entire Board. The Directorsexpressed their satisfaction with the evaluation process. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Reportannexed to this Report.

17. RELATED PARTY TRANSACTIONS

During FY 2018-2019 the Company entered into transactions with related partiespursuant to approval of the Audit Committee. The details of such transactions were placedbefore the Committee for noting/review. All related party transactions entered into duringFY 2018-19 were on an arm's length basis and in the ordinary course of business under theCompanies Act 2013 and not material under Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (the Listing Regulations) andhence did not require members' prior approval under the Companies Act 2013 and theListing Regulations. During FY 2018-19 there were no related party transactions requiringdisclosure under section 134 of the Companies Act 2013. A policy on materiality ofrelated party transactions and dealing with related party transactions is placed on theCompany's website https://www.cslfinance.in.

18. FRAUD REPORTING

During the year under review neither the Statutory Auditor nor the Secretarial Auditorhas reported to the Audit Committee under Section 143(12) of Companies Act 2013 anyinstances of fraud committed against the Company by its officers or employees the detailsof which needs to be mentioned in the Board's Report.

19. BOARD'S INDEPENDENCE

The definition of ‘Independence' of Directors is derived from Section 149(6) ofthe Companies Act 2013. Based on the confirmation/disclosures received from the Directorsand on evaluation of the relationships disclosed the following Non-Executive Directorsare Independent in terms of Listing

Regulations 2015 and Section 149(6) of the CompaniesAct2013:-i.Ms.AnjnaMittal(DIN:07143461) ii. Mr.ManojGupta(DIN:01160953)

20. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors' ofthe company meet with the criteria of their independence laiddowninSection149(6)oftheCompaniesAct2013.

21. FAMILIARISATION PROGRAMME

IncompliancewiththerequirementofRegulation25ofListingRegulationstheCompanyhasputinplace a familiarization programme for theIndependent Directors to familiarise them about the Company and their roles rightsresponsibilities in the Company. The details of the familiarisation programme areexplained in the Corporate GovernanceReport.Thesameisalso availableonthewebsiteoftheCompanyi.e.www.cslfinance.in.

22. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief your Directors make the following statementsin terms ofSection134(5)oftheCompaniesAct2013: a.inthepreparationoftheannualaccountsforthe year ended 31st March 2019 the applicableaccounting standards have been followed along with proper explanation relating to materialdeparturesifany; b. that such accounting policies as mentioned in the notes to the annualaccounts have been selectedandappliedconsistentlyandjudgments and estimates have been madethat are reasonable and prudent so as to give a true andfairviewofthestateofaffairsofthecompanyas at 31st March 2019 and profit and loss of thecompanyfortheyearendedonthatdate; c. that proper and sufficient care has been taken forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; d. that the annual accounts have been prepared on a going concernbasis; e. that proper systems to ensure compliance with the provisions of all applicablelaws are in place and that such systems are adequate and operating effectively; f. thatproper internal financial controls are in place and that such internal financial controlsare adequate and operating effectively.

23. SIGNIFICANT & MATERIAL ORDERS PASSED BY

THE REGULATORS

No significant or material order was passed by the Regulators or Court or Tribunalwhich impact the going concern status operations of the Company in future.

24. NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of Nomination and Remuneration/CompensationCommittee framed a policy on directors' appointment and remuneration of Directorsincluding criteria for determining quali?cation positive attributes independence ofdirectors and remuneration for Directors Key Managerial Personnel and other employeeswhich is available on the Company's website i.e. www.cslfinance.in.

25. SECRETARIAL STANDARDS OF ICSI

The company is compliant with all the secretarial standards in place.

26. PARTICULARS OF LOANS GUARANTEES OR

INVESTMENTS

Details of loans guarantees and investments are given in the notes to the FinancialStatements.

