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Escorts Finance Ltd.

BSE: 511716 Sector: Financials
NSE: ESCORTSFIN ISIN Code: INE359A01012
BSE 12:30 | 20 Oct 4.45 -0.18
(-3.89%)
OPEN

4.86

HIGH

4.86

LOW

4.40

NSE 05:30 | 01 Jan Escorts Finance Ltd
OPEN 4.86
PREVIOUS CLOSE 4.63
VOLUME 18668
52-Week high 4.86
52-Week low 1.36
P/E
Mkt Cap.(Rs cr) 18
Buy Price 4.45
Buy Qty 3.00
Sell Price 4.86
Sell Qty 1.00
OPEN 4.86
CLOSE 4.63
VOLUME 18668
52-Week high 4.86
52-Week low 1.36
P/E
Mkt Cap.(Rs cr) 18
Buy Price 4.45
Buy Qty 3.00
Sell Price 4.86
Sell Qty 1.00

Escorts Finance Ltd. (ESCORTSFIN) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the Thirty First Annual Report together with theAudited Financial Statements of the Company for the financial year ended March 31 2019and the Auditors' Report thereon.

Financial Results (Rs. In Lacs)

Particulars Financial Year ended March 31 2019 Financial Year ended March 31 2018
Gross Income 44.36 16.42
Profit/ (Loss) before write off provisions & tax 6.80 (276.21)
Tax adjustment for earlier years - 178.80
Profit/ (Loss) after Tax 6.80 (97.41)

The Gross Income comprises of amount(s) received on recovery of delinquent assetsthrough settlement/ compromise/ legal action.

Dividend

In view of losses suffered by the Company no dividend has been considered for theyear.

Fixed Deposits

An amount of Rs. 10.13 Lacs has been paid to the Fixed Deposit holders during thefinancial year ended March 31 2019. As on the said date there is an unclaimed/ unpaidfixed deposit liability of Rs. 1085.00 Lacs.

Management Discussion and Analysis

(i) Industry Structure and Development & Opportunities and Threats

The Company has surrendered its Certificate of registration and RBI also through itsOrder dated April 16 2016 has cancelled Company's Certificate Registration No- A-14.01690.

The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. Your directors are exploring thepossibilities of venturing into new business areas.

(ii) Opportunities and threats

The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. Your directors are exploring thepossibilities of venturing into new business areas.

(iii) Segment-wise or Product-wise Performance

The Company has been primarily engaged in the business of hire purchase leasing billdiscounting and non-fund based activities. Since the risk and returns in these businessesare similar therefore these are grouped as a single segment. This is in accordance withthe guiding principle provided in the Indian Accounting Standard on Segment Reporting (INDAS - 108) issued by The Institute of Chartered Accountants of India.

The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. Your directors are exploring thepossibilities of venturing into new business areas.

(iv) Future Outlook

The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. Your directors are exploring thepossibilities of venturing into new business areas.

(v) Risks and Concerns

The Company is presently engaged in recovery of delinquent loan assets and settlementof old legal cases filed by/ against the Company. The management sees uncertainty in suchsettlements as the present functioning is only limited to recovery of delinquent loanassets. However your directors are exploring the possibilities of venturing into newbusiness areas.

(vi) Internal Control Systems and their adequacy

The Internal Control Systems are in place to serve the existing operations of theCompany.

(vii) Financial Performance

The profit for the year after write offs/ provisions etc. and tax amounts to Rs. 6.80Lacs.

(viii) Human Resource and Industrial Relations

The Company is having three employees as on the date of this report. Your Directorsrelation at all levels with employees were cordial.

Cautionary Statement

Statements in this Management Discussion and Analysis section describing the Company'sobjectives projections estimates and expectations may be ‘forward lookingstatements' within the meaning of applicable laws and regulations. Actual results maydiffer substantially or materially from those expressed or implied. Important developmentsthat could affect the Company's operations are significant changes in political andeconomic environment in India tax laws RBI regulations exchange rate fluctuation andrelated costs.

Directors

Mr. Pritam Narang Whole-time Director of the Company has resigned from the Board ofthe Company w.e.f. June 4 2019. The Board places on record its appreciation for thevaluable guidance and services rendered by Mr. Rochak Puri and Mr. Pritam Narang duringtheir respective tenure with the Company.

The Board of Directors of the Company has on the recommendation of Nomination andRemuneration Committee and in accordance with the provisions of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations

2015 co-opted Mr. Rajeev Khanna as a Whole-time Director on the Board of the Companyw.e.f. June 4 2019 subject to approval of members at the AGM. He shall hold office asAdditional Director designated as Whole-time Director of the Company upto the date ofensuing AGM and is eligible for appointment as a Director.

