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Kiran Vyapar Ltd.

BSE: 537750 Sector: Financials
NSE: N.A. ISIN Code: INE555P01013
BSE 00:00 | 21 Jan 150.75 -0.75
(-0.50%)
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NSE 05:30 | 01 Jan Kiran Vyapar Ltd
OPEN 150.15
PREVIOUS CLOSE 151.50
VOLUME 3365
52-Week high 175.00
52-Week low 82.40
P/E 4.69
Mkt Cap.(Rs cr) 411
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 150.15
CLOSE 151.50
VOLUME 3365
52-Week high 175.00
52-Week low 82.40
P/E 4.69
Mkt Cap.(Rs cr) 411
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kiran Vyapar Ltd. (KIRANVYAPAR) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting their 24th Annual Report onthe business and operations of the Company and the Audited Financial Statements for theFinancial Year ended 31st March 2020.

1. Financial Performance of the Company

(RS. in Lacs)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Total Income 3137.79 5357.24 5967.00 10150.02
Total Expenses 1455.44 3025.83 4570.14 7658.47
Profit before share of profit in Associates - - 1396.86 2491.55
Share of Profit of Associates(net) - - (1483.75) 250.15
Profit Before Tax 1682.35 2331.41 (86.89) 2741.70
Tax Expenses 727.67 923.39 709.77 371.02
Profit for the year 954.68 1408.02 (796.66) 2370.68
Other Comprehensive Income (3246.65) 350.14 (10968.96) (2251.36)
Total Comprehensive Income (2291.97) 1758.16 (11765.62) 119.32
Appropriations:
Profit for the year 954.68 1408.02 (796.66) 2370.68
Balance brought forward 46397.50 45962.41 64458.41 63344.06
Amount Available for Appropriations 47352.18 47370.43 63661.75 65714.74
Dividend Paid 682.11 648.00 674.53 647.98
Tax on Dividend 1.46 - 140.21 133.62
Transfer to Statutory Reserve 190.94 319.64 156.27 360.30
Impairment Reserve 23.28 - 23.28 -
Minority Interest - - 24.64 106.77
Re-measurement of defined benefit plans (net) 1.69 5.29 3.74 7.66
Balance carried forward 46452.70 46397.50 62640.76 64458.41

a) Consolidated operations

Revenue from the consolidated operations of the Company for the yearended 31st March 2020 was Rs. 5935.95 Lacs. It is 41.05 per cent lower than Rs. 10070.17Lacs in the previous year. Overall operational expenses for the year was Rs. 4570.14 Lacsagainst Rs. 7658.47 Lacs in the previous year. Loss for the year 2019-20 was Rs. 796.66Lacs as compared to Profit for the year 2018-19 of Rs. 2370.68 Lacs; mainly due to theadverse impact of Covid-19 pandemic on the financial and capital markets thereby impactingthe overall performance of the Company during the year 2019-20.

b) Standalone operations

Revenue from the standalone operations of the Company for the year wasRs. 3117.32 Lacs. It is 41.75 percent lower than Rs. 5351.87 Lacs in the previous year.Overall operational expenses for the year was Rs.1455.44 Lacs against Rs. 3025.83 Lacs inthe previous year. Profit after tax for the year 2019-20 stood at Rs. 954.68 Lacs ascompared to Profit for the year 2018-19 of Rs.1408.02 Lacs; mainly due to the adverseimpact of Covid-19 pandemic on the financial and capital markets thereby impacting theoverall performance of the Company during the year 2019-20.

The Capital to Risk Assets Ratio (CRAR) of your Company stood at 82.09per cent as on March 31 2020 well above the regulatory minimum level of 15 per centprescribed by the Reserve Bank of India for Systematically Important Non-Deposit TakingNBFCs (NBFCs- ND-SI). Of this the Tier I CRAR was 81.81 per cent.

c) Basis of preparations of financial statements

These standalone financial statements has been prepared in accordancewith Indian Accounting Standards notified under section 133 of the Companies Act 2013read together with the Companies (Indian Accounting Standards) Rules 2015 as amended fromtime to time (‘Ind AS') along with other relevant provisions of the Act; theMaster Direction - Non-Banking Financial Company - Systematically Important Non-Deposittaking Company and Deposit taking Company (Reserve Bank) Directions 2016 (‘the NBFCMaster Directions') issued by RBI (as amended) and the regulatory guidance onimplementation of Ind AS as notified by the RBI vide notification dated 13 March 2020.

