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Emerald Leasing Finance And Investment Co Ltd.

BSE: 538882 Sector: Financials
NSE: N.A. ISIN Code: INE030Q01015
BSE 00:00 | 11 Jun 16.20 0.75
(4.85%)
OPEN

16.15

HIGH

16.20

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16.15

NSE 05:30 | 01 Jan Emerald Leasing Finance And Investment Co Ltd
OPEN 16.15
PREVIOUS CLOSE 15.45
VOLUME 104314
52-Week high 21.06
52-Week low 4.51
P/E 67.50
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 16.15
CLOSE 15.45
VOLUME 104314
52-Week high 21.06
52-Week low 4.51
P/E 67.50
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Emerald Leasing Finance And Investment Co Ltd. (EMERALDLEASING) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting before you their 37th AnnualReport together with the Audited Accounts of the Company for the year ended 31stMarch 2020.

FINANCIAL RESULTS:-

The standalone financial results of the Company for the year under review aresummarized for your consideration:

Particulars 2019-2020 (Amount in Lacs) 2018-2019 (Amount in Lacs)
Gross Income 180.72 112.75
Expenses 107.58 65.26
Profit Before Depreciation and Tax 73.14 47.49
Depreciation 1.27 0.23
Net Profit Before Tax 71.87 47.26
Provision for Tax 13.94 12.54
Net Profit After Tax 57.93 34.72
Basic EPS 0.64 0.38
Diluted EPS 0.64 0.92

STATE OF COMPANY'S AFFAIRS/ BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THEYEAR/HIGHLIGHTS/OPERATIONS

As the Company has been granted NBFC License by RBI Emerald is focused mainly ongiving loans to credit worthy SMEs.

Company has elaborate system of vetting any loan proposal. Whereby we study thefinancials past track records and promoter's credibility. We have granted loans rangingfrom 5 Lakhs onwards.

Our Current Loan Portfolio is performing very well.

As the Promoters of the Company are into financial services from last 21 years theyhave wide knowledge about credit worthiness of various clients.

Company is also in syndication of big tickets loans for various financial institutions.Last Year we have earned a revenue of INR 4762943/- through syndication business only.

We have floated a subsidiary by the name of Eclat Net Advisors Private Limited in March2015. The Company acts as Direct Selling Agent for various financial institutions panIndia.

DIVIDEND :-

Your Directors have recommended dividend of Rs. 0.25 per share in the current financialyear.

RESERVE:

Entire amount of Net Profit has been transferred to Profit and Loss Surplus accountwhich appears under the head "Reserves and Surplus." An amount of 11.59 Lakhshas been transferred to Statutory Reserve Fund u/s 45 IC @20% .

DIRECTORS:-

In accordance with the provisions of the Companies Act 1956 and Articles ofAssociation of the Company Mr. Sanjay Aggarwal (DIN 02580828) Director of the Companyretire by rotation in the ensuing Annual General Meeting and being eligible offer himselffor re-appointment.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have given declarations that they meet thecriteria of Independence as laid down under Section 149 (6) of the Companies Act 2013 andRegulation 25 of SEBI (LODR) Regulations.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:

Mr. Sanjay Aggarwal Managing Director
Mrs. Anubha Aggarwal Non-executive Non- Independent Director Member
Ms. Sheetal Kapoor Chief Financial Officer
Mrs. Anju Sharma Company Secretary

SHARE CAPITAL

The Company has increased its Authorised Share Capital from Rs. 110000000 to Rs.350000000/- by adding 24000000 Equity Shares of Rs. 10/- each during the year underreview. The paid up share capital of the company is Rs. 90436500/- for the period endedMarch 31 2020. The company has also taken permission to issue shares by way of rightissue upto Rs. 100 crores in the EGM held on 08.04.2019.

- The Company has not bought back any of its securities during the year under review.

- The Company has not issued any Sweat Equity Shares during the year under review.

- No Bonus Shares were issued during the year under review.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

Your Company has zero tolerance policy in case of sexual harassment at workplace and iscommitted to provide a healthy environment to each and every employee of the company. TheCompany has in place "Policy for Prevention and Redressal of Sexual Harassment"in line with the requirements of sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (hereinafter referred to as ‘the said Act') andRules made there under. As per the provisions of Section 4 of the said Act the Board ofDirectors has constituted the Internal Complaints Committee (ICC) at the RegisteredOffice Works to deal with the Complaints received by the company pertaining to genderdiscrimination and sexual harassment at workplace.