Pursuant to the provisions of Section 196 203 and other applicable provisions of theCompanies Act 2013 read with Companies (Appointment and Remuneration) Rules 2014 yourdirectors are seeking appointment of Mr. Rajeev Khanna as a Whole Time Director for aperiod of 5 years.

The Board of Directors of the Company has on the recommendation of Nomination andRemuneration Committee and in accordance with the provisions of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations

2015 co-opted Mr. Vinod Dixit as an Additional Director on the Board of the Companyw.e.f. July 26 2019. He shall hold office as an Additional Director of the Company uptothe date of ensuing AGM and is eligible for appointment as a Director.

The Company has received a declaration from Independent Directors under section 149(6)of Companies Act 2013. The policy for Appointment and Remuneration of Director's KeyManagerial Personnel and Other Employees is attached as Annexure A and forms anintegral part of this report.

The Company has devised the criteria for performance evaluation of IndependentDirectors Board Committees and other individual Directors which includes criteria forperformance evaluation of the non-executive directors.

Evaluation was done by the Board for its own performance and that of its Committees andindividual Directors.

The brief resume and other details relating to the Director(s) proposed to beappointed/ re-appointed as required to be disclosed under Listing Regulations and otherapplicable provisions are provided as under:

Particulars Mr. Rajeev Khanna Mr. Vinod Dixit
Director Identification Number 08471497 01147430
Date of Birth 03.03.1957 10.12.1961
Date of Appointment 04.06.2019 26.07.2019
Qualifications Associate Member of ICWA M.Com LLB
Brief Resume and Area of Expertise Mr. Rajeev Khanna is having approx. 40 years of experience in his field and is also having strong leadership skills which will be beneficial for the company in long run. His appointment is done on the basis of his leadership quality and past experience. He is having approx. 35 years of experience in his field and is also having strong leadership skills which will be beneficial for the Company in the long run. His appointment is done on the basis of his leadership quality and past experience.
Directorships held in other companies (excluding foreign companies) Committee Memberships of other Companies (includes only Audit Committee and Stakeholders Relationship Committee) - 1. Escorts Securities Ltd.
2. Escorts Consumer Credit Limited
3. EEWL Limited
4. Sietz Technologies India Pvt. Ltd. Sietz Technologies India Pvt Ltd.
Audit Committee: Chairman
Nomination & Remuneration
Committee: Member
Escorts Securities Limited
Audit Committee: Chairman
Number of shares held in the Company - -
Relationship between directors inter-se There is no inter-se relationship between Mr. Rajeev Khanna and other directors. There is no inter-se relationship between Mr. Vinod Dixit and other directors.
Terms and Conditions of appointment/ re-appointment along with details remuneration if any The directors have been appointed in terms of the provisions of Companies Act 2013 and are responsible to undertake the roles and responsibilities prescribed under the Companies Act 2013 and other laws for the time being in force. In addition the Directors are also responsible to undertake the roles and responsibilities assigned by the Board from time to time.

The details of programme for familiarisation of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company www.escortsfinance.com.

Corporate Governance

Your Company reaffirms its commitment to the good corporate governance practices andhas adopted the Code of

Conduct which has set out the systems processes and policy conforming to establishedstandards. Pursuant to the

Listing Regulations the Corporate Governance Report and Auditors' Certificateregarding compliance of conditions of Corporate Governance are enclosed as Annexure Band forms an integral part of this Report.

Consolidated Financial Statements

The Consolidated Financial Statements in accordance with the Companies Act 2013 andIndian Accounting Standard (Ind AS)-110 applicable to the Consolidated FinancialStatements read with Ind AS-28 on Accounting for Investments in Associates and Ind AS-31on Financial Reporting of Interests in Joint Ventures issued by The Institute of Chartered

Accountants of India have been prepared. The Audited Consolidated Financial Statementsalong with the Auditors'

Report thereon are annexed with this Report.

Subsidiaries Joint Ventures and Associate Companies

The statement containing salient features of financial statements of associatecompanies prepared in accordance with Section 129 of the Companies Act 2013 read withRule 5 of Companies (Accounts) Rules 2014 forms an integral part of this Report. TheConsolidated Financial Statements presented by the Company include the financial resultsof its associate company.

The Company will make available the Annual Accounts of its associate company andrelated information to the members of the Company who may be interested in obtaining thesame. The annual accounts of its associate company will also be kept open for inspectionat the Registered Office of the Company.

Escorts Securities Limited ceased to be an associate of the company w.e.f. May 112018.

Auditors and Auditors' Report Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read with Companies (Audit andAuditors) Rules 2014 the shareholders of the Company in the 29th AGM held on September26 2017 had appointed M/s Kapish Jain &

Associates Chartered Accountants New Delhi (Firm Registration No. 022743N) asStatutory Auditors of the Company for a period of 5 years i.e. upto the conclusion of AGMto be held in the year 2022.