The Guidance Note on Division III - Schedule III to the Companies Act.2013 issued by the Institute of Chartered Accountants of India ("ICAI") has beenfollowed insofar as they are not inconsistent with any of these Directions.

These standalone financial statements have been prepared and presentedunder the historical cost convention on the accrual basis of accounting except forcertain financial assets and financial liabilities that are measured at fair values at theend of each reporting period as stated in the accounting policies set out below. Theaccounting policies have been applied consistently over all the periods presented in thesestandalone financial statements.

The Company has complied with all the norms prescribed by the ReserveBank of India (RBI) including the Fair practices Anti Money Laundering and Know YourCustomer (KYC) guidelines.

2. BRIEF DESCRIPTION OF THE COMPANY'S AFFAIRS

Your Company is a Non-Banking Financial Company - SystematicallyImportant Non-Deposit taking Company registered with the Reserve Bank of India. TheBusiness model of the Company comprises of Lending and Acquisition / Investments in Sharesand Securities including Mutual Funds etc.

3. IMPACT OF COVID-19 PANDEMIC

COVID-19 a global pandemic has affected the world economy includingIndia leading to significant decline and volatility in financial markets and decline ineconomic activities. The national lockdown announced on 23rd March 2020 affectedactivities of organizations across the economic ecosystem impacting earning prospects andvaluations of companies and creating huge volatility in the stock markets. As a resultthe Company's business is likely to be impacted by lower lending opportunities anddecline in carrying value of investments thereby impacting profitability. The impact ofCOVID-19 on Company's financial statements remain uncertain and dependent on extentof spread of the pandemic steps taken by the Government and central bank to mitigate theeconomic impact steps taken by the Company and its Investee Companies and the time ittakes for economic activities to resume at normal levels as a result of which actualresults may differ. In accordance with the Reserve Bank of India guidelines relating toCOVID-19 Regulatory Package dated 27th March 2020 and 17th April 2020 the Company grantedmoratorium of up to 3 months on repayment of all instalments and/ or interest asapplicable falling due between 1st March 2020 and 31st May 2020 to all the eligibleborrowers as per the Company's policy however none of the borrowers availed themoratorium. Further the Company will be extending moratorium to its borrowers asannounced by RBI vide its subsequent notification dated 22nd May 2020.

The stock exchanges banks and financial institutions were permitted tofunction during the national lockdown and correspondingly the lending and investmentactivities of the Company remained operational. Basis the relaxations granted post thelockdown period the Company's registered office have been made operational. Theemployees are permitted to work in accordance with the guidelines issued by the Ministryof Home Affairs (MHA) and the respective state governments. The Company's capital andliquidity position remains strong and would continue to be the focus area for theManagement. There have been no significant changes to the Company's internalfinancial control other than providing remote access to some of its key employees duringthe lockdown to facilitate work from home.

Based on the current assessment of the potential impact of the COVID-19on the Company management is of the view that the Company is well capitalised with lowleverage widely diversified in terms of its lending and investment activities and hasadequate liquidity to service its obligations sustain its operations and also look at anyappropriate investment/lending opportunities.

The Company has maintained adequate provisions on loan assets based onthe information available at this point of time including economic forecasts. The extentto which the current pandemic will impact the carrying value of investments and loanreceivables is dependent on the future developments which are highly uncertain at thispoint in time. The Company believes that it has considered all the possible impact ofknown events arising out of COVID 19 pandemic in the preparation of these financialstatements. The impact assessment of COVID - 19 is a continuing process given its natureand duration. The Company will continue to monitor for any material changes to futureeconomic conditions.

4. DIVIDEND

Your Directors recommend a Dividend of Rs. 0.75 per equity shareaggregating to Rs. 204.63 Lacs (approx.) to the Equity shareholders of your Company forthe Financial Year 2019-2020.

5. RESERVES

The Board in its meeting held on 15th June 2020 proposes to carry anamount of Rs. 190.94 Lacs to Statutory Reserve as per the existing provisions of theCompanies Act 2013 and Rules there under read with the Reserve Bank of India Guidelinesas applicable to the Company.