27. PARTICULARS OF CONTRACTS OR

ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188

During the year under review the contracts or arrangements with related parties havebeen on arm's length and in ordinary course of business and they were not material innature. Accordingly the particulars of the transactions as prescribed in Form AOC-2 ofthe rules prescribed under Chapter IX relating to Accounts of Companies under theCompanies Act 2013 are not required to be disclosed as they are not applicable.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT

OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance towards sexual harassment of women at the workplace. TheCompany has in place a policy on prevention prohibition and redressal of SexualHarassment of Women at Workplace and an Internal Complaints Committee in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and rules made thereunder for reporting and conducting inquiry intothe complaints made by the victim on the harassments at the work place. The functioning ofthe Committee were carried out as per letter and spirit contained in the provisions of theAct. During the FY 2018-2019 the Company has not received any complaint of sexualharassment and hence there were no complaints pending for redressal as on 31 March 2019.The Company had st conducted four workshops/awareness programs regarding women empowermentduring the period under review.

29. FAIR PRACTICE CODE (FPC)

The Company has in place a Fair Practice Code approved by the Board in compliance withthe guidelines issued by the RBI to ensure better service and provide necessaryinformation to customers to take informed decisions. The FPC is posted on the website ofthe Company. The FPC is also reviewed by the Board at frequent intervals to ensure itslevel of adequacy and appropriateness.

30. STATUTORY AUDITORS & THEIR REPORT

M/s. Aggarwal & Rampal Chartered Accountants were appointed as Statutory Auditorsof your Company at the Twenty Fifth Annual General Meeting (AGM) held on 5 September2017 from th the conclusion of the 25th AGM till conclusion of 30 Annual General Meetingas per the provisions th of Companies Act 2013 read with rules made thereunder.

The Auditor's Report does not contain any qualification reservation or adverse remark.

31. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company had appointed Mr. Sanjay Kumar Practicing Company Secretary toundertake the Secretarial Audit of the Company for the Financial Year 2018-19. TheSecretarial Audit Report for Financial Year 2018-19 has been appended as Annexure to thisReport.

32. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedto this Directors' Report.

33. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of Directors of the company had constituted the Corporate SocialResponsibility (CSR) Committee in accordance with Section 135 of Companies Act 2013 readwith rules formulated therein. The CSR Policy of the Company has been annexed to thisReport.

34. THE STATE OF THE COMPANY'S AFFAIRS

During the year under review the performance of the company has been good even despitethe challenges in the operating environment. The company continues to run a loan book withan excellent portfolio quality. Though credit growth is yet to pick up going ahead thecompany sees ample opportunities in the secured lending segment and is looking to scale upits loan book in the years to come.

35. CHANGE IN THE NATURE OF BUSINESS IF ANY

There has been no change in the nature of business of the company during the FinancialYear 2018-19.

36. MEETING OF INDEPENDENT DIRECTORS

During the year under review the Independent directors in their meeting held on 30March 2019 th reviewed the performance of Non-Independent Directors the Board as a wholeand also assessed the quality quantity and timelines of flow of information between thecompany management and the Board in line with the requirement of Listing Regulations 2015read with applicable provisions of Schedule IV of the Companies Act 2013.

37. VIGIL MECHANISM/WHISTLE BLOWER POLICY

Your Company has established a ‘Whistle Blower Policy and Vigil Mechanism' fordirectors and employees to report to the appropriate authorities concerns about unethicalbehavior actual or suspected fraud or violation of the Company's code of Conduct. Thesaid policy has been uploaded on the website of the Company at www.cslfinance.in. ThePolicy provides for adequate safeguards against victimisation of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committee.

38. MATERIAL CHANGES AND COMMITMENTS

AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The company has stepped into few more states this year and has a total of 18 branchesacross whole India as on 31 March 2019. st

The company has registered its name under the Trade Marks Act 1999 and has receivedthe Certificate of Registration of Trade Mark under Section 23 (2) Rule 56 (1) dated14.02.2019.

During the year under review the company successfully implemented a lending software‘FinnOne Neo' to maintain the MIS and database of our retail ending and hence beingused for carrying out crucial business decision making.

39. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON

RESEARCH AND DEVELOPMENT FOREIGN EXCHANGE INFLOW/OUTFLOW ETC.

The requirements of disclosure with regard to Conservation of Energy in terms ofSection 134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014are not applicable to the Company since it doesn't own any manufacturing facility.

