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Kreon Finnancial Services Ltd.

BSE: 530139 Sector: Financials
NSE: N.A. ISIN Code: INE302C01018
BSE 00:00 | 30 Jan 44.00 -0.75
(-1.68%)
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NSE 05:30 | 01 Jan Kreon Finnancial Services Ltd
OPEN 44.75
PREVIOUS CLOSE 44.75
VOLUME 5377
52-Week high 100.65
52-Week low 37.00
P/E 13.88
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 44.75
CLOSE 44.75
VOLUME 5377
52-Week high 100.65
52-Week low 37.00
P/E 13.88
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kreon Finnancial Services Ltd. (KREONFINNANCIAL) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 28th ANNUAL REPORT on the business andoperations of your company and the Audited Financial Statements together with the AuditorsReport for the year ended 31st March 2022.

FINANCIAL RESULTS

(Rupees in Lakhs)

Year ended on 31st March 2022 Year ended on 31st March 2021
Income from operations 428.90 171.67
Profit/(Loss) before depreciation Interest 253.73 (12.81)
Interest 39.04 33.91
Depreciation 4.69 7.37
Profit/(Loss) before tax 210.01 (54.09)
Prior period tax - (5.33)
Provision for tax - -
Deferred tax 0.02 (0.56)
Profit/(Loss) after tax 210.03 (48.19)
Other Comprehensive Income (‘OCI’) 296.97 53.53
Total Comprehensive Income 507.00 5.34

BUSINESS PERFORMANCE

The revenue of Kreon in the Financial Year 2021-2022 is Rs.428.90 Lakhs compared to Rs171.67 Lakhs in the Financial Year 2020 -2021. During the year under review Kreon hasmade a profit of Rs. 210.03 Lakhs for the Financial Year 2021-2022 as compared to loss(after tax) of Rs.54.09 Lakhs for the Financial Year 2020-2021.

In the previous Financial year StuCred had partnered with Paytm which provided theconsumers with an option to make their StuCred repayments directly from the Paytm app.This facility helped easy repayments and greeted by the consumers

During this Financial year 2021-22 tie up with HDFC Credila an HDFC Ltd CompanyIndia's first dedicated education loan company who is pioneered in the concept ofspecialist education loan lender is another significant addition to KREON’sbusiness. Both these companies working for empowering the Student Community have joinedhands together to form an alliance/partnership to help and bring the best out of thestudents.

With the increase in customer base and steep increase in disbursement of loans comparedto previous financial years growth of Kreon is in the rising trend in the FinTechindustry.

CHANGE IN NATURE OF BUSINESS

The Company is operating as a Non-Banking Financial Company (Non- Deposit TakingCompany). There are no changes in the nature of business.

CAPITAL STRUCTURE

There was further issue of shares during the financial year which is disclosed indetail under the head

"Issue of Shares/Warrants on preferential basis" in this report.

SHARE CAPITAL

The members vide postal ballot resolution dated 13th April 2021 and 7th June 2021approved the reclassification of Authorised Share Capital of the Company. The Authorizedshare Capital was reclassified from Rs. 20000000 (Rupees Twenty Crores only) dividedinto 20000000 (Two Crores) Equity Shares of Rs. 10 (Rupees Ten only) each of theCompany to Rs. 200000000 (Rupees Twenty Crores only) divided into 15000000 (OneCrores Fifty Lakhs) Equity Shares of Rs. 10 (Rupees Ten only) each of the Company and5000000 (Fifty Lakhs) Compulsory Convertible Preference Shares of Rs. 10 (Rupees Tenonly). Further at the Extra Ordinary General Meeting dated 27th November 2021 theAuthoirzed share capital was increased to Rs.300000000/-(Rupees Thirty Crores only)divided into 25000000 (Two Cores Fifty Lakhs) Equity Shares of Rs. 10 (Rupees Ten only)each of the Company and 5000000 (Fifty Lakhs) Compulsory Convertible Preference Sharesof Rs. 10 (Rupees Ten only). There is no other change in the Share capital. The Authorizedshare capital was increased fo 31st March 2022 is Rs.300000000/-(Rupees Thirty Croresonly).

