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Kreon Finnancial Services Ltd.

BSE: 530139 Sector: Financials
NSE: N.A. ISIN Code: INE302C01018
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NSE 05:30 | 01 Jan Kreon Finnancial Services Ltd
OPEN 5.65
PREVIOUS CLOSE 5.65
VOLUME 300
52-Week high 6.26
52-Week low 5.65
P/E
Mkt Cap.(Rs cr) 6
Buy Price 6.23
Buy Qty 5.00
Sell Price 5.65
Sell Qty 200.00
OPEN 5.65
CLOSE 5.65
VOLUME 300
52-Week high 6.26
52-Week low 5.65
P/E
Mkt Cap.(Rs cr) 6
Buy Price 6.23
Buy Qty 5.00
Sell Price 5.65
Sell Qty 200.00

Kreon Finnancial Services Ltd. (KREONFINNANCIAL) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 25th ANNUAL REPORT on the business andoperations of your company and the Audited Financial Statements together with the AuditorsReport for the year ended 31st March 2019.

Financial Results:
Year ended on 31st March 2019 Year ended on 31st March 2018
Revenue From Operations 8092366 9469886
Other Income 30029897 186399
Total Income 38122263 9656285
Total Expenditure 35442225 6735148
Profit Before Tax/Depreciation/Interest 33592340 39079088
Interest 2727104 1533167
Depreciation 1379023 830208
Provision For Taxation (Including Current Tax Deferred Tax & Income Tax Of Earlier Years) 515639 -
Deferred Tax 91843 -97600
Net Profit/Net Loss after Tax -848465 -37332151

BUSINESS PERFORMANCE:

The above mentioned performance was amidst very strong headwinds on the entire sector.It is worth mentioning that due to focusing on fundamentals which has been the main plankover these two decades; enabled the company not only to navigate through this situationbut achieve great milestones.

SHARE CAPITAL:

The paid up share capital as on March 2019 was Rs.10061000. No additions oralterations were made during the year.

DIVIDEND

In order to conserve resources the Board of Directors have decided not to declare anydividend for the current financial year 2017-18. TRANSFER TO PROFIT & LOSS ACCOUNTYour Company proposes to transfer Rs. -848465/- to the General Reserve

PROSPECTS AND DEVELOPMENTS:

There is a very huge market to be served which needs an efficient last mile deliveryof credit thus creating enormous opportunity for all the financial institutions and NBFCsin special.

The Company continues to pursue the strategy of being multi locational thus giving thedistinct edge from the risk management and scalability perspective. The focus of theproduct is to cater to all segments which is the key driver of our economy

RESOURCES:

HUMAN RESOURCE MANAGEMENT

Human Resource Management plays a very important role in realizing the Company'sobjective. The Company is managed by the active involvement of the promoters along withstrategic inputs from a well-diversified and

In an environment that is rapidly becoming technology and digital oriented yourCompany continues to invest in long term people development for organizationalexcellence. Constant endeavours are being made to offer professional growth opportunitiesand recognitions apart from imparting training to employees. Training is an integral partof the skill development program initiated for the employees.

The articulation and implementation of the strategies is carried on by the core team.Core team at KFSL is a group of dedicated and competent team of personnel associated withthe company almost since its inception and have always extended unstinting supportbesides having identified and aligned their career objective with the company.

The Company has a diverse workforce of employees as on 31st March 2019. Going forwardthe Company will continue to focus on nurturing the right talent to achieve the businessgoal.

Your Company will always strive to strengthen this most important resource in its questto have enabling human capital.

CAPITAL AND LIABILITY MANAGEMENT:

The Company in tandem with its philosophy of pursuing the mission of "Excellencethrough Endeavours" will strive to maximize the shareholders' value.

The Company continues to pursue an efficient capital management policy which aims atmaximizing the return on capital employed and at the same time adhering to the prudentialguidelines laid down by RBI from time to time.

The Company by virtue of its performance over the years enjoys very good relationshipswith many leading banks and financial institutions. The Company could raise the requiredresources from various banks and financial institutions comfortably.

