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Paul Merchants Ltd.

BSE: 539113 Sector: Financials
NSE: N.A. ISIN Code: INE291E01019
BSE 11:52 | 27 Jul 1801.95 -30.55
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NSE 05:30 | 01 Jan Paul Merchants Ltd
OPEN 1805.00
PREVIOUS CLOSE 1832.50
VOLUME 387
52-Week high 2200.00
52-Week low 960.00
P/E 12.27
Mkt Cap.(Rs cr) 186
Buy Price 1785.00
Buy Qty 2.00
Sell Price 1799.95
Sell Qty 1.00
OPEN 1805.00
CLOSE 1832.50
VOLUME 387
52-Week high 2200.00
52-Week low 960.00
P/E 12.27
Mkt Cap.(Rs cr) 186
Buy Price 1785.00
Buy Qty 2.00
Sell Price 1799.95
Sell Qty 1.00

Paul Merchants Ltd. (PAULMERCHANTS) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting before you their 36thAnnual Report together with the Audited Financial Statements of the Company for theFinancial year ended 31st March 2020.

FINANCIAL SUMMARY/HIGHLIGHTS:-

The financial summary of the Company for the year under review is givenbelow for your consideration:-

PARTICULARS 2019-20 (Amount in Rs.) 2018-19 (Amount in Rs.)
Gross Income 53711702593 49114071103
Profit Before Interest and Depreciation 208008609 176508096
Interest 1312622 1041101
Profit after Interest before Depreciation 206695987 175466995
Provision for Depreciation 28179618 32590650
Exceptional Items 12917116 -
Net Profit Before Tax 165599253 142876345
Provision for Tax 34179287 22262613
Deferred Tax 12467220 -29899544
Net Profit After Tax 118952746 150513276
Other Comprehensive Income/(Loss) (net of tax) -1821453 731855
Total Comprehensive Income (net of tax) (Transferred to Reserves and Surplus) 117131293 151245132
Balance of Surplus brought forward 3784049087 3632803955
Reserves and Surplus 3899124380 3784049087
Proposed Dividend on Equity Shares Nil. Interim Dividend of Rs 20.56 Lakhs paid during the year is proposed to be confirmed as Final by the shareholders. NIL

STATE OF COMPANY'S AFFAIRS/ BRIEF DESCRIPTION OF THECOMPANY'S WORKING DURING THE YEAR/HIGHLIGHTS/OPERATIONS IN TERMS OF SECTION 134(3)(i) OF THE COMPANIES ACT 2013

The Company operates principally in three business verticals ForeignExchange Tours & Travels and International Money Transfer. During the year underreview Gross revenue from Foreign Exchange Services stood at Rs. 5343.68 Crores and fromTours & Travel Segment stood at Rs. 4.13 Crores. Gross revenue from InternationalMoney Transfer stood at Rs. 71.65 Lakhs. The Profit before tax stood at Rs. 16.56 Croresand Profit after tax stood at Rs.11.90 crores after adjusting for deferred Tax. Forfurther

details kindly refer to the Financial Statements ManagementDiscussion & Analysis Report at Annexure D-3 and Corporate Governance Report atAnnexure D-10 which forms part of this report.

COVID-19

In the month of March 2020 due to the announcement of Lockdown/Curfewin various States/Union Territories by the State/Union Government(s) in order to preventand contain the spread of Covid-19 (Corona Virus) and keeping in view the safety and wellbeing of the employees the Company Paul Merchants Limited and its Wholly Owned SubsidiaryCompany Paul Merchants Finance Private Limited (‘PMFPL') had temporarily closedits Registered Office and Branches across India w.e.f. 23rd March 2020.However the Company managed to keep its treasury accounts and back office teamsoperational due to work from home arrangements and some part of Gold loan operations wasalso sustained by the Wholly Owned Subsidiary. The spread of covid-19 and consequentclosure of branches had adversely affected the Company's top line as well as bottomline. At that time the Company was left with only 20% of forex business and Travelbusiness was almost NIL. However in accordance with the Guidelines/ Compliance normsissued/ suggested by the Central Government State Governments and local authorities fromtime to time the Company Paul Merchants Limited and its Wholly Owned Subsidiary CompanyPaul Merchants Finance Private Limited gradually started opening its branches in variousstates and as of now full operations have been started. In terms of Regulation 30 of SEBILODR Regulations 2015 the Company duly filed its disclosures relating to disruption inthe operations due to COVID vide its letter dated March 24 2020 Letter dated May 122020 Letter dated May 26 2020 Letter dated June 24 2020 and Letter dated July 10 2020with BSE Ltd.

EXTRACT OF ANNUAL RETURN

In terms of Section 134 (3)(a) of the Companies Act 2013 (hereinafterto be referred to as Act) the extract of Annual Return as on March 312020 as referred toin sub section (3) of Section 92 has been annexed to this Report as Annexure D-3A and thesame is placed on the Website of the Company along with Annual Return under weblinkhttp://www.paulmerchants.net/paulmerchants/wp-content/uploads/2020/08/MGT-9- MGT-7.pdf

NUMBER OF MEETINGS OF BOARD

The information in terms of Section 134(3)(b) of the Act is givenbelow:-

During the Financial year 2019-20 4 (Four) Board Meetings were heldand 1 (One) Independent Directors meeting was held on 13-02-2020. The dates on which theBoard Meetings were held are 14-05-2019 0608-2019 14-11-2019 and 13-02-2020. Furtherdetails as required under Part C of Schedule V to the Securities & Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 are given in theCorporate Governance Report as Annexure D-10 forming part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT:-

Pursuant to Section 134 (3) (c) read over with Section 134 (5) of theCompanies Act 2013 your Directors 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 were 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 and loss 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;

(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.