Further as per the provisions of Section 21& 22 of the aid Act the Report indetails of the number of cases filed under Sexual Harrasement and their disposal for thefinancial year under review is as under:

. No. of cases pending as on the No beginning of the financial year under review No. of complaints filed during the financial year under review No. of cases pending as on the end of the financial year under review
1. NIL NIL NIL

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

No events have been occurred subsequent to the date of financial results.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

There has been no material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year to which this financialstatements relate and on the date of this report for the period ended March 31 2020.

MAJOR CHANGES HAPPENING DURING THE FINANCIAL YEAR

Your Directors wish to inform that there have not been any changes during the FinancialYear under review: a. In the nature of Company's business b. Generally in the class ofbusiness in which the Company has an interest.

LISTING AND LISTING REGULATIONS :-

The equity shares of the company are listed on the Bombay Stock Exchange (BSE). Duringthe year Company executed Uniform Listing Regulations in accordance with the requirementsof SEBI circular DCS/ COMP/12/2015-16 dated October 13 2015 with BSE Limited. TheCompany has also formulated the new Policies as required under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

The company is regular in paying the listing fee.

INSIDER TRADING:

The Board of Directors has adopted The Code Of Conduct For Prevention Of InsiderTrading in accordance with the requirements of the SEBI (Prohibition of Insider Trading)Regulations 2015. The Insider trading policy of the company lays down guidelines andprocedures to be followed and disclosures to be made while dealing with shares of theCompany as well as the consequences of violation.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The requisite information has been given by way of an Annexure D-1 to this Report.

CORPORATE GOVERNANCE:-

Though the provisions of corporate governance are not applicable to the company butYour Company is still committed to maintain the highest standards of Corporate Governance.A copy of corporate governance is attached as annexure D-10.

BUSINESS RESPONSIBILITY REPORT

Regulation 34 (2) (f) the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is not applicable to the Company.

POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION

Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the CompaniesAct 2013 the policy on appointment of Board members including criteria for determiningqualifications positive attributes independence of a Director and the policy onremuneration of Directors KMP and other employees is attached as Annexure D-2 whichforms part of this report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Management Discussion & Analysis Report for the year under review as stipulatedunder Part B of Schedule V to the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 is presented in a separate section asAnnexure D-3 forming part of this Annual Report.

PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES:-

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the CompaniesAct 2013 the Report and Accounts are being sent to the Members and others entitledthereto excluding the information on employees' particulars which is available forinspection by the Members at the Registered Office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining a copy thereof such Member may write to the CompanySecretary in this regard. The details under Section 197 (12) of the Companies Act 2013read with Rules 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given as Annexure D-4.

NUMBER OF MEETINGS OF BOARD

During the year 2019-20 6 Board Meetings were held including one meeting ofIndependent Directors on the following dates:.

Date of Board Meeting No. of Directors Present
29.05.2019 4 4
14.08.2019 4 4
14.11.2019 4 4
15.11.2019 4 3
14.02.2020 4 4
14.02.2020 (Ind. Director Meeting) 2 2

PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations with Stock Exchanges the Board in consultation with its Nomination &Remuneration Committee has formulated a framework containing inter-alia the criteriafor performance evaluation of the entire Board of the Company its Committees andIndividual Directors including Independent Directors. Accordingly following is thecriteria for evaluation:-

a. Criteria for evaluation of the Board of Directors as a whole:

i. The Frequency of Meetings

ii. Quantum of Agenda

iii. Administration of Meetings

iv. Flow and quantity of Information from the Management to the Board

v. Number of Committees and their role.

vi. Overall performance of the Company

b. Criteria for evaluation of the Individual Directors including Independent Directors;

i. Experience and ability to contribute to the decision making process

ii. Problem solving approach and guidance to the Management

iii. Attendance and Participation in the Meetings

iv. Personal competencies and contribution to strategy formulation

v. Contribution towards statutory compliances monitoring of controls and CorporateGovernance

The Independent Directors had met separately on 14.02.2020 without the presence ofNon-Independent Directors and the members of management and discussed inter-alia theperformance of non-Independent Directors and Board as a whole and the performance of theChairman of the Company after taking into consideration the views of Executive andNon-Executive Directors.