EXTRACT OF ANNUAL RETURN AS PER SECTION 92 (3) OF COMPANIES ACT 2013:

As required under Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the Annual Return in MGT-9 isannexed as part of this report vide "ANNEXURE-A".

BOARD MEETINGS HELD DURING THE

YEAR:The Company had Six Board Meetings during the financial year under review.

As required under Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the Annual Return in MGT-9 isannexed as part of this report vide "ANNEXURE-A".

Sr. No Date on which board Meetings held Total strength of the Board No of Directors Present
1 30.05.2018 4 4
2 11.08.2018 4 4
3 28.08.2018 4 4
4 03.11.2018 4 4
5 13.02.2019 4 4
6 22.03.2019 3 3

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 the directors would like tostate that:

a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanations relating to material departures.

b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 the year under review.

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 annual accounts on a going concern basis.

e) The directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively.

f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws were in place and were adequate and operating effectively.

COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:

The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished as attached to this report. "ANNEXURE - B".

AUDITORS:

At the 23rd Annual General Meeting held on 27th September 2017 the members hadappointed M/s J.V.Ramanujam & Co Chartered Accountants (Firm Registration No. 02947S)as Statutory Auditors for a term of five years beginning from the conclusion of the 23rdAGM till the conclusion of the 28th AGM.

However Ministry of Corporate Affairs vide its Notification dated 7th May 2018amended provisions of Rule 3(7) of Companies (Audit and Auditors) Rules 2014 andaccordingly provisions of requirement of ratification of appointment of auditor at everygeneral meeting is dispensed with. Therefore at the ensuing general meeting members arenot required to ratify Auditor's appointment and J.V.Ramanujam & Co CharteredAccountants (Firm Registration No. 02947S) will continue to act as auditors of theCompany till the conclusion of the AGM. The Board of Directors have adopted the AuditorsReport as issued by the Statutory Auditor.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act 2013 and in pursuant to Reg. 24A ofSecurities Exchange Board of India (Listing Obligations & Disclosure Requirements)(Amendments) Regulations 2018 the Secretarial Audit Report for the Financial Year ended31st March 2019 given by Lakshmmi Subramanian & Co Practicing Company Secretary isannexed to this Report as an "ANNEXURE - C". The Board of Directors have adoptedthe Secretarial Auditors Report as issued by the Auditor.

FRAUDS REPORTED BY THE AUDITOR

During the Year under review no frauds were reported by the Auditor (StatutoryAuditor Secretarial Auditor) to the Audit Committee/ Board.conclusion of the AGM.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUBSECTION (6) OFSECTION 149:

The Company has received declarations from Mr. Subbarayan Ekambaram and Ms. HemamaliniIndependent Directors of the Company that they meet with the criteria of independence asprescribed under Sub-section (6) of Section 149 of the Companies Act 2013 and Reg. 25 (8)& (9) Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (‘the Listing Regulations').

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Since the Company is Non-Banking Financial Company registered with the RBI thedisclosures pertaining to Loans Guarantees and Investments covered under the provisionsof Section 186 of the Companies Act 2013 are not applicable.

PARTICULARS CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB- SECTION(1) OF SECTION 188:

All Contracts / Arrangements / Transactions entered by the Company during the financialyear with related parties were in ordinary course of business and on arm's length basis.Particulars of such related party transactions described in Form AOC-2 as required underSection 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014which is annexed herewith as "ANNEXURE - D". The board has approved a policy forrelated party transactions which has been hosted on the web Site of the Company. Therewere no materially significant related party transactions entered into by the companyduring the year which may have potential conflict with the interest of the company atlarge. There were no pecuniary relationship or transactions entered into by anyIndependent Directors with the company during the year under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY:

From financial year 2017-2018 IND-AS was voluntarily adopted by your company apartfrom this there have been no material changes and commitments that would affect financialposition of the Company from the end of the financial year of the Company to which thefinancial statements relate and the date of the directors report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of energy and technology absorption:

Since the Company is operating in service sector the provisions of Section 134(3)(m)of the Companies Act 2013 regarding conservation of energy and Technology Absorption arenot applicable.