FRAUDS REPORTED BY AUDITORS

In terms of Section 134 (3)(ca) of the Act there are no fraudsreported by auditors under sub-section (12) of section 143 including those which arereportable to the Central Government.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

It is hereby stated in terms of Section 134 (3)(d) of the Act that allIndependent Directors of the Company have given declarations that they meet the criteriaof Independence as laid down under Section 149 (6) of the Companies Act 2013 read overwith Regulation 16(1)(b) and 25 of SEBI (LODR) Regulations 2015. They have also given adeclaration that their respective names have already been included in the data bankmaintained by the Indian Institute of Corporate Affairs at Manesar and as such they are incompliance of sub-rule (1) and sub-rule (2) of the Companies (Appointment andQualification of Directors) Rules 2014.

POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION

Pursuant to the requirement under Section 134(3)(e) and Section 178(3)of the Companies Act 2013 the policy on appointment of Board Members including criteriafor determining qualifications positive attributes independence of a Director and thepolicy on remuneration of Directors KMPs and other employees is attached as Annexure D-2as Nomination and Remuneration Policy which forms part of this report.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATIONRESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE :-

(i) by the Auditor in his report:-

M/s Jain & Associates (Firm Regn. No. 01361N) CharteredAccountants Chandigarh were appointed as Statutory Auditors of the Company at the 31stAnnual General Meeting held on 28™ September 2015 for a term of five consecutiveyears. The appointment of the Statutory Auditors had been ratified by the Shareholders intheir 34th Annual General Meeting held on 27th September 2018 uptothe end of their term

i.e. till the conclusion of 36th Annual General Meeting ofthe Company. As their term expires in the ensuing Annual General Meeting of the Companythe Board of Directors had recommended M/s Rajiv Goel & Associates CharteredAccountants (Firm Registration No. 011106N) in their place to be appointed by theshareholders of the Company in the ensuing Annual General Meeting

The Auditors' Report being self-explanatory requires no commentsfrom the Directors. Further there are no reservations qualifications disclaimersadverse remarks or Modified opinion in the Audit Reports issued by them in respect ofStandalone as well as Consolidated Financial Statements of the Company for the FinancialYear 2019-20.

(ii) by the Company Secretary in practice in his Secretarial AuditReport:-

Mr. Anil Negi a Company Secretary in practice having CP no. 17213 andMembership no. 46547 was appointed as Secretarial Auditor of the Company for the financialyear 2019-20 pursuant to Section 204 of the Companies Act 2013. The Secretarial AuditReport submitted by him in the prescribed form MR-3 is attached as Annexure D-5 and formspart of this report.

There are no qualifications reservations adverse remarks ordisclaimer by the Secretarial Auditors in the Report issued by them for the financial year2019-20 which call for any explanation from the Board of Directors.

Further there was one material unlisted subsidiary of the Company M/sPaul Merchants Finance (Pvt) Limited during the Financial Year 2019-20 under review. Assuch Secretarial Audit Report of the said material unlisted subsidiary has been annexedto this Annual Report as Annexure D-5A as required under Regulation 24A of SEBI LODRRegulations. There are no qualifications reservations adverse remarks or disclaimer bythe Secretarial Auditors in the Report issued by them for the financial year 2019-20 whichcall for any explanation from the Board of Directors.

PARTICULARS OF LOANS GUARANTEES SECURITIES AND INVESTMENTS UNDERSECTION 186 OF THE COMPANIES ACT 2013

Pursuant to Section 134(3)(g) of the Act particulars of loansguarantees Securities and Investments under Section 186 of the Act made during theFinancial Year 2019-20 are attached as Annexure D-8 which forms part of this report.Further reference in this regard can be made to Note 2 6 91011 and 35 to the FinancialStatements for further details.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDERSECTION 188(1) OF THE COMPANIES ACT 2013

With reference to Section 134(3)(h) of the Act read over with Rule 8(2)of the Companies (Accounts) Rules 2014 all contracts and arrangements with relatedparties under Section 188(1) of the Act entered by the Company during the financial yearwere on an arm's length basis. In the opinion of the Board these transactions arejustified to be executed. The details of these transactions is given in Form AOC-2annexed as Annexure D-9 which forms part of this report. All the said transactions weredone with prior approval of the Audit Committee and the Board. The transactions enteredinto pursuant to the omnibus approval of the Audit Committee were also placed regularlybefore the Audit Committee for its review.

During the year the Company had not entered into any contract orarrangement with related parties which could be considered ‘material' accordingto the policy of the Company on Materiality of Related Party Transactions. Your attentionis also drawn to the Related Party disclosures set out in Note no. 38 of the FinancialStatements for further details.

The policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on theCompany's website at

http://www.paulmerchants.net/paulmerchants/wp-content/uploads/2019/04/Annexure-24-A-Policy-on-Related-Party-Transaction.pdf

RESERVES:-

Entire amount of Net Profit of Rs. 118952746/- has been transferredto the Reserves under the head "Other Equity" in the Balance Sheet. No amounthas been transferred or proposed to be transferred to any other reserves.