ISSUE OF SHARES/WARRANTS ON PREFRENTIAL BASIS

The members vide postal ballot resolution dated 13th April 2021 and 7th June 2021approved for issue of shares on preferential basis by conversion of Loan intoEquity/Compulsory Convertible Preference Shares subject to in-principle approval forlisting of shares from the BSE. The BSE vide its letter dated 12th August 2021 issued thein-principle approval. Further the Company at its Board meeting dated 2nd September 2021alloted shares of 375000 equity shares of Rs. 10/- each at a premium of Rs. 10/-each toMr.Jaijash Tatia aggregating to Rs. 75 Lakhs (Rupees Seventy Five Lakhs only) and 6200008.25% Compulsorily Convertible Preference Shares ("CCPS") of face value of Rs.10/- each aggregating to Rs. 62 Lakhs (Rupees Sixty Two Lakhs only) convertible into310000 equity shares of Rs. 10/- at a premium of Rs. 10/- to M/s Jinpaad DeveloperPrivate Limited on preferential basis for consideration other than cash. The same wasratified at the Extra Ordinary General meeting held on 27th November 2021 and issue of9500000 warrants at the price of Rs.21/- per warrant was approved at that meeting. Outof the CCPS issued 300000 CCPS of Rs.10/- each was converted into 150000 Equityshares of Rs. 10/- each at a premium of Rs.10/- each at the Board meeting held on 30thMarch 2022. The paidup share capital as on 31st March 2022 is Rs.105860000/- (RupeesTen Crore Fifty Eight Lakhs Sixty thousand only).

DIVIDEND

The available resources are being conserved for survival and future operations henceno dividend is being proposed for the Financial Year 2021-22.

TRANSFER TO RESERVES

As per Sec 45IC(i) of RBI Act 1934 your company has transferred 20% of the NetProfits to General Reserves amounting to Rs.42.00 Lakhs (Rupees Forty Two Lakhs only) forthe Financial year ended 31st March 2022.

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

The Submission of Extract of Annual Return in MGT-9 is dispensed with in terms ofCompanies (Management and Administration) Amendment rules 2021 dated 5th March 2021.Hence the question of attaching MGT-9 with this report does not arise. However theAnnual return can be viewed in the website of the company www.kreon.in.

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.

PUBLIC DEPOSITS

Your Company being a Non-Deposit taking NBFC has complied with all applicableRegulations of the Reserve Bank of India (RBI). As per Non-Banking Finance Companies RBIDirections 1998 the Directors hereby report that the Company did not accept any publicdeposits during the year and did not have any public deposits outstanding at the end ofthe year.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has always responded in a prudent manner in protecting the environment inwhich it operates. During the year for your Company provisions as to Corporate SocialResponsibility is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED UNDER SECTION188 (1)

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 is described in Form AOC-2 as requiredunder Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules2014 which is annexed herewith as "ANNEXURE - I". The board has approveda Policy for Related Party Transactions which has been hosted on the website of theCompanyhttp://www.kreon.in/wp-content/uploads/2020/07/Policy-on-Related-Party-Transaction.pdf.Therewere no materially significant Related Party Transactions entered into by the companyduring the year under review which may have potential conflict with the interest of thecompany at large. There were no pecuniary relationship or transactions entered into by anyIndependent Directors with the company during the year under review.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES COMPANIES

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

DIRECTORS KEY MANAGERIAL PERSONNEL

Directors of the Company as on date as follows:

S.NO NAME AND DIN DESIGNATION
1 Mr.JaijashTatia (DIN: 08085029) Whole-Time Director
2 Ms. Henna Jain (DIN: 08383395) Non- Executive Director
3 Ms.Hemamalini D (DIN: 02914395) Independent Director
4 Mr.Subbarayan Ekambaram (DIN: 01186153) Independent Director
5 Mrs.Shoba Nahar Chief Financial Officer
6 Mrs.Vidyalakshmi R Company Secretary

During the year under review there has been no change in the constitution of Boardi.e. the structure of the Board remains the same.

In terms of Section 152 of the Companies Act 2013 Mr.Jaijash Tatia Director retiresby rotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

Mr.Jaijash Taia appointed as the Wholetime Director of the Company for a period ofFive years w.e.f 01.04.2018 to 31.03.2023. The Board recommends to reappoint Mr. JaijashTatia in the ensuing Annual General Meeting.

COMPANY’S POLICY RELATING TO DIRECTORS’ APPOINTMENT PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES

The company’s policy relating to appointment of directors payment of managerialremuneration directors’ qualifications positive attributes independence ofdirectors and other related matters as provided under Section 178(3) of the Companies Act2013 is furnished as attached to this report.

"ANNEXURE - II".