Foreign exchange earnings and outgo

The Company has outflow of Foreign Exchange

RISK MANAGEMENT

Financing activity is the business of management of risks which in turn is thefunction of the appropriate credit models and the robust systems and operations.

Your Company continues to focus on the above two maxims and is always eager to improveupon the same.

Your Company continues to give prime importance to the function of receivablesmanagement as it considers this the ultimate reflection of the correctness of marketingstrategy as well as appraisal techniques. Pursuant to Regulation 21(5) of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015the regulations of Risk management committee is applicable to top 500 listed entitiesdetermined on the basis of market capitalization as at the end of the immediate previousfinancial year. Your Company doesn't have to comply with the same but providesidentification assessment and control of risks which in the opinion of the Board maythreaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has always responded in a responsible manner to the environment in whichit operates. During the year for your Company CSR is not applicable.

FORMAL EVALUATION OF THE PERFORMANCE OF THE BOARD COMMITTEES OF THE BOARD ANDINDIVIDUAL DIRECTORS:

Pursuant to the provisions of 134(3)(p) the Companies Act 2013 the Board has carriedout the annual performance evaluation of its own performance the Directors individuallyas well as the evaluation of the working of its Committees. Inputs were received from theDirectors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance.

In pursuant to Regulation 17(10) Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the evaluation of independentdirectors were done by the entire board of directors which includes -

A.Performance of the directors; and

B.Fulfillment of the independence criteria as specified in the regulations and theirindependence from the management.

CRITERIA ADOPTED FOR EVALUATION

The Board shall evaluate the roles functions duties of Independent Directors (ID's)of the Company. Each ID shall be evaluated by all other directors' not by the Directorbeing evaluated. The board shall also review the manner in which ID's follow guidelines ofprofessional conduct.

(i) Performance review of all the Non Independent Directors of the company on the basisof the activities undertaken by them expectation of board and level of participation;

(ii) Performance review of the Chairman of the Company in terms of level of competenceof chairman in steering the company;

(iii) The review and assessment of the flow of information by the Company to the boardand manner in which the deliberations take place the manner of placing the agenda and thecontents therein;

(iv) The review of the performance of the directors individually its own performanceas well as evaluation of working of its committees shall be carried out by the board;

(v) On the basis of performance evaluation it shall be determined by the Nominationand Remuneration Committee and the Board whether to extend or continue the term ofappointment of ID subject to all other applicable compliances.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES COMPANIES:

The Company does not have any Subsidiary or Joint Venture or Associate Company.

PARTICULARS OF EMPLOYEES AND RATIO OF REMUNERATION OF EACH DIRECTOR TO THE CALCULATIONOF MEDIAN EMPLOYEE'S REMUNERATION AND OTHER PRESCRIBED DETAILS

Details of managerial remuneration as required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and informationrequired under section on 197 of the Act read with rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are mentioned as per "ANNEXURE- E".

THE CHANGE IN NATURE OF BUSINESS

There are no material changes and commitments that would affect financial position ofthe Company from the end of the financial year of the Company to which the financialstatements relate and the date of the Directors Report except that Ms. Henna Jain'sappointment as a NonExecutive Additional Director was passed in the Board Meeting held on22/03/2019 wherein the appointment is approved by Reserve Bank of India. The applicationseeking such approval has already been filed with Reserve Bank of India and is pending ason date.

PUBLIC DEPOSITS:

The Company has not accepted deposit from public during the year and there was nodeposit outstanding as on March 31 2019.

CAPITAL STRUCTURE:

During the year under review there was no change in the capital structure of theCompany.

STATUTORY COMPLIANCE:

The Company has been adopting the polices and requirements as mandated under variousstatutes to the extent and as far as possible and shall always strive to abide by the lawsand bylaws as applicable.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

MATERIAL ORDER PASSED REGULATORS / COURTS / TRIBUNALS:

There was no material order passed by Regulators / Courts / Tribunals during the yearunder review.