The Nomination and Remuneration Committee has also carried out evaluation of everyDirector`s performance. The performance evaluation of all the Independent Directors havebeen done by the entire Board excluding the Director being evaluated. On the basis ofperformance evaluation done by the Board it shall be determined whether to extend orcontinue their term of appointment whenever the respective term expires. The Directorsexpress their satisfaction with the evaluation process.

STATUTORY AUDITORS & AUDITORS REPORT:-

M/s K. Singh & Associates Chartered Accountants Chandigarh was appointed asStatutory Auditors of the Company in the last Annual General Meeting to hold office tillthe conclusion of Annual General Meeting to be held in the year 2022.

The Auditors' Report being self-explanatory requires no comments from the Directors.Further there are no reservations qualifications or adverse remarks in the Audit Reportgiven by them in respect of the Financial Year 2019-20.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Kanwaljit Singh (M. No. 5901) a Company Secretary in practice having CP no. 5870was appointed as Secretarial Auditor of the Company for the financial year 2019-20pursuant to Section 204 of the Companies Act 2013. The Secretarial Audit Report submittedby him in the prescribed form MR- 3 is attached as Annexure D-5 and forms part of thisreport.

FRAUDS REPORTED BY AUDITORS

There are no frauds reported by auditors under sub-section (12) of section 143including those which are reportable to the Central Government.

COST AUDIT

As per the Cost Audit Orders Cost Audit is not applicable to the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statementspursuant to Section 129(3) of the Companies Act 2013 (Act) and SEBI Listing Regulationsand prepared in accordance with the Accounting Standards prescribed by the Institute ofChartered Accountants of India in this regard.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

As required pursuant to provisions of section 134(1) (e) of the Act the Company has awell placed proper and adequate internal financial control system commensurate with thesize scale and complexity of its operations. The scope and authority of the internalAudit function is well defined in the Organization. The internal financial control systemensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT

The Company has in place comprehensive risk assessment and minimization procedureswhich are reviewed by the Board periodically. During the year as per the requirements ofListing Agreement with the Stock Exchanges a Risk Management Committee was constituted bythe Board of Directors with responsibility of preparation of Risk Management Policyreviewing and monitoring the same on regular basis to identify and review critical riskson regular basis The risks faced by the Company and their minimization procedures areassessed by the Board. Further the Company identifies risks and control systems areinstituted to ensure that the risks in each business process are mitigated. The Boardprovides oversight and reviews the Risk Management Policy on a regular basis. In theopinion of the Board there has been no identification of elements of risk that maythreaten the existence of the Company.

SUBSIDIARIES/ASSOCIATES

The Company has a subsidiary M/s Eclat Net Advisors Pvt.Ltd.(CIN:U74140CH2015PTC035473) as defined in the Companies Act 2013. Report on theperformance and Financial position of the subsidiary in the specified format AOC-1 isannexed to the Directors' Report as Annexure D-6.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the Financial Year2019-20 in terms of Chapter V of the Companies Act 2013. Information in this regardtherefore is nil. There was no non compliance of provisions of chapter V of the CompaniesAct 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY`S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by anyRegulatory Authority Court or Tribunal which shall impact the going concern status andCompany`s operations in future.

CORPORATE SOCIAL RESPONSIBILITY

The Company is not covered under section 135 of Companies Act 2013 hence detailsregarding policy on Corporate Social Responsibility is not applicable to the Company.

AUDIT COMMITTEE

Your Directors wish to inform that in Compliance with Section 177 of the Companies Act2013 and Regulation 18 of Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 an audit committee has been duly constituted.The Audit Committee as on March 31 2020 comprises of the following Directors:

Mr. Raman Aggarwal Independent Director Chairman
Mr. Sanjay Aggarwal Managing Director Member
Mrs. Anubha Aggarwal Non - Executive Non-Independent Director Member

Details of the Audit Committee have been separately given in the corporate governancereport. Further all recommendations of Audit Committee were accepted by the Board ofDirectors.

NOMINATION & REMUNERATION COMMITTEE

In terms of Regulation 19 of Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 and pursuant to the provisions of section178 of the Companies Act 2013 Nomination & Remuneration Committee as on March 312020 comprises of the following Directors:

Mr. Deepak Gaur Independent Director Chairman
Mrs. Anubha Aggarwal Non-executive Non - independent Director Member
Mr. Raman Aggarwal Independent Director Member

The details of Remuneration Policy and the Committee are furnished in the Report onCorporate Governance which is annexed herewith.

