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Escorts Finance Ltd.

BSE: 511716 Sector: Financials
NSE: ESCORTSFIN ISIN Code: INE359A01012
BSE 00:00 | 19 Sep 2.85 0.12
(4.40%)
OPEN

2.86

HIGH

2.86

LOW

2.61

NSE 05:30 | 01 Jan Escorts Finance Ltd
OPEN 2.86
PREVIOUS CLOSE 2.73
VOLUME 160
52-Week high 5.19
52-Week low 2.25
P/E 47.50
Mkt Cap.(Rs cr) 11
Buy Price 2.65
Buy Qty 1000.00
Sell Price 2.86
Sell Qty 340.00
OPEN 2.86
CLOSE 2.73
VOLUME 160
52-Week high 5.19
52-Week low 2.25
P/E 47.50
Mkt Cap.(Rs cr) 11
Buy Price 2.65
Buy Qty 1000.00
Sell Price 2.86
Sell Qty 340.00

Escorts Finance Ltd. (ESCORTSFIN) - Director Report

Company director report

Your Directors are pleased to present the Thirtieth Annual Report together with theAudited Financial Statements of the Company for the financial year ended March 31 2018and the Auditors' Report thereon.

Financial Results (Rs. In Lacs)
Particulars Financial Year ended March 31 2018 Financial Year ended March 31 2017
Gross Income 16.42 30.47
Profit/ (Loss) before write off provisions & tax (276.27) (5.82)
Tax adjustment for earlier years - -
Profit/ (Loss) after Tax (97.47) (5.82)

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. 37.44 Lacs has been paid to the Fixed Deposit holders during thefinancial year ended March 31 2018. As on the said date there is an unclaimed/ unpaidfixed deposit liability of Rs. 1095.13 Lacs.

Management Discussion and Analysis

(i) Industry Structure and Development & Opportunities and Threats

Non Banking Finance Companies (NBFC) sector in India is represented by a mix of a fewlarge companies with nationwide presence and a few small and medium sized companies withregion focus primarily engaged in hire purchase financing investments corporate loansIPO funding venture capital and other non-fund based activities. The Reserve Bank ofIndia (RBI) regulates and supervises these NBFCs.

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.

(ii) Opportunities and threats

The NBFCs are facing stiff competition from Banks and Financial Institutions due tothe ability of Banks & FII's to raise a low cost fund which enables them to providefunds at more favorable rates. More stringent capital adequacy norms have been stipulatedby RBI for NBFCs which results in inability to give cheaper finance.

(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.

(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

High interest regime in the economy may act as a dampener for the financing business.There is also stiff competition due to entry of large players in the market.

(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 loss for the year after write offs/ provisions etc. and tax amounts to Rs. 97.47.

(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

In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Pritam Narang Director retires by rotation at the ensuing AnnualGeneral Meeting of your Company and being eligible offers himself for re-appointment.

Your Directors recommend the re-appointment of Mr. Pritam Narang at the ensuing AnnualGeneral Meeting. Mr. Rochak Puri Independent Director of the Company has resigned fromthe Board of the Company w.e.f. May 16 2018. The Board places on record its appreciationfor the valuable guidance and services rendered by Mr. Rochak Puri during his tenure withthe Company.

The Company has on the recommendation of Nomination and Remuneration Committee and inaccordance with the provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 co-opted Mr. Sumit Raj as an Additional IndependentDirector on the Board of the Company w.e.f. May 16 2018 subject to approval of members atthe AGM. He shall hold office as Director of the Company upto the date of ensuing AGM andis eligible for appointment as a Director.

Pursuant to the provisions of Section 149 and other applicable provisions of the Actyour directors are seeking appointment of Mr. Sumit Raj as an Independent Directors for aperiod of 3 years.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed under sub-section(6) of Section 149 of the Act and Listing

Regulations.

The policy for Appointment and Remuneration of Director's Key Managerial Personnel andOther Employees is attached as Annexure A and forms an integral part of thisreport.

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 areprovided as under:

Particulars Mr. Pritam Narang Mr. Sumit Raj
Director Identification Number 00982418 07171298
Date of Birth 08/02/1949 18/08/1986
Date of Appointment 14/01/2008 16/05/2018
Qualifications B.Com (Hons) from Delhi University M.Com from Rajasthan University Intermediate (Group 1) of ICWA B.Com CS & LLB
Brief Resume and Area of Expertise Mr. Narang is having Experience in Accounts & Finance Export & Import Third Country International Trade Corporate Aviation Management Corporate Administration Projects travel trade. He is also governing Board member of Business Aircraft Operator Association. Mr. Sumit Raj is an Associate Member of Institute of Company Secretaries of India. He is having approx. 7 years of experience in the field of Secretarial and Legal. He is also having directorships in some other Companies and LLPs.
Directorships held in other companies (excluding foreign companies) Escorts Consumer Credit Limited PKP Consultants Pvt. Ltd.
Daksh Softech Pvt. Ltd.
Committee Memberships of other Companies (includes only Audit Committee and Stakeholders Relationship Committee) - -
Number of shares held in the Company - -
Relationship between directors inter-se There is no inter-se relationship between Mr. Pritam Narang and other directors. There is no inter-se relationship between Mr. Sumit Raj and other directors.
Terms and appointment/ alongwith details any Conditions of re-appointment remuneration if 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 policyconforming to established standards. Pursuant to the Listing Regulations the CorporateGovernance Report and Auditors' Certificate regarding compliance of conditions of

Corporate Governance are enclosed as Annexure B and forms an integral part ofthis Report.

Indian Accounting Standard

The Ministry of Corporate Affairs (MCA) on February 16 2015 notified that IndianAccounting Standards (Ind AS) are applicable to certain classes of companies from April 12016 with a transition date of April 1 2015. Ind AS has replaced the previous Indian GAAPprescribed under Section 133 of the Companies Act 2013 ("the Act") read withRule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicable to the Company fromApril 1 2016.

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 CharteredAccountants 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

During the year ended March 31 2018 Escorts Asset Management Limited ceased to be theassociate of the

Company and Escorts Securities Limited became associate of the Company.

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.

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) as Statutory Auditors of the Company for a period of 5years i.e. upto the conclusion of AGM to be held in the year 2022.

The first year of audit was of the financial statements for the year ending March 312018 which included the audit of the quarterly financial statements for the year.

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 2017-18. The Secretarial Audit Report for the financial year ended March31 2018 is enclosed as Annexure F and forms an integral part of this Report. TheBoard has also re-appointed M/s Jayant Gupta and Associates Practicing CompanySecretaries to conduct secretarial audit of the Company for the financial year 2018-19.

Auditors Qualifications/ Observations and Management Comments

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 36: Complete facts havebeen disclosed in the note which is self-explanatory and do not call for any furthercomments.

Note 37: The Company had only three employees on its rolls at the end of thefinancial year. The gratuity liability is being provided on actual basis as per theprovisions of Payment of Gratuity Act 1972. Similarly leave encashment liability is alsoprovided on actual basis. The management feels that provision on actual basis is moreprudent than the actuarial estimate in view of only three employees on roll.

Management responses to the observations made by the Secretarial Auditors in theSecretarial Audit Report are dealt as under: a. Please refer to Note 36 of the Notes toAccounts forming part of Balance Sheet which is self-explanatory and does not call for anyfurther 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 Reportexcluding the aforesaid information is being sent to the members of the Company. Anymember interested in obtaining such particulars may write to the Company Secretary of theCompany 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

Seven meetings of the Board of Directors were held during the year. For furtherdetails please 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.

Shifting of Registered Office

The Company has shifted its registered office within the Union Territory of Chandigarhfrom "SCO 198-200 Second Floor Sector 34A Chandigarh 160 022" to "SCO -64-65 Third Floor Sector 17A Chandigarh 160017" w.e.f. February 6 2018.

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 approved by the

Board may be accessed on the Company's website at the link: www.escortsfinance.com .

Your directors draw attention of the members to Note 43 & 44 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.

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 thepreparation of the annual accounts for the year ended March 31 2018 the applicableaccounting standards read with requirements set out under Schedule III to the Act havebeen followed alongwith proper explanation relating to material departures; (ii) theDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2018 and of the profit and loss ofthe Company for the year ended on that date; (iii) the Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for financial year ended March 312018 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/-
Pritam Narang Sumit Raj
Place: Faridabad Director Director
Dated: August 9 2018 DIN: 00982418 DIN: 07171298