40. RISK MANAGEMENT POLICY AND INTERNAL

CONTROL

The Company has adopted a Risk Management Policy to identify assess monitor andmitigate various risks to its key business objectives. Major risks if any identified aresystematically addressed through corrective measures on a continuing basis. The Company'sinternal control systems are commensurate with the nature of its business and the size andcomplexity.

41. INVESTOR EDUCATION & PROTECTION FUND (IEPF)

During the year 2018-19 no amount was transferred to the investor education andprotection fund (IEPF).

42. CSL EMPLOYEE STOCK OPTION SCHEME 2016

A. The ESOS Scheme titled "CSL Employee Stock options Scheme 2016" (CSL ESOS2016) was approved by the shareholders on 30.09.2016.

700000 options are covered under the CSL ESOS 2016.

B. During the financial year 2018-19 90000 options were vested and 165000 equityshares were allotted. However 90000 options were lapsed during the financial year 2018-19and no fresh options were granted during the year. C. The applicable disclosure asstipulated under the SEBI (Share Based Employee Benefits) Regulations 2014 and anyamendments thereof as on 31 March 2019 with regard to employees st stock options schemeis put up on the website of the Company at www.cslfinance.in.

D. The company has received a certificate from the auditors of the Company that thescheme has been implemented in accordance with the SEBI guidelines and the resolutionspassed by the members.

43. DISCLOSURE PURSUANT TO RULE 5 OF

COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 Ratio ofRemuneration of each director to the median remuneration of the employees for thefinancial year:

The remuneration is paid by company to Mr. Rohit Gupta Managing Director of thecompany. No other director was paid any remuneration during the year. The ratio of theremuneration of Mr. Rohit Gupta to the median employee's remuneration is as follows:Median Employee's Remuneration : र300000/-Annual Salary of the : र8400000/-ManagingDirector Ratio (remuneration of MD: remuneration of median employee) : 0.035:1 Percentageincrease in remuneration of each director Chief Financial officer chief Executive

Officer Company Secretary or Manager if any in the Financial year:

Percentage increase in remuneration of each director Chief Financial Officer ChiefExecutive Officer Company Secretary or Manager if any in the Financial year:

Name of Director /KMP Designation Ratio to median remuneration %increase in remuneration
Rohit Gupta Managing Director 0.035:1 Nil
Naresh Chandra Chief Varshney Financial Officer 0.021:1 54.50
Akash Gupta Company Secretary & Legal Head 0.108:1 105

Percentage increase/decrease in the median remuneration of employees in the financialyear:

The percentage decrease in the median remuneration of employees in the financial year2018-19 is 1.35%

Number of permanent employees on the rolls of company at the end of the year:

143 permanent employees are on the roll of the company at the end of the financial year2018-19.

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

There has been no increase in the managerial remuneration during the financial yearunder review. Therefore there were no exceptional circumstances and hence nojustification required for the same.

Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company is in compliance with its remuneration policy. The company has in place theNomination and Remuneration Committee to monitor the same.

44. APPRECIATION

Your Directors would like to record their appreciation for the hard work and commitmentof the Company's employees and warmly acknowledge the unstinting support extended by itsbankers alliance partners and other stakeholders in contributing to the results. And lastbut not the least we put our sincere thanks to the shareholders for the confidence reposedby them in the company and looking forward to have the same support in the coming time.

45. CAUTIONARY STATEMENT

Statements in the Board's Report and Management Discussion and Analysis describing theCompany's objectives outlook opportunities and expectations may constitute "ForwardLooking Statements" within the meaning of applicable laws and regulations. Actualresults may differ from those expressed or implied expectations or projections amongothers. Several factors make a significant difference to the Company's operationsincluding the government regulations taxation and economic scenario affecting demand andsupply natural calamity and other such factors over which the Company does not have anydirect control.

For on & behalf of the Board
Sd/- Sd/-
Rohit Gupta Ashok Kumar Kathuria
Managing Director Director
(DIN:00045077) (DIN: 01010305)
Place: New Delhi
Date: 27 August 2019 th