6. SHARE CAPITAL

During the year under review the Authorized Share Capital of theCompany stands at Rs. 510000000/- (Rupees Fifty-One Crores Only) divided into51000000 (Five Crores Ten Lacs) Equity Shares of Rs. 10/-. Issued Subscribed andPaid-up Share Capital of the Company stands at Rs. 272842110/- (Rupees Twenty SevenCrores Twenty Eight Lacs Forty Two Thousand One Hundred Ten Only) divided into27284211 (Two Crores Seventy Two Lacs Eighty Four Thousand Two Hundred Eleven only)Equity Shares of Rs. 10/-.

During the year under review your Company has neither issued andallotted any fresh equity shares nor has granted sweat equity as on 31st March 2020.

None of the Directors of the Company hold instruments convertible intoequity shares of the Company.

7. KIRAN VYAPAR LIMITED- SHARE INCENTIVE PLAN 2018 ["KVL SIP2018"]

Members of the Company at their Extra-ordinary General Meeting (EGM)held on 30th March 2018 have approved the Kiran Vyapar Limited -Share Incentive Plan2018 ["KVL SIP 2018"] in compliance of the Securities and Exchange Board ofIndia (Share Based and Employee Benefits) Regulations 2014.

Under the KVL SIP 2018 two types of stock incentives will be awardedto the employees of the Company (and/ or of its subsidiary/holding company) as selected bythe Nomination and Remuneration Committee of the Company ("NRC") ("EligibleEmployees") being:

(a) An employee stock option scheme ("ESOS") wherein anoption will entitle an Eligible Employee to subscribe to the Equity Shares at apredetermined price ("Exercise Price") upon fulfilment of vesting conditions;and

(b) An employee share purchase scheme ("ESPS") wherein anEligible Employee to whom an offer is made may subscribe to the Equity Shares at apredetermined price ("Subscription Price"). The Equity Shares issued under ESPSwill be subject to lock-in.

Further the maximum number of Equity Shares that may be issued inaggregate either by way of grant of options under ESOS or by way of an offer to subscribeto the Equity Shares under the KVL SIP 2018 shall be within an overall limit of 10% of thetotal issued subscribed and paid-up equity share capital of KVL (which is 2592000(Twenty-five lac and ninety-two thousand) Equity Shares) as on the date of the notice ofthe EGM ("Overall Limit"). Any award of stock incentive under KVL SIP 2018 whichmay be either by way of grant of options under ESOS or offer to subscribe to the EquityShares to the Eligible Employees which shall be determined by the NRC as per the terms ofthe KVL SIP 2018 (i) on a case to case basis in accordance with the terms of KVL SIP 2018;and (ii) shall be within the Overall Limit.

The Nomination and Remuneration Committee of the Company at theirmeeting held on 28th March 2019 has considered and approved to make an offer toidentified employee(s) subscribe to 1364211 (Thirteen Lacs Sixty Four Thousand TwoHundred Eleven) Equity Shares bearing face value of INR 10 each under the Employee SharePurchase Scheme of KVL SIP 2018; pursuant to tranche-I implementation of KVL SIP 2018.

Further the Board of Directors of the Company at their meeting held on29th March 2019 has considered and approved allotment of 1364211 (Thirteen Lacs SixtyFour Thousand Two Hundred Eleven) Equity Shares bearing face value of INR 10 each toemployee(s) who have accepted the offer to subscribe to the Equity Shares made under theEmployee Share Purchase Scheme of KVL SIP 2018; pursuant to tranche-I implementation ofKVL SIP 2018 by the Company.

During the Year under review no allotment were made under the EmployeeShare Purchase Scheme of KVL SIP 2018 therefore no disclosures are required to be madewith respect to Employee Share Purchase Scheme (ESPS) of Kiran Vyapar Limited - ShareIncentive Plan 2018 of the Company ("KVL SIP 2018") pursuant to RegulationsSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014in this Report.

The Company has not implemented Employee Stock Option Scheme (ESOS)under Kiran Vyapar Limited - Share Incentive Plan 2018 till date and therefore there areno disclosures are required to be made pursuant to Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 in relation to ESOS in this Report.