In accordance with the Companies (Amendment) Act 2017 enforced on May 7 2018 by MCAthe appointment of Statutory Auditors is not required to be ratified by members at everyAGM.

Secretarial Auditors

The Board of Directors of the Company had appointed M/s Jayant Gupta and AssociatesPracticing Company Secretaries to conduct secretarial audit of the Company for thefinancial year 2018-19. The Secretarial Audit Report for the financial year ended March31 2019 is enclosed as Annexure F and forms an integral part of this Report.

Auditors Qualifications/ Observations and Management Comments Thereon

The qualifications/ observations made by the Statutory Auditors in the Auditors' Reportare dealt with separately in the Notes to the Balance Sheet and the Statement of Profitand Loss. Management response to the same is as under: Note 33: Complete facts havebeen disclosed in the note which is self-explanatory and do not call for any furthercomments.

Management responses to the observations made by the Secretarial Auditors in theSecretarial Audit Report are dealt as under: a. In view of non availability of anyprofitable business line and protracted litigations in the Company potential and suitablecandidates were unwilling to take directorship in the Company. This was hampering theCompany's efforts to meet the constitution norms for the Nomination and RemunerationCommittee ("NRC") of the Board.

However with continuous pursuit the Company could appoint Mr. Vinod Dixit as a NonExecutive Director on the Board w.e.f. July 26 2019 and thereafter the NRC wasreconstituted in compliance with the applicable provisions. b. Please refer to Note 33 ofthe Notes to Accounts forming part of Balance Sheet which is self-explanatory and does notcall for any further comments.

Particulars of Employees

In terms of provisions of Section 197(12) of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names of the employees in terms of remuneration drawn is available with the CompanySecretary. Having regard to the provisions of Section 136(1) of the Act the

Annual Report excluding the aforesaid information is being sent to the members of theCompany. Any member interested in obtaining such particulars may write to the CompanySecretary of the Company and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as

Annexure C and forms an integral part of this Report.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are as follows:-

A. Conservation of Energy

Your Company being engaged in financing business and does not have any activityrelating to conservation of energy.

B. Technology absorption: N.A C. Foreign exchange earnings and outgo

During the period under review there was no foreign exchange outflow from your Companyand it had no foreign exchange earnings.

Disclosures Meetings of the Board

Five meetings of the Board of Directors were held during the year. For further detailsplease refer Report on

Corporate Governance annexed as Annexure B to this report.

Audit Committee

All the recommendations made by the Audit Committee were accepted by the Board.

For constitution and other details of the Audit Committee please refer Report onCorporate Governance annexed as

Annexure- B to this report.

Extracts of Annual Return

In terms of provisions of Section 92 of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 the extracts of Annual Return in Form MGT-9is enclosed as Annexure D and forms an integral part of this Report.

Particulars of Loans given Investments made Guarantees given and Securities provided

During the year under review no loan guarantees and securities has been provided. Thedetails of investments made during the year is provided in Note 5 of the Notes toaccounts.

Contracts and Arrangements with Related Parties

During the year the Company had not entered into any contract/ arrangement/transaction with related parties.

The particulars of contracts and arrangement with related parties under section 188(1)in Form AOC-2 are enclosed as Annexure E.

The Policy on materiality of related party transactions and dealing with related partytransactions as provided by the Board may be accesses on the Company's website at thelink: www.escortsfinance.com .

Your directors draw attention of the members to Note 38 & 39 to the financialstatement which sets out related party disclosures.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

Risk Management

A Risk Management Committee which has been entrusted with the responsibility to assistthe Board in (a) overseeing and approving the Company's enterprise wide risk managementframework; and (b) overseeing that all the risks that the organisation faces such asstrategic financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks.

Secretarial Standards

The Company is in compliance with all the applicable Secretarial Standards.

Prevention of Sexual Harassment

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

Significant or material orders passed by the Regulators or Courts or

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.

Material Changes and Commitment affecting the financialposition

There are no material changes affecting the financial position of the Companysubsequent to the close of the Fiscal 2019 till the date of this report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility

Statement it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed alongwith proper explanation relating to material departures; (ii)the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the

Company as at March 31 2019 and of the profit and loss of the Company for the yearended on that date; (iii) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for financial year ended March 312019 on a ‘going concern' basis;

(v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

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

Acknowledgement

Your Directors wish to acknowledge and thank the co-operation and assistance extendedby the Banks Financial Institutions Government Agencies Customers and Depositors.

The Directors also wish to convey their deep appreciation for the contribution made bythe employees to the operations of the Company in particular those who continued with theCompany and extended their full support during this difficult period. We also convey ourthanks to our esteemed shareholders for their continued support and encouragement.

For and on behalf of the Board of Directors

Sd/- Sd/-

Rajeev Khanna Sumit Raj Place: Faridabad Whole-Time Director Director Dated: : July 262019 DIN: 08471497 DIN: 07171298

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