PARTICULARS OF EMPLOYEES AND RATIO OF REMUNERATION OF EACH DIRECTOR TO

THE CALCULATION OF 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 197 of the Act read with rule 5(1) and 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are mentioned as per "ANNEXURE- III".

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 and that of its committeechairperson and individual directors. Inputs were received from the directors coveringvarious aspects of the Board’s functioning such as adequacy of the composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance.

In pursuant to Regulation 17(10) Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the evaluation of independentdirectors was done by the entire board of directors which includes a. Performance of thedirectors; and b. Fulfilment of the independence criteria as specified in the regulationsand their independence 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’ notby the Director being evaluated. The Board shall also review the manner in which ID’sfollow guidelines of professional 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 competence ofChairman in steering the Company; (iii) The review and assessment of the flow ofinformation by the Company to the Board and manner in which the deliberations take placethe manner of placing the agenda and the contents therein; (iv) The review of theperformance of the Directors individually its own performance as well as evaluation ofworking of its Committees shall be carried out by the Board; (v) Based on performanceevaluation it shall be determined by the Nomination and Remuneration Committee and theBoard whether to extend or continue the term of appointment of ID subject to all otherapplicable compliances.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB- SECTION (6) OFSECTION 149

All Independent Directors have submitted the declaration of independence pursuant tothe provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI ListingRegulations stating that they meet the criteria of independence as provided in Section149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations.

STATUTORY AUDITORS

M/s J.V.Ramanujam & Co Chartered Accountants (Firm Registration No. 02947S) asStatutory Auditor’s retiring at the ensuing Annual General Meeting are willing to bereappointed as the Statutory Auditors of the Company for a further period of 5 years untilthe conclusion of the 33rd Annual General Meeting and has given their consent. The Boardrecommends their appointment at the ensuing Annual General Meeting. The Board of Directorshave adopted the Auditors Report as issued by the Statutory Auditor.

COMMENT ON AUDITOR REPORT

There are no qualifications reservations remarks or disclaimers made by the StatutoryAuditors in their audit report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s Lakshmmi Subramanian & Associates Practising CompanySecretaries to undertake the secretarial audit of the company. The Secretarial AuditReport issued for the FY 2021-22 by the secretarial auditor Mr. P.S. SrinivasanAssociate partner M/s. Lakshmmi Subramanian & Associates Practicing Company

Secretaries bearing (CP No. 3122 ; ACS No. 1090) is annexed herewith as "ANNEXURE- IV".

COMMENT ON SECRETARIAL AUDITOR REPORT

With reference to the remarks made by the secretarial auditor Mr. P.S. SrinivasanAssociate partner M/s. Lakshmmi Subramanian & Associates Practicing CompanySecretaries bearing (CP No. 3122) in the Secretarial Audit Report the remarks areself-explanatory.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable in respect ofthe business activities carried out by the Company.

FRAUDS REPORTED BY THE AUDITOR

During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported any instances of frauds committed in the Company by its officers oremployees to the Audit Committee under Section 143(12) of the Companies Act 2013details of which need to be mentioned in this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments that would affect the 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.

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.

Pursuant to Regulation 21(5) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the regulations of RiskManagement Committee is applicable to top 500 listed entities determined on the basis ofmarket capitalization as at the end of the immediate previous financial year. Kreon doesnot have the statutory requirement to have risk management committee. However the Companyensure to take steps to identify assess and control risks which in the opinion of theBoard may threaten the business activities of Kreon.

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 a propersystem of internal financial control which is commensurate with size and nature ofBusiness. The Board has also re-appointed M/s. R.Baskaran & Co. Chartered Accountantsas an Internal Auditor of the Company pursuant to provisions of Section 138 of theCompanies Act 2013.

CERTIFICATE ON CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (LODR) Regulations 2015Corporate Governance Report is annexed as "ANNEXURE - V" to this Report.

As required by Schedule V of the SEBI (LODR) Regulations 2015 Auditor’sCertificate on Corporate

Governance as certified by J.V.Ramanujam & Co are annexed as "ANNEXURE -VI" to this Report confirming compliances with the conditions of CorporateGovernance.

BOARD MEETINGS HELD DURING THE YEAR

The Board met 9 times during the financial year under review the details of which aregiven in the Corporate Governance Report "ANNEXURE - V". The interveninggap between the Meetings was within the period prescribed under the Companies act 2013.

CERTIFICATE OF CHIEF FINANCIAL OFFICER

The Chief Financial Officer of the Company has certified to the Board on FinancialStatements and other matters pertaining to Financial Year ended 31st March 2022 inaccordance with Regulation 17(8) of the SEBI (LODR) Regulations 2015 which is annexed as"ANNEXURE - VII" to this Report.