DIVIDEND:-

For FY 2019-20 based on the Company's performance the Directorshad declared and paid an interim dividend of Rs. 2/- per equity share (20%) on 1028000equity shares held by the shareholders of the Company. The item relating to the saidinterim dividend is placed before the shareholders to be confirmed as Final Dividend inthe ensuing Annual General Meeting.

MATERIAL CHANGES AND COMMITMENTS

The onset of COVID-19 and its impact has been discussed at thebeginning of this report under the heading "COVID19". There are no othermaterial changes or commitments effecting the Financial position of the Company happeningbetween the end of the Financial Year of the Company to which the Financial

Statements relate and date of this Report. Hence information asrequired in terms of Section 134(3)(l) of the Act is nil.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS & OUTGO

The requisite information in terms of Section 134(3)(m) of the Act readover with Rule 8(3) of Companies (Accounts) Rules 2014 has been given by way of anAnnexure D-1 to this Report.

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENTPOLICY IN TERMS OF SECTION 134(3)(n) OF THE ACT

The Company has in place comprehensive risk assessment and minimizationprocedures which are reviewed by the Board periodically as per the Risk Management Policyof the Company. A Management Committee named as Risk Management Committee voluntarilyconstituted by the Board of Directors is also in place with the responsibility ofpreparation of Risk Management Policy reviewing and monitoring the same on regular basisto identify and review critical risks on regular basis to update the Risk management onquarterly basis to report key changes in critical risks to the Management on an ongoingbasis and such other functions as may be prescribed by the Board. The Company hasformulated Risk Management Policy which provides an overview of the principles of riskmanagement explains the approach adopted by the Company for risk management defines theorganizational structure for effective risk management develops a "risk"culture that encourages all employees to identify risks and associated opportunities andto respond to them with effective actions identify assess manage and mitigate existingand new risks including the elements of risk that may threaten the existence of theCompany in a planned and co-ordinated manner with minimum disruption and cost to protectand preserve Company's human physical and financial assets. The Risk ManagementCommittee holds periodical meetings to review the critical risks identified. The risksfaced by the Company and their minimization procedures are assessed categorically underthe broad heads of High Medium and Low risks. Further the Company identifies risks andcontrol systems are instituted to ensure that the risks in each business process areminimized/mitigated. The Board provides oversight and reviews the Risk Management Policyperiodically.

THE DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANYON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR IN TERMS OF SECTION134(3)(o) OF THE ACT:-

In terms of Section 135 of the Companies Act 2013 the Company hasconstituted a CSR Committee of the Board and the said Committee has following compositionas on March 312020:-

1 Sh. Sandeep Bansal Non Executive Director Chairman
2 Sh. Rajneesh Bansal Executive Director Member
3 Sh. Vigyan Prakash Arora Independent Director Member

Other details of the Committee and CSR Policy is furnished in theReport on Corporate Governance which is annexed herewith as Annexure D-10. The detailsabout the policy developed and implemented by the Company on Corporate SocialResponsibility initiatives taken during the year in the form of CSR Policy is alsoavailable on the website of the Company http://www.paulmerchants.net/paulmerchants/wp-content/uploads/2020/07/CORPORATE-SOCIAL-RESPONSIBILITY-POLICY.pdf. The Annual Report onCSR activities is furnished in Annexure D-7 which forms part of this report.

A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION OFTHE PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS HAS BEEN MADE INTERMS OF SECTION 134(3)(p) OF THE ACT READ OVER WITH RULE 8(4) OF THE COMPANIES (ACCOUNTS)RULES 2014:-

Pursuant to the applicable provisions of the Companies Act 2013 andthe Listing Regulations the Board in consultation with its Nomination & RemunerationCommittee has put in place a framework containing inter-alia the criteria forperformance evaluation of the entire Board of the Company its Committees and IndividualDirectors including Independent Directors. Accordingly following is the criteria forevaluation:-

a. Criteria for evaluation of the Board of Directors as a whole:

i. The Frequency of Meetings

ii. Quantum of Agenda

iii. Administration of Meetings

iv. Flow and quantity of Information from the Management to the Board

v. Number of Committees and their role.

vi. Overall performance of the Company

b. Criteria for evaluation of the Board Committees

i. The Frequency of Meetings

ii. Quantum of Agenda

iii. Administration of Meetings

iv. Flow and quantity of Information from the Management to theCommittee

v. Role of Committees.

vi. Contribution to the decision making process of the Board.

c. Criteria for evaluation of the Individual Directors includingIndependent Directors;

i. Experience and ability to contribute to the decision making process

ii. Problem solving approach and guidance to the Management

iii. Attendance and Participation in the Meetings

iv. Personal competencies and contribution to strategy formulation

v. Contribution towards statutory compliances monitoring of controlsand Corporate Governance

vi. The evaluation of independent directors shall be done by the entireboard of directors which shall include -

a. Performance of the directors; and

b. fulfillment of the independence criteria as specified in theseregulations and their independence from the management:

Provided that in the above evaluation the directors who are subject toevaluation shall not participate.

Accordingly the annual performance evaluation of the entire Board ofthe Company its Committees and Individual Directors including Independent Directors hasbeen carried by the Board in its Meeting held on 25-06-2020 in terms of the provisions ofSection 134 (3) (p) of the Companies Act 2013 read over with Rule 8(4) of Companies(Accounts) Rules 2014 as per above criteria. The performance evaluation of all theIndependent Directors have been done by the entire Board and while doing so the Directorsubject to evaluation had not participated. On the basis of performance evaluation done bythe Board it is determined whether to extend or continue their term of appointmentwhenever their respective term expires.