8. DEPOSITS

Your Company is an NBFC "Non-Deposit Taking SystematicallyImportant Company" registered with Reserve Bank of India. During the year underreview your Company has not accepted any deposits from the public within the meaningunder the provisions of the Master Direction - Non-Banking Financial Companies Acceptanceof Public Deposits (Reserve Bank) Directions 2016 and Chapter V of the Companies Act2013.

9. CHANGE IN THE NATURE OF BUSINESS

During the year under review there were no changes in the nature ofthe business of the Company.

10. MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year 31stMarch 2020 and at the date of report.

11. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS

During the year under review no significant and material orders werepassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.

12. EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return as at the financial year ended March312020 in Form MGT-9 as per Section 134(3)(a) of the Companies Act 2013 read with Rule 8of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies (Management andAdministration) Rules 2014 is annexed hereto and forms part of this report as "AnnexureA".

13. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGNEARNING/OUTGO

As your Company is a Non-Banking Financial Company and does not own anymanufacturing unit there are no particulars with regard to disclosure under Section 134of the Companies Act 2013 with regard to conservation of energy technology absorptionetc.

During the year under review there is no foreign exchange earnings andoutgo made by the Company.

14.DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Details of Directors retiring by rotation

In accordance with the provisions of the Companies Act 2013 Ms.Sheetal Bangur (DIN:00003541) retires by rotation at the ensuing Annual General Meetingand being eligible offers herself for re-appointment.

Brief profile of Ms. Sheetal Bangur who is to be re-appointed isfurnished in the Notice of the ensuing Annual General Meeting as per Regulation 36(3) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and SecretarialStandard-2. The Board of Directors of your Company recommends the re-appointment of Ms.Sheetal Bangur at the ensuing Annual General Meeting.

b) Appointment/ Re-appointment of Directors

During the year under review there is no change in the composition ofDirectors of the Company

c) Appointment/Resignation of Key Managerial Personnel

During the year under review no Key Managerial Personnel was appointedor has resigned during the financial year 2019-2020.

d) Fit And Proper Policy

Your Company being an NBFC "Non-Deposit Taking SystematicallyImportant Company" registered with Reserve Bank of India has put in place a policywith the approval of the Board of Directors for ascertaining the fit and proper criteriaof the directors at the time of appointment and on a continuing basis. The Company hadduly obtained a declaration and undertaking and a Deed of Covenant from the directors.

15. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from the Independent Director(s)of the Company declaring that they meet the criteria of independence both as undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

Based on the declarations disclosures received from the IndependentDirectors and on evaluation of the relationships disclosed the following Non-executiveDirectors are Independent Directors in terms of the Regulation 16 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and Section 149(6) of theCompanies Act 2013.

i. Mr. Amitav Kothari

ii. Mr. Bhaskar Banerjee

iii. Mr. Rajiv Kapasi

During the financial year 2019-20 all Independent Directors of theCompany have registered themselves with the Independent Directors Databank.

16. BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation17(10) of the Listing Regulations 2015 the Board has carried out the annual performanceevaluation of the Directors individually as well as evaluation of the working of the Boardand of the Committees of the Board by way of individual and collective feedback fromDirectors.

Pursuant to Para VII of Schedule IV of the Companies Act 2013 andRegulation 25 (3) of the Listing Regulations 2015 a separate meeting of the IndependentDirectors of the Company was convened on 8th February 2020 to perform the following:

• review the performance of non-independent directors and theBoard as a whole;

• review the performance of the Chairperson of the Company takinginto account the views of executive directors and non-executive directors;

• assess the quality quantity and timeliness of flow ofinformation between the Company management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.

Further the Nomination and Remuneration Committee also evaluated theperformance of all the Directors of the Company.

Based on the criteria the performance of the Board various BoardCommittees and Individual Directors (including Independent Directors) was evaluated andfound to be satisfactory.

During the year under review the Independent Directors of your Companyreviewed the performance of Non Independent Directors and Chairperson of your Companytaking into account the views of Executive Director and Non-Executive Directors.

Further the Independent Directors hold a unanimous opinion that theNon- Independent Directors including the Chairman and Managing Director bring to theBoard abundant knowledge in their respective field and are experts in their areas. TheBoard as a whole is an integrated balanced and consistent unit where diverse views areexpressed when required with each Director bringing professional domain knowledge to thetable. All Directors are participative interactive and communicative.