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

Certificate of Non-Disqualification of Directors (Pursuant to Regulation 34(3) andSchedule V Para C clause (10)(i) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015) for the year ending 31st March 2022 has been obtainedfrom M/s. AXN Prabhu& Associates Mr. AXN Prabhu Practising Company Secretary C.P#11440; Membership No. 3902 which is annexed as "ANNEXURE - VIII" to thisreport.

STATUTORY COMPLIANCE

The Company has been adopting the policies and requirements as mandated under variousstatutes to the extent and as far as possible and shall always strive to abide by the lawsand by- laws 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.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by theReserve Bank of

India ("RBI") from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by theReserve Bank of India and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements)

Regulations 2015 a detailed analysis of the Company’s performance is discussedin the Management

Discussion and Analysis Report which forms part of this Annual Report.

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

During the FY 2021-22 Forex outflow on purchase of / subscription to software 10.50lakhs. During the period 2020-21 there was an outflow of Rs. 9.55 Lakhs.

MATERIAL ORDER PASSED REGULATORS / COURTS / TRIBUNALS

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

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in Company’s premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.

Your Company has a Policy for prevention of Sexual Harassment at workplace and copy ofthe same has been disclosed on the Company's website www.kreon.in which aims atprevention of harassment of employees and lays down the guidelines for identificationreporting and prevention of undesired behaviour.

The Company had instituted an Internal Complaints Committee for redressal of sexualharassment complaint (made by the victim) and for ensuring time bound treatment of suchcomplaints comprising of the following members: I. Cofounder& Director Mr. JaijashTatia II. Director Ms. Henna Jain III. Chief Financial Officer Mrs. Shoba Nahar

During the Financial year under review there were no cases reported under the saidpolicy.

POLICY ON VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read with Rule7 of the Companies (Meetings of its Board and its Powers) Rules 2014 and in accordancewith Regulation 22 of SEBI (LODR) Regulations 2015 the Company has an established Policyon Vigil Mechanism for Directors / Employees and other stakeholders of the Company toreport concerns about unethical behaviors actual or suspected fraud or violation of theCompany's Code of conduct or ethics policy. The policy also provides a direct access tothe Chairman of the Audit Committee to make protective disclosures to the Management aboutthe grievances or violation of the Company's Code of Conduct. The policy is disclosed onthe Company'swebsitehttp://www.kreon.in/wp-content/uploads/2020/07/Vigil-Mechanism-or-Whistle-Blower-Policy.pdf.

POLICIES

The Board of Directors of the Company have from time to time framed and approvedvarious Policies in pursuance of the Companies Act 2013 and the Listing Agreement/ SEBI(LODR)Regulations 2015. These Policies and Codes are reviewed by the Board and areupdated if required. The following policies have been framed and has been disclosed onthe Company's website www.kreon.in:

1. Code of conduct for Directors Senior Management and Independent Directors

2. Policy for prevention of sexual harassment (POSH)

3. Policy on determination of Materiality of Events or Information

4. Board diversity policy

5. Performance evaluation policy

6. Succession plan for the Board and Senior Management

7. Risk management Policy

8. Vigil Mechanism or Whistle Blower Mechanism

9. Policy on preservation of documents

10. Policy on Related Party Transaction

11. Criteria for making payment to Non-Executive Directors

12. Terms and conditions for appointment of independent Directors

13. Familiarization Program for Independent Directors

14. Code for prevention of Insider Trading in securities

OTHER DISCLOSURES

During the year under review the Company has not obtained any registration/ license /authorisation by whatever name called from any other financial sector regulators.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013:

a. that in the preparation of the Annual Financial Statements for the year ended 31stMarch 2022 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;

b. that such Accounting Policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2022 and of the profit of the Company for the year ended on thatdate;

c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. that the Annual Financial Statements have been prepared on a going concern basis;

e. that proper Internal Financial Controls were in place and that the financialcontrols were adequate and were operating effectively.

f. that system to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.

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 all the customersacross all area of our operations who have given the Company an opportunity to servethem.

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 Can and WeWill."

By Order Of The Board
For Kreon Finnancial Services Limited
Sd/- Sd/-
JaijashTatia Henna Jain
Whole time Director Director
(DIN: 08085029) (DIN: 08383395)
Place : Chennai
Date : 01.08.2022

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