The Independent Directors had met separately on 13-02-2020 without thepresence of Non-Independent Directors and the members of management and discussedinter-alia the performance of non-Independent Directors and Board as a whole and theperformance of the Chairman of the Company after taking into consideration the views ofExecutive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried outevaluation of every Director's performance performance of the entire Board of the Companyas a whole and all its Committees.

The Directors express their satisfaction over the evaluation process.

CHANGE IN THE NATURE OF COMPANY'S BUSINESS

There is no change in the nature of Company's business orgenerally in the class of business in which the Company has an interest during the yearunder review. Hence information required in terms of Rule 8(5)(ii) of the Companies(Accounts) Rules 2014 is nil.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED ORHAVE RESIGNED DURING THE YEAR IN TERMS OF RULE 8(5Hiii) OF THE COMPANIES (ACCOUNTS)RULES 2014:-

DIRECTORS

During the year under review Mr. Sat Paul Bansal (DIN 00077499) hadbeen re-appointed as the Chairman cum Managing Director of the Company by the Shareholdersin their Annual General Meeting held on 30-09-2019.

Smt Sarita Rani Bansal (DIN 00094504) who was liable to retire byrotation was re-appointed as Director by the Shareholders in their Annual General Meetingheld on 30-09-2019.

Sh Sandeep Bansal (DIN 00094391) who was liable to retire by rotationwas re-appointed as Director by the Shareholders in their Annual General Meeting held on30-09-2019.

Mr. Dilbag Singh Sidhu (DIN 05210193) had been re-appointed asIndependent Director of the Company by the Shareholders in their Annual General Meetingheld on 30-09-2019.

Mr. Vigyan Prakash Arora (DIN 00806647) had been re-appointed asIndependent Director of the Company by the Shareholders in their Annual General Meetingheld on 30-09-2019.

Mr. Ajay Arora (DIN 00314161) had been re-appointed as IndependentDirector of the Company by the Shareholders in their Annual General Meeting held on30-09-2019.

Further in accordance with the provisions of the Companies Act 2013and Articles of Association of the Company Sh. Dharam Pal Sharma (DIN 07284332) and ShRajneesh Bansal (DIN 00077230) Directors of the Company retire by rotation in the ensuingAnnual General Meeting and being eligible offer themselves for re-appointment.

Mr. Sat Paul Bansal (DIN 00077499) resigned from the position ofChairman cum Managing Director w.e.f. 31/08/2020.

The Board of Directors of the Company had re-appointed Sh RajneeshBansal (DIN 00077230) as Executive Director and approved his remuneration w.e.f.01-04-2020 subject to approval of Members in the ensuing Annual General Meeting. Furtherthe Board appointed him as the Managing Director of the Company and revised hisremuneration in its Board meeting held on 18-08-2020 w.e.f. 01-09-2020 subject toapproval of Members in the ensuing Annual General Meeting.

The Board of Directors of the Company had re-appointed Sh. Dharam PalSharma (DIN 07284332) as Designated Whole Time Director and approved his remunerationw.e.f. 01-04-2020 subject to approval of Members in the ensuing Annual General Meeting.

Further details are given in the Explanatory Statement to the item no.7 and 8 of the Notice.

Further Sh. Arjun Pandurang Ghugal (DIN 02414741) was appointed asIndependent Director of the Company by the Shareholders of the Company in their AnnualGeneral Meeting held on 28.09.2015 for a term of 5 consecutive years upto the AnnualGeneral Meeting for the Financial Year 2019-20. Accordingly the term of Sh. ArjunPandurang Ghugal will expire at the ensuing AGM of the Company.

Further Mr. Uma Shankar Paliwal (DIN: 06907963) Independent Directorof the Company has resigned from his office with effect from 16th August 2020and his resignation has been accepted by the Board in its meeting held on 18-08-2020.

The Brief Resumes and other details relating to the Directors who areproposed to be appointed/re- appointed and whose remuneration is being fixed/varied asrequired to be disclosed under Regulation 36 of the SEBI (LODR) Regulations 2015 and perSecretarial Standards-2 form part of the Notice of Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51)and 203 of the Companies Act 2013 as on 31.03.2020 are as follows:

Sh. Sat Paul Bansal Chairman cum Managing Director
Smt Bhupinder Kaur Chief Financial Officer
Sh. Hardam Singh Company Secretary

Mr. Sat Paul Bansal (DIN 00077499) resigned from the position ofChairman cum Managing Director w.e.f. 31-08-2020 and in his place Sh Rajneesh Bansal (DIN00077230) has been appointed as the Managing Director and Key Managerial Personnel of theCompany w.e.f. 01-09-2020 subject to approval of Members in the ensuing Annual GeneralMeeting.

There was no change (appointment or cessation) in the office of KMPsduring the year under review.

A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITYEXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORSAPPOINTED DURING THE YEAR

No fresh appointment of any independent director has been made duringthe year under review. However with respect to re-appointment of three IndependentDirectors the Board do hereby state that in the opinion of the Board the saidIndependent Directors hold integrity expertise and experience (including the proficiencyif applicable) in terms of Rule 8(5)(iiia) of the Companies (Accounts) Rules 2014.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIESJOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:-

The information as required in terms of Rule 8(5)(iv) of the Companies(Accounts) Rules 2014 is as under:-

The Company has following two Subsidiaries:-

a. Paul Merchants Finance (P) Ltd (formerly known as Paul Fincap (Pvt)Ltd.) is the Wholly Owned subsidiary of the Company. The said subsidiary is engaged in thebusiness of Gold Loans Business/personal loans Distribution of Insurance products andPPI Instruments.

b. PML Realtors (Pvt) Ltd. is the Wholly Owned subsidiary of theCompany. The said subsidiary is engaged in buying and selling of Real Estate Projects.