STAKEHOLDERS RELATIONSHIP COMMITTEE

In terms of Regulation 20 of Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has constituted StakeholdersRelationship Committee with following composition as on 31.03.2020:-

Mrs. Anubha Aggarwal Non-executive Non - independent Director Member
Mr. Raman Aggarwal Independent Director Member
Mr. Sanjay Aggarwal Managing Director Member

The extract of Annual Return as on March 31 2020 in the prescribed Form No. MGT-9pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) of the Companies(Management and Administration) Rules 2014 is attached herewith as Annexure D-7 and formspart of this Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

Pursuant to Section 134(3)(g) of the Companies Act 2013 particulars of loansguarantees or investments under Section 186 of the Act as at end of the Financial Year2019-20 are not applicable to the company as company is a non banking finance companyThough the information is attached as Annexure D-8 which forms part of this report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIESACT 2013

With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis. Hence provisions of Section 188 (1) are not applicable. However as thesetransactions were in the ordinary course of business and on an arm's length basis in theopinion of the Board these transactions are justified to be executed. The detail of thesetransactions is given in Annexure D-9 which forms part of this report.

During the year the Company had not entered into any contract or arrangement withrelated parties which could be considered ‘material' according to the policy of theCompany on Materiality of Related Party Transactions. Your attention is also drawn to theRelated Party disclosures set out in Note no. 25 of the Financial Statements.

VIGIL MECHANISM

The Company has established a Vigil Mechanism cum Whistle Blower Policy in terms ofSection 177 (10) of the Companies Act 2013 and also in terms of Regulation 22 ofSecurities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. The detail of the said Vigil Mechanism cum Whistle Blower Policy isgiven in the Corporate Governance Section which is annexed herewith. The Vigil Mechanismcum Whistle Blower Policy is also available on the Company's websitehttp://www.emeraldfin.com/wp-content/uploads/2015/03/Whistle-Blower-Policy.pdf.

DIRECTORS' RESPONSIBILITY STATEMENT:-

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had 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 and loss of the company for that period;

(c) the directors had 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 had prepared the annual accounts on a going concern basis;\

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

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

COMPLIANCE

The company has devised proper systems to ensure compliance of all laws applicable tothe company and the compliance reports issued by the Departmental Heads are placed beforethe Board every Quarter confirming compliance by the Company with all applicable Laws.

In accordance with Regulation 17 (8) read with Part B of Schedule V to the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 pertaining to corporate governance norms the Managing Director has submittednecessary certificate to the Board of Directors stating the particulars specified underthe said Clause. The certificate has been reviewed by the Audit Committee and taken onrecord by the Board of Directors.

DEMATERIALIZATION OF SHARES

As mentioned in Company's earlier Annual Reports the Company's equity shares are incompulsory Demat mode in terms of SEBI Guidelines. This has been facilitated througharrangement with NSDL and CDSL. About 94.62% of the shares of the Company are already indematerialized form. M/s Mas Services Limited New Delhi is acting as the Registrar andShare Transfer Agents for this purpose and acts as common share agency in terms of SEBIGuidelines.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

COMPLIANCE WITH THE SECRETARIAL STANDARDS

The company has duly complied with the applicable Secretarial Standards during thefinancial year 2019-20.

SUMS DUE TO MICRO SMALL & MEDIUM ENTERPRISES

There is no liability towards principal and interest payable to Micro Small &Medium Enterprises as on 31st March 2020.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCYCODE 2016 (IBC)

No Insolvency resolution process has been initiated/ filed by a financial oroperational creditor or by the company itself under the IBC before the NCLT.

ACKNOWLEDGEMENT:-

Your Directors wish to express their sincere appreciation to valued Clients ReserveBank of India Company's Bankers Government Agencies and Employees of the company fortheir continued support & co-operation.

ANNEXURE D-1 TO THE DIRECTORS' REPORT:-

A. Conservation of Energy :

Though energy does not form a significant portion of the cost for the Company yetwherever possible and feasible continuous efforts are being put for conservation ofenergy and minimize power cost. The Energy conservation measures include replacement ofincandescent lights with low power consuming LED lights and compact Fluorescent Lightsreplacement of old electrical units with new energy efficient units. Staff of the Companyis regularly educated about conservation of power.

B. Technology Absorption :

The company is in service industry and exposure of technology is not very significant.The Company continues to absorb and upgrade modern technologies in its operations and backend support functions like Accounts Human Resource Management Operations and Compliancefunctions.

C. Foreign exchange earnings and outgo:

There is no foreign exchange earnings and outgo during the financial year.