17. FAMILIARIZATION PROGRAMME

The Company is required to conduct the Familiarization Programme forIndependent Directors (IDs) in terms of Regulation 25(7) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 to familiarize them about the Company theirroles rights responsibilities in the Company and various updates and notifications underCompanies Act 2013 Listing Regulations 2015 Reserve Bank of India Guidelines and otherstatutes applicable to the Company.

The details of which have been given in the Corporate Governance Reportannexed to this Report and also posted on the website of the Company at its web-linkhttp://www.lnbgroup.com/kiran/investors.php

18. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide onCompany's business policy and strategy apart from other broad business. However incase of a special and urgent business need the Board's approval is taken by passingresolutions through circulation as permitted by law which are confirmed in thesubsequent Board Meeting.

The notice of Board Meeting is given well in advance to all theDirectors. Meetings of the Board are mostly held in Kolkata. The Agenda of the Board /Committee Meetings is circulated at least 7 (seven) days prior to the date of the meetingas per Secretarial Standard on meeting of the Board of Directors (SS-1). The Agenda forthe Board and Committee Meetings includes detailed notes on the items to be discussed atthe meeting to enable the Directors to take an informed decision.

The detailed information chart showing the date of the meeting of theBoard and its various Committees as well as details of the Directors who attended themeeting is given in the Corporate Governance Report forming part of the Annual Report.

19. COMMITTEES OF THE BOARD

During the financial year ended March 31 2020 the Company has eightcommittees as mentioned below:

a. Audit Committee

b. Stakeholders Relationship Committee

c. Nomination and Remuneration Committee

d. Corporate Social Responsibility Committee

e. Risk Management Committee

f. Loan and Investment Committee

g. Asset Liability Management Committee

h. Grievance Redressal Committee

i. IT Strategy Committee

j. IT Steering Committee

Details of the Committees along with their charters composition andmeetings held during the year are provided in the Corporate Governance Report forming apart of this Annual Report.

20. AUDIT COMMITTEE

The Composition terms of reference and other details of the Committeeforms part of the Corporate Governance Report as annexed hereto. All the recommendationsmade by the Audit Committee during the year were accepted by the Board.

21. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Composition terms of reference and other details of the Committeeforms part of the Corporate Governance Report forming part of this Annual Report.

22. NOMINATION AND REMUNERATION COMMITTEE

The Composition terms of reference and other details of the Committeeforms part of the Corporate Governance Report forming part of this Annual Report. TheNomination and Remuneration Policy is annexed hereto and forms part of this report as "AnnexureB" and also posted on the website of the Company at its weblink http://www.lnbgroup.com/kiran/policies.php

23. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Company has constituted a Corporate Social Responsibility (CSR)Committee in accordance with Section 135 of the Companies Act 2013. The Annual Report onCSR activities including the details about the development of CSR Policy and initiativestaken by the Company on Corporate Social Responsibility during the year as required bythe Companies (Corporate Social Responsibility Policy) Rules 2014 are given in the "AnnexureC" to this Report. The Corporate Social Responsibility Policy has been posted onthe website of the Company at its weblink http://www.lnbgroup.com/kiran/policies.php

24. DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

a. Subsidiary Companies

Sl. No. Name of the Company Relation
1 Iota Mtech Ltd. Wholly Owned Subsidiary
2 Anantay Greenview Private Ltd. Subsidiary
3 Sarvadeva Greenpark Private Ltd. Subsidiary
4 Satyawatche Greeneries Private Ltd. Subsidiary
5 Uttaray Greenpark Private Ltd. Subsidiary
6 Sishiray Greenview Private Ltd. Subsidiary
7 Magma Realty Private Ltd. Subsidiary
8 Samay Industries Ltd. Subsidiary
9 Shree Krishna Agency Ltd. Subsidiary
10 Amritpay Greenfield Private Ltd Step down subsidiary
11 Divyay Greeneries Private Ltd Step down subsidiary
12 Sarvay Greenhub Private Ltd. Step down subsidiary
13 Basbay Greenview Private Ltd Step down subsidiary
14 Sukhday Greenview Private Ltd. Step down subsidiary
15 IOTA Mtech Power LLP Step down subsidiary
16 Soul Beauty and Wellness Centre LLP Step down subsidiary

Policy for determining ‘Material' Subsidiaries

The Company has adopted a Policy on Material Subsidiaries as approvedby the Board. It has been posted on the website of the Company at itsweblinkhttp://www.lnbgroup.com/kiran/policies.php. More details are given in the CorporateGovernance Report annexed hereto.