MATERIAL ORDER PASSED REGULATORS / COURTS / TRIBUNALS:

There was no material order passed by Regulators / Courts / Tribunals during the yearunder review.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Companies Act 2013 read with Rule 8(5)(viii) of Companies (Accounts) Rules 2014re-emphasizes the need for an effective Internal Financial Control system in the Companywhich should be adequate and shall operate effectively. The Company has devised propersystem of internal financial control which is commensurate with size and nature ofBusiness. Even the Board has appointed M/s. Bhaskaran & Co Chartered Accountants asan Internal Auditor of the Company pursuant to provisions of Section 138 of the CompaniesAct 2013 in order to ensure proper internal financial control.

DIRECTORS AND KMP:

None of the Directors retire by rotation as the Whole-time Director is appointed for aterm of Five Years and further he's the only Director in the Company apart fromIndependent Directors also Ms. Henna Jain's appointment as a NonExecutive AdditionalDirector was passed in the Board Meeting held on 22/03/2019 wherein the appointment issubject to approval from Reserve Bank of India. The application seeking such approval hasalready been filed with Reserve Bank of India and is pending as on date.

Further Mr. Bharat Jain Tatia had resigned from the Board of Directors on 12th March2019 apart from the above there were no changes in the Key Managerial Personnel duringthe year.

REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE:

As required under the SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 Management Discussion and Analysis Report and Corporate GovernanceReport are annexed as "ANNEXURE F" to this Report.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

To foster a positive workplace environment free from harassment of any nature we haveinstitutionalized the Anti- Sexual Harassment Initiative (ASHI) framework through whichwe address complaints of sexual harassment at the all workplaces of the Company. Ourpolicy assures discretion and guarantees nonretaliation to complainants. We follow agender- neutral approach in handling complaints of sexual harassment and we are compliantwith the law of the land where we operate.

We have also constituted a Special Complaints Cell to consider and address sexualharassment complaints in accordance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

During the year under review there were no incidences of sexual harassment reported.DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The Audit Committee consists of the following members:

A. Mr.Subbarayan Ekambaram (Independent Director) - Chairman

B. Mr. Jaijash Tatia (Whole-Time Director) - Member

C. Ms. Hemamalini (Independent Director) - Member No. of Meeting of Audit Committeeheld during the year : 6 The Audit Committee met (6) Six times during the financial yearunder review.

Sr. No Date on which Committee Meetings held Total strength of the Committee No of Directors Present
1 02.04.2018 3 3
2 30.05.2018 3 3
3 11.08.2018 3 3
4 03.11.2018 3 3
5 13.02.2019 3 3
6 22.03.2019 3 3

The Company has established a vigil mechanism and overseas through the Committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of employees and the Company.

The board has approved a policy for vigil mechanism which has been hosted on thewebsite of the Company. The web- link for the same is www.kreon.in

DISCLOSURE FOR MAINTENANCE OF COST RECORDS:

The provision ofApplication of Cost Record in Compliance of Companies (Accounts) Rules2014 & in respect of section 148(1) of the Companies Act 2013 is not applicable tothe Company.

ACKNOWLEDGEMENT

The Directors place on record their appreciation to all those people who have sowillingly placed their trust in the Company & the Management and to more than onemillion customers across all area under our operations who have given the Company anopportunity to serve them.

The Company looks forward to further strengthening the synergies. The entire KFSL Teamdeserves the appreciation for their sincere efforts and determination to excel. The coreteam of KFSL plays a pivotal role in articulating and implementing the strategic decisionsand thus contributing to the development of the company. I take this opportunity toexpress my heartfelt appreciation for their continuous support hard work and dedication.

I trust this journey will continue to be a pleasant one with their support aware ofthe fact that we have "Miles to go.... with the confidence that "Together We Canand We Will."

Best Wishes
For and on behalf of the Board of Directors of
Kreon Finnancial Services Limited
Sd/- Sd/-
Jaijash Tatia Henna Jain
Whole time Director Director
(DIN: 08085029) (DIN: 08383395)
Place: Chennai
Date 13th August 2019.