The Company has no Associate Company but is having a Joint VentureCompany in the name of M/s Horizon Remit Sdn. Bhd. Malaysia.

There is no change in the Subsidiaries Joint Ventures Or AssociateCompanies of the Company during the year under review.

DEPOSITS

The Company has neither accepted nor renewed any deposits during theFinancial Year 2019-20 in terms of Chapter V of the Companies Act 2013. As suchinformation in this regard and also the information in terms of Rule 8 (5) (v) and Rule 8(5) (vi) of Companies (Accounts) Rules 2014 is nil.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passedby any Regulatory Authority Court or Tribunal which shall impact the going concern statusand Company's operations in future. As such the information in terms of Rule 8 (5) (vii)of the Companies (Accounts) Rules 2014 is nil.

DETAILS IN RESPECT OF INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACYWITH REFERENCE TO THE FINANCIAL STATEMENTS IN TERMS OF RULE 8 (5) (vim OF THE COMPANIES(ACCOUNTS) RULES 2014

Your Company has in place sound internal control system to ensure thatall assets are protected against loss from any unauthorised use and all transactions arerecorded and reported correctly. According to Section 134(5) (e) of the Companies Act2013 the term Internal Financial Control (IFC) means the policies and procedures adoptedby the company for ensuring the orderly and efficient conduct of its business includingadherence to company's policies safeguarding of its assets prevention and detectionof frauds and errors the accuracy and completeness of the accounting records and thetimely preparation of reliable financial information.

The Company has a well placed proper and adequate internal financialcontrol system commensurate with the size scale and complexity of its operations. Thescope and authority of the internal Audit function is well defined in the Organization.The internal financial control system ensures that all assets are safeguarded andprotected and that the transactions are authorised recorded and reported correctly. TheCompany's internal financial control system also comprises due compliances withCompany's policies and Standard Operating Procedures (SOPs) compliance with SEBI(Prevention of Insider Trading) Regulations. The compliance is ensured by in-houseInternal Audit Division supplemented by Concurrent and Statutory Audit. The InternalAuditors independently evaluate the adequacy of internal controls and regularly audit thetransactions. Independence of the audit and compliance is ensured by regular supervisionof the Audit Committee over Internal Audit findings. Significant audit observations andcorrective actions suggested are presented to the Audit Committee of the Board onQuarterly basis.

The Internal Financial Control systems in place in the Company havebeen reviewed by the Audit Committee on 24-06-2020 and by the Board of Directors of theCompany on 25-06-2020 and have satisfied themselves that the Internal Financial Controlsystems in place in the Company are adequate.

DISCOSURE AS TO COST AUDIT AND COST RECORDS

Maintenance of cost records as specified by the Central Governmentunder sub section (1) of Section 148 of the Companies Act 2013 is not required by theCompany and as such the Cost Audit is also not applicable to the Company. This disclosureis pursuant to Rule 8(5)(ix) of the Companies (Accounts) Rules 2014.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

Your Directors do hereby state in terms of Rule 8(5)(x) of theCompanies (Accounts) Rules 2014 that the Company has complied with provisions relating tothe constitution of Internal Complaints Committee under the Sexual Harassment Of Women AtWorkplace (Prevention Prohibition And Redressal) Act 2013 (14 of 2013) and has adopted apolicy for prevention of Sexual Harassment of Women at workplace. During the year underreview the Company has not received any complaint of harassment.

DECLARATIONS ON COMPLIANCE WITH CODE OF CONDUCT BY DIRECTORS AND THESENIOR MANAGEMENT PERSONNEL

The Annual Report of the Company contains a Declaration by the ManagingDirector in terms of Para D of Schedule V to the SEBI (LODR) Regulations 2015 on thedeclarations received from the Directors and the Senior Management personnel affirmingcompliance with the Code applicable to them during the year ended March 312020. ThisDeclaration has been given as Annexure D-12 to this Report.

REVIEW OF LEGAL COMPLIANCE REPORTS

During the year the Board periodically reviewed compliance reportswith respect to the various laws applicable to the Company as prepared and placed beforeit by the Management.

MAXIMUM TENURE OF INDEPENDENT DIRECTORS

The maximum tenure of independent directors is in accordance with theCompanies Act 2013 and Regulation 25(2) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The maximum tenure in one term of appointment of anIndependent Director does not exceed 5 years and for two terms put together does notexceed 10 years.

SHARE CAPITAL

a. ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any shares with Differential Rights duringthe year under review.

b. ISSUE OF SWEAT EQUITY SHARE

The Company has not issued any Sweat Equity shares or Employee StockOptions during the year under review.

The Authorized Equity Share Capital of the Company as on 31stMarch 2020 was Rs. 20000000/- and paid up Equity share capital was Rs. 10280000/-.

Further there was no buy back of its own shares by the Company andthere was no other change in the share Capital of the Company during the year underreview.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

The impact of Covid 19 and Company's preparedness to deal with theimplications arising out of this scenario have already been discussed in the beginning ofthis report. There are no other events to be reported under this head.

CORPORATE GOVERNANCE :-

Your Company is committed to maintain the highest standards ofCorporate Governance and is in compliance with the Corporate Governance Regulations aslaid out in the Securities And Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015. As required under Regulation 34 (3) read with Part C ofSchedule V to the Securities & Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance is annexedherewith as Annexure -D-10 and forms a part of this Annual Report.

A Compliance Certificate from Mr. Kanwaljit Singh Thanewal a CompanySecretary in practice having CP no. 5870 confirming compliance with the conditions ofCorporate Governance is also annexed with this Report as Annexure -D-11 as required underPart E of Schedule V to the Securities And Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.

BUSINESS RESPONSIBILITY REPORT

Regulation 34 (2) (f) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 is not applicable tothe Company because the Company is not among top 500 listed entities based on marketcapitalization as on 31-03-2020.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Management Discussion & Analysis Report for the year under reviewas stipulated under Part B of Schedule V to the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 is presented in aseparate section as Annexure D-3 forming part of this Annual Report.

PARTICULARS OF REMUNERATION OF DIRECTORS/ KMPs/EMPLOYEES:-

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) 5 (2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as AnnexureD-4 which forms part of this report.

DETAILS OF COMMISSION RECEIVED BY MANAGING DIRECTOR OR WHOLE TIMEDIRECTOR

A sum of Rs. 2400000/- (Rupees Twenty Four Lakhs Only) each was paidto Mr. Sat Paul Bansal Chairman cum Managing Director who has since resigned from hispost w.e.f. 31-08-2020 and Mr. Rajneesh Bansal Executive Director who has been appointedas Managing Director w.e.f. 01-09-2020 subject to the approval of the Shareholders ascommission for the Financial Year 2019-20 on the recommendation of the Nomination andRemuneration Committee of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in enclosing the Consolidated FinancialStatements of Paul Merchants Limited consolidating the financials of its Wholly OwnedSubsidiary Companies Paul Merchants Finance (Pvt) Ltd and PML Realtors (Pvt) Ltd and theJoint Venture Company M/s Horizon Remit Sdn. Bhd. Malaysia as required by Section 129(3)of the Companies Act 2013 (Act) and SEBI Listing Regulations. The said ConsolidatedFinancial Statements are prepared in accordance with the applicable Indian AccountingStandards prescribed by the Institute of Chartered Accountants of India.

INDIAN ACCOUNTING STANDARDS 2015

The annexed financial statements for the Financial Year 2019-20 andcorresponding figures for 2018-19 comply in all material aspects with Indian AccountingStandards (Ind AS) notified under section 133 of the Companies Act 2013 (the Act)[Companies (Indian Accounting Standards) Rules 2015] and other relevant provisions of theAct.

HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES/ASSOCIATES/JOINT VENTURES

The Company has two Wholly Owned Subsidiaries namely:-

a. Paul Merchants Finance (Pvt) Ltd. which is engaged in the businessof Gold Loans Business/personal loans distribution of Insurance products and PPIInstruments.

b. PML Realtors (Pvt) Ltd. which is engaged in buying and selling ofReal Estate Properties.

Further apart from above two wholly owned subsidiaries the Companyhas no Associate as defined in the Companies Act 2013. The Company has one Joint VentureCompany in the name of M/s Horizon Remit Sdn. Bhd. Malaysia. The Company holds 19.424%equity stake in the said Joint Venture Company. Weizmann Forex Ltd (CINL65990MH1985PLC037697) Transcorp Enterprises Limited ( CIN U65922RJ1995PLC010050) andWestern Union Processing Limited an Irish Limited Liability Company are the otherpartners in the said Joint Venture Company.

During the FY 2019-20 the Subsidiary Company Paul Merchants Finance(P) Ltd. (earlier known as Paul Fincap (Pvt) Ltd.) achieved gross revenue of Rs.435731731.89 as against previous year figures of Rs. 187156561.21 registering agrowth of 132.81% over previous year. Further the said Subsidiary Company achieved a Netprofit after Tax of Rs. 1511.61 Lakhs as against the previous year figures of Rs. 663.50Lakhs.

During the FY 2019-20 the Subsidiary Company PML Realtors (P) Ltd.achieved gross revenue of Rs. 3137856/- as against previous year gross revenue of Rs5846595/- respectively. Further the said Subsidiary Company achieved Net Profit afterTax of Rs.1572398.72 as against previous year figures of Rs. 3030359/-.

During the FY 2019-20 the JV Company M/s Horizon Remit Sdn. Bhd.Malaysia achieved gross revenue of RM 41.97 Lakhs as against previous year gross revenueof RM. 55.42 Lakhs. Further the JV incurred loss of RM 8.80 Lakhs as against profit of RM2.74 Lakhs earned during the previous year. The financial year of the JV Company ends on31-12-2020 and accordingly these figures have been arrived at on the basis of unauditedFinancial information for the quarter ending Mar 2020 and audited Financial Statements forthe period ended Dec 2019.

On a consolidated basis the revenue from operations for FY 2019-20 wasRs. 5401.12 crore i.e. higher by 10% over the previous year's revenue of Rs. 4916.94crore. The consolidated profit after tax (PAT) attributable to shareholders andnon-controlling interests for FY 2020 and FY 2019 was Rs. 26.37 Crore and Rs. 22.08 Crorerespectively registering a growth of 19.43 percent over the PAT for FY 2019. Thecontribution by each company to the overall performance of the company during the periodunder report is detailed below:

Name of the Company

Share in profit or loss for year ending 31st March 2020

Share in profit or loss for year ending 31st March 2019

as %age of consolidated profit or loss Amount (Rs in Lacs) as %age of consolidated profit or loss Amount (Rs in Lacs)
Paul Merchant Limited 44.27% 1189.53 68.17% 1505.13
Subsidiary Companies: - -
Paul Merchants Finance Private Limited 56.26% 1511.62 30.05% 663.50
PML Realtors Private Limited 0.59% 15.72 1.37% 30.30
Joint Venture (Investment as per Equity Method):
M/s Horizon Remit BHD. SDN. Malaysia -1.11% -29.83 0.41% 9.01
Sub Total 2687.04 2207.95
Adjustments arising out of consolidation -49.63
TOTAL 2637.41 2207.95

Report on the performance and Financial position of the SubsidiaryCompanies and Joint Venture Company in the specified format AOC-1 is annexed to theDirectors' Report as Annexure D-6.

AUDIT COMMITTEE

Your Directors wish to inform that in Compliance with Section 177 ofthe Companies Act 2013 and Regulation 18 of Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 an Audit Committee ofthe Board is duly constituted. The Audit Committee as on March 312020 comprises of thefollowing Independent Directors:

Shri. Vigyan Prakash Arora Independent Director Chairman
Shri Dilbag Singh Sidhu Independent Director Member
Shri Ajay Arora Independent Director Member

Details of the Audit Committee have been given separately in theCorporate Governance report which is annexed herewith as Annexure D-10. Further allrecommendations of Audit Committee were accepted by the Board of Directors.

NOMINATION & REMUNERATION COMMITTEE

In terms of Regulation 19 of Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and pursuant to theprovisions of Section 178 (1) of the Companies Act 2013 Nomination & RemunerationCommittee of the Board is duly constituted. As on March 31 2020 the Committee comprisesof the following Directors:

Sh. Dilbag Singh Sidhu Independent Director Chairman
Sh. Sandeep Bansal Non Executive Director Member
Shri. Vigyan Prakash Arora Independent Director Member

The details of Remuneration Policy and this Committee are furnished inthe Report on Corporate Governance which is annexed herewith as Annexure D-10.

STAKEHOLDERS RELATIONSHIP COMMITTEE

In terms of Regulation 20 of Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and pursuant to theprovisions of Section 178 (2) of the Companies Act 2013 the Stakeholders RelationshipCommittee of the Board is duly constituted. As on March 312020 the Committee comprises ofthe following Directors:

Sh. Vigyan Prakash Arora Independent Director Chairman
Sh. Rajneesh Bansal Executive Director Member
Sh. Sandeep Bansal Non Executive Director Member

Other details of the Committee have been given separately in theCorporate Governance report which is annexed herewith as Annexure D-10.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

There is no change in the Capital Structure of the Company during theyear under review. The Shares of the Company are listed and traded at BSE Ltd under scripcode 539113.

VIGIL MECHANISM

The Company has established a Vigil Mechanism cum Whistle Blower Policyin terms of Section 177 (10) of the Companies Act 2013 and also in terms of Regulation 4(2) (d) and Regulation 22 of Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The details of the said Vigil Mechanism cumWhistle Blower Policy is given in the Corporate Governance Section which is appended tothis Report. The Vigil Mechanism cum Whistle Blower Policy is also available on theCompany's website under weblink http://www.paulmerchants.net/paulmerchants/wp-content/uploads/2019/04/Vigil-Mechanism-policy-07-02-2019.pdf.

INDUSTRIAL RELATIONSHIPS:-

Relations between the Management and the employees at all levels havebeen cordial and the Directors wish to express their appreciation for the cooperation anddedication of the employees of the Company.

HUMAN RESOURCES DEVELOPMENT

The Company has always taken its Human capital in highest esteem. Ithas always been the focus of the Company to attract and retain the good talent which hasbeen the cornerstone of the success and growth. The Company has put in place a robustTalent Acquisition system which enables various Verticals of the Company to match theirunpredictable needs with predictable resource supply. The continuous pursuit of theCompany to connect and interact with all levels of the employees on a regular basisproviding them a free and fair environment to showcase their talent transparency inelevations progressive HR processes and policies and distinct PML Family culture hasalways yielded results and will continue to contribute to the growth and progress of theCompany for all times to come. As on 31-03-2020 the Company has 387 people on its Rolls.

COMPLIANCE

The company has devised proper systems to ensure compliance of all lawsapplicable to the company and the compliance reports issued by the Departmental Headsalong with the report of the Company Secretary under Section 205 of the Companies Act2013 are placed before the Board every Quarter confirming compliance by the Company withall applicable Laws. In addition the Internal Audit and Concurrent Audit helps theCompany gauge its levels of Compliance on ongoing basis and to take corrective stepswherever needed.

COMPLIANCE WITH LISTING REGULATIONS:-

The equity shares of the company are listed on BSE Ltd (BSE). TheCompany has in place the following Policies as required under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015:

1. ‘Policy for Preservation of Documents' under Regulation 9of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

2. ‘Archival Policy' under Regulation 30 of SEBI (ListingObligations and Disclosure Requirements)

Regulations 2015. The web link of ‘Archival Policy' is

http://www.paulmerchants.net/paulmerchants/wp-content/uploads/2018/07/Policy-on-Archival-of-Records.pdf

3. ‘Policy on Criteria for determining Materiality ofevents/information' under Regulation 30 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The web link of the ‘Policy on Criteria fordetermining Materiality of events/information' is;

http://www.paulmerchants.net/paulmerchants/wp-content/uploads/2019/04/Policy-Determination-of-Materiality-23.04.2019.pdf

The company has already paid listing fees for the year 2020-21 to BSELtd. and has also paid the Annual Custodial fee to the Depositories for the year 2020-21.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standardsissued by the Institute of Company Secretaries of India and approved by the CentralGovernment under Section 118(10) of the Act.

INSIDER TRADING:

The Board of Directors of the Company have adopted the Code ofPractices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.The said Code has been posted on the Website of the Company www.paulmerchants.net.Further the Board has also adopted the Code Of Conduct To Regulate Monitor And Report OfTrading By Designated Persons in accordance with the requirements of the SEBI (Prohibitionof Insider Trading) Regulations 2015. The Insider trading policy of the company lays downguidelines and procedures to be followed and disclosures to be made while dealing withshares of the Company as well as the consequences of violation. The said codes were dulyadhered to during the year under review.

CEO/CFO CERTIFICATION

In accordance with the Regulation 17 (8) read with Part B of ScheduleII to the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 pertaining to corporate governance norms Mr. Sat PaulBansal Managing Director and Ms. Bhupinder Kaur Chief Financial Officer (CFO) haveissued a certificate as per the contents of said Regulation for the year ended March 312020. As the Company has no post of Chief Executive Officer (CEO) the said Certificatehas been signed by the Managing Director of the Company along with CFO. The saidcertificate forms an integral part of this Annual Report as Annexure D-13. The certificatehas been reviewed by the Audit Committee and taken on record by the Board of Directors.

DEMATERIALIZATION OF SHARES

The Company's equity shares are in compulsory Demat mode in termsof SEBI Guidelines. This has been facilitated through arrangement with NSDL and CDSL.About 97.62% of the issued shares of the Company are already in dematerialized form as on31-03-2020. M/s Alankit Assignments Limited New Delhi are acting as the Registrar andShare Transfer Agents for this purpose and acts as common agency and all activities inrelation to share transfer facility are maintained by them in terms of Regulation 7 (2) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for aperiod of seven years as on 31-032020. Therefore there were no funds which were requiredto be transferred to Investor Education and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 the Company shallmake requisite compliances as per the said Rules at appropriate time.

FINANCIAL STATEMENTS

Annual Report 2019-20 of the Company containing Standalone as well asConsolidated Balance Sheet Statement of Profit & Loss Cash Flow Statement otherstatements and notes thereto prepared as per the requirements of Schedule III to theCompanies Act 2013 Directors' Report (including Management Discussion and AnalysisReport and Corporate Governance Report) is being sent via email to all shareholders whohave registered email address(es). Full version of Annual Report 2019-20 is also availablefor inspection at the registered office of the Company during working hours upto the dateof ensuing Annual General Meeting (AGM). It shall also be available at the Company'swebsite www.paulmerchants.net on the website of the Stock Exchange i.e. BSE Limited atwww.bseindia.com. The Notice of the AGM shall also be available at the website of CDSL.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to valuedClients Reserve Bank of India Bankers Government Agencies and Employees of the companyfor their continued support & co-operation.

For & On Behalf of the Board For & On Behalf of the Board
(SAT PAUL BANSAL) (RAJNEESH BANSAL)
CHAIRMAN CUM MANAGING DIRECTOR EXECUTIVE DIRECTOR
(DIN 00077499) (DIN 00077230)
PLACE: CHANDIGARH
Date: August 18 2020

NOMINATION AND REMUNERATION POLICY

This Nomination and Remuneration Policy has been formulated incompliance with Section 178 of the Companies Act 2013 read along with the applicableRules thereto and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) as amended from time totime. Any amendment in the said Acts/Regulations at any point of time in future shall beautomatically deemed to be incorporated herein. This policy on nomination and remunerationof Directors Key Managerial Personnel and Senior Management had originally beenformulated by the Nomination and Remuneration Committee (NRC or the Committee) andapproved by the Board of Directors on 04-08-2014. Further the said Policy has been amendedby the Board of Directors on 07-022019 in the light of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Amendment Regulations 2018.

1. OBJECTIVE

The Nomination and Remuneration Committee and this Policy shall be incompliance with Section

178 of the Companies Act 2013 read along with the applicable rulesthereto and the Listing

Regulations. The Key Objectives of the Committee would be:

1.1. To guide the Board in relation to appointment and removal ofDirectors Key Managerial Personnel and Senior Management.

1.2. To evaluate the performance of the members of the Board andprovide necessary report to the Board for further evaluation of the Board.

1.3. To recommend to the Board on Remuneration payable to theDirectors Key Managerial Personnel and Senior Management.

1.4. To recommend for Key Managerial Personnel and Senior Managementreward linked directly to their effort performance dedication and achievement relatingto the Company's operations.

1.5. To retain motivate and promote talent and to ensure long termsustainability of talented managerial persons and create competitive advantage.

1.6. To devise a policy on Board diversity

1.7. To develop a succession plan for the Board and to regularly reviewthe plan;

2. DEFINITIONS

2.1. Act means the Companies Act 2013 and Rules framed thereunder asamended from time to time.

2.2. Board means Board of Directors of the Company.

2.3. Directors mean Directors