During the year under review there has been no change in the number ofsubsidiaries or in the nature of business of the subsidiaries.

b. Associate Company

Sl. No. Name of the Company
1 Placid Ltd.
2 Navjyoti Commodity Management Services Ltd.
3 The Kishore Trading Co Limited
4 LNB Renewable Energy Private Ltd

The statement in Form AOC-1 containing the salient features of theaforesaid subsidiaries has been separately annexed hereto in terms of the first provisoto the Section 129(3) of the Companies Act 2013 including any subsequent amendmentthereto (the ‘Act') read with Rule 5 of the Companies (Accounts) Rules 2014.Further the contribution of these subsidiaries to the overall performance of the Companyis provided under the Notes to the Consolidated Financial Statements.

In accordance with third proviso of Section 136(1) of the CompaniesAct 2013 and Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Annual Report of the Company along with its Standalone and theConsolidated Financial Statements have been posted on the website of the Companywww.lnbgroup.com/kiran.

Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies and associates may write to the Company Secretary atthe Company's registered office. The same is also available on the website of theCompany www.lnbgroup.com/kiran.

c. Joint Venture

During the year under review the Company had no joint ventures.

25. CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements has been prepared in accordancewith Indian Accounting Standards notified under section 133 of the Companies Act 2013read together with the Companies (Indian Accounting Standards) Rules 2015 as amended fromtime to time (‘Ind AS') along with other relevant provisions of the Act; theMaster Direction - Non-Banking Financial Company - Systematically Important Non-Deposittaking Company and Deposit taking Company (Reserve Bank) Directions 2016 (‘the NBFCMaster Directions') issued by Reserve Bank of India (RBI) and the regulatory guidanceon implementation of Ind AS notified by the RBI vide notification dated 13th March 2020.

The Guidance Note on Division III - Schedule III to the Companies Act.2013 issued by the Institute of Chartered Accountants of India ("ICAI") has beenfollowed insofar as they are not inconsistent with any of these Directions.

These consolidated financial statements have been prepared andpresented under the historical cost convention on the accrual basis of accounting exceptfor certain financial assets and financial liabilities that are measured at fair values atthe end of each reporting period as stated in the accounting policies set out below. Theaccounting policies have been applied consistently over all the periods presented in theseconsolidated financial statements.

26. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board of Directors of the Company has established a Vigil Mechanismfor Directors and employees and adopted the Whistle Blower Policy in terms of Section 177of the Companies Act 2013 and Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to report concerns about unethical behavior wrongfulconduct and violation of Company's Code of conduct or ethics policy. The details ofwhich have been given in the Corporate Governance Report annexed to this Report and alsoposted on the website of the Company at its web linkhttp://www.lnbgroup.com/kiran/policies.php1

27. RISK MANAGEMENT

The Company has in place a mechanism to identify assess monitor andmitigate various risks that may impact key business objectives of your Company.

Your Company has adopted the Risk Management Policy in order to ensurethat all the current and future material risk exposures of the Company are identifiedassessed quantified appropriately mitigated and managed to establish a framework forthe company's risk management process and to ensure its wide implementation toensure systematic and uniform assessment of risks related with giving loans and makinginvestment to enable compliance with appropriate regulations wherever applicablethrough the adoption of best practices and to assure business growth with financialstability.

Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. These arediscussed by Risk management Committee and the same is even referred to the AuditCommittee and the Board of Directors of the Company if required.

The composition and other details of the Risk Management Committeeforms part of the Corporate Governance Report as annexed hereto.

28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS OUTSTANDING DURINGTHE FINANCIAL YEAR

The loan given guarantee given and investment made by the Companyduring the financial year ended March 312020 are within the limits prescribed underSection 186 of the Act. Particulars of the Loans/guarantee/ advances and Investmentsoutstanding during the financial year are fully disclosed in the Note no. 32 attached tothe annual accounts which are attached with this report.

29. RELATED PARTY TRANSACTIONS

There were no materially significant related party transactions enteredinto by the Company which may have potential conflict with the interest of the Company.All contracts or arrangements or transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis and are reviewed by the Audit Committee of the Board.

Further suitable disclosure as required by the Accounting Standardshas been made in the Notes to the Financial Statements.

During the year under review the Company has not entered intocontracts or arrangements or transactions with related parties which comes under thepurview of Section 188 of the Companies Act 2013. Accordingly no transactions arereported in Form no. AOC - 2 in terms of Section 134 of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014.

The Policy on Related Party Transaction as approved by the Board hasbeen posted on the website of the Company at its web linkhttp://www.lnbgroup.com/kiran/policies.php.

Further as required by Schedule V of SEBI (LODR) Regulations 2015disclosures of transactions with any person or entity belonging to the promoter/promotergroup which hold(s) 10% or more shareholding in the Company in the format prescribed inthe relevant Accounting Standards has been made in the relevant Notes to the FinancialStatements.

30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the details are annexed as "Annexure D" to theAnnual Report.

Further in accordance with Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 there are no employeesin the Company drawing remuneration in excess of the limits set out in the said rules.

31. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard of Directors of the Company has appointed M/s Vinod Kothari & Co PracticingCompany Secretaries to conduct the Secretarial Audit for the financial year 2019-2020.The Secretarial Audit Report for the Financial Year 2019-2020 is annexed hereto and formspart of this report as "Annexure E" which is self-explanatory. The saidReport does not contain any qualification reservation or adverse remark.

32. STATUTORY AUDITORS

M/s. Walker Chandiok& Co. LLP Chartered Accountants bearingRegistration No. 001076N/N500013 will be completing their first term of 5 (five)consecutive years started from the conclusion of the 19th Annual GeneralMeeting till the conclusion of the 24th Annual General Meeting. The consent has beenreceived from M/s. Walker Chandiok & Co. LLP Chartered Accountants bearingRegistration No. 001076N/N500013 towards appointment as the Statutory Auditors of theCompany for a 2nd term of 5 (five) years from the conclusion of 24thAnnual General Meeting till the conclusion of 29th Annual General Meeting ofthe Company. The appointment of M/s Walker Chandiok& Co. LLP will be in accordancewith the provisions of the Companies Act 2013.

The Board on the recommendation of the Audit Committee membersrecommends the appointment of M/s. Walker Chandiok & Co. LLP Chartered Accountantsbearing Registration No. 001076N/N500013 as the Statutory Auditors of the Company for a2nd term of 5 (five) years from the conclusion of 24th Annual General Meeting till theconclusion of 29th Annual General Meeting of the Company to be held in calendar year 2025subject to the approval of members at the 24th Annual General meeting of the Company. TheResolution seeking members' approval on this item is included in the Notice conveningthe 24th Annual General Meeting.

33. AUDITORS' REPORT

The notes on financial statements referred to in the Auditors Reportare self-explanatory and do not call for any further comments. The Auditors Report doesnot contain any qualification reservation or adverse remark.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year underreview as stipulated under Regulation 34(2)(e) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Master Direction - Non-Banking FinancialCompany - Systematically Important Non-Deposit taking Company and Deposit taking Company(Reserve Bank) Directions 2016 forms part of the Annual Report.

35. CORPORATE GOVERNANCE

The Company is committed to maintaining the premier standards ofCorporate Governance and adhering to the Corporate Governance requirements as set out bySecurities and Exchange Board of India and Reserve Bank of India. The Report on CorporateGovernance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and Master Direction -Non-Banking Financial Company - Systematically Important Non-Deposit taking Company andDeposit taking Company (Reserve Bank) Directions 2016 forms part of the Annual Report.

The Certificate from the Statutory Auditors M/s. Walker Chandiok &Co. LLP Chartered Accountants confirming compliance with the Regulation 34(3) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015of Corporate Governance also forms part of this Annual Report.

Further declaration by Mr. Shreeyash Bangur Managing Director statingthat the members of the Board of Directors and Senior Management Personnel have affirmedcompliance with the Code of Conduct of the board of Directors and Senior Management areannexed with this Report.

36. PREVENTION OF INSIDER TRADING

During the year under review the Board of Directors of the Company hasrevised the existing Code of Conduct for prevention of Insider T rading and Code ofPractices and Procedures for fair disclosure of Unpublished Price SensitiveInformation' (UPSI) in view to make it in line with the amended provisions of theSEBI (Prohibition of Insider Trading) Regulations 2015.

The Code of Practices and Procedures for Fair Disclosure of UnpublishedPrice Sensitive Information is also available on the website of the Company viz.http://www.lnbgroup.com/kiran/investors.php

37. CEO & CFO CERTIFICATION

Certificate from Mr. Shreeyash Bangur Managing Director and Mr. AjaySonthalia Chief Financial Officer pursuant to Regulation 17(8) read with Schedule II ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 for the yearunder review forms part of this Annual Report.

38. ANNUAL SECRETARIAL AUDIT UNDER LISTING REGULATIONS

In line with the SEBI Circular dated February 08 2019 an AnnualSecretarial Compliance Report confirming compliance of all applicable SEBI RegulationsCirculars and Guidelines by the Company was issued by appointed M/s Vinod Kothari &Company Practicing Company Secretaries and was filed with the Stock Exchanges.

39. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions on the Directors' ResponsibilityStatement referred in Section 134(3)(c) and 134 (5) of the Companies Act 2013 yourDirector's confirm that -

(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(d) the directors had prepared the annual accounts on a going concernbasis; and

(e) the directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

40. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

The Directors had laid down internal financial controls procedures tobe followed by the Company which ensure compliance with various policies practices andstatutes in keeping with the organization's pace of growth and increasing complexityof operations for orderly and efficient conduct of its business. The Audit Committee ofthe Board from time to time evaluated the internal financial control of the Company withregard to-

a. Systems have been laid to ensure that all transactions are executedin accordance with management's general and specific authorization. There are welllaid manuals for such general or specific authorization.

b. Systems and procedures exist to ensure that all transactions arerecorded as is necessary to permit preparation of financial statements in conformity withgenerally accepted accounting principles or any other criteria applicable to suchstatements and to maintain accountability for aspects and the timely preparation ofreliable financial information.

c. Access to assets is permitted only in accordance withmanagement's general and specific authorization. No assets of the Company are allowedto be used for personal purposes except in accordance with terms of employment or exceptas specifically permitted.

d. The existing assets of the Company are verified/ checked atreasonable intervals and appropriate action is taken with respect to any differences ifany.

e. Proper Systems are in place for prevention and detection of fraudsand errors and for ensuring adherence to the Company's policies.

Based on the above your Board is of the view that adequate internalfinancial controls exist in the Company.

41. SECRETARIAL STANDARD

The Company complies with all the applicable Secretarial Standard.

42. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013

The Company has in place policy on Sexual Harassment of Women atworkplace in line with the requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. An Internal Complaint Committee hasbeen set up to redress complaints received. All employees (permanent contractualtemporary trainees) are covered under this policy. The Committee has not received anycompliant from any employee during the financial year 2019-20.

43. FRAUD REPORTING

There have been no frauds reported by the auditors of the Company undersub-section (12) of section 143 of the Companies Act 2013 and to Central Government asper Companies Amendment Act 2015.

44. RBI GUIDELINES - COMPLIANCE

Your Company continues to carry on its business of Non-BankingFinancial Company as a Non-Deposit taking Company and follows prudent financial managementnorms as applicable. Your Company appends a Statement containing particulars as requiredin terms of Paragraph 19 of Master Direction - Non-Banking Financial Company -Systematically Important Non-Deposit taking Company and Deposit taking Company (ReserveBank) Directions 2016 alongwith the Statement of Balance Sheet disclosures forNBFC's with Assets Size of Rs. 500 crores as required in terms of Master Direction -Non-Banking Financial Company - Systematically Important Non-Deposit taking Company andDeposit taking Company (Reserve Bank) Directions 2016.

45. MAINTENANCE OF COST RECORDS

The provisions of Section 148 of the Companies Act 2013 with respectto maintenance of Cost records are not applicable on the Company.

46. ACKNOWLEDGEMENTS

Your Directors would like to record their appreciation of the hard workand commitment of the Company employees and are grateful for the co-operation and supportextended to the Company by the Bankers Statutory Authorities Financial Institutions(s)and all other establishments connected with the business of the Company.

For and on behalf of the Board of Directors

Lakshmi Niwas Bangur Shreeyash Bangur
(DIN : 00012617) (DIN : 00012825)
Place : Kolkata Chairman Managing Director
Date : 15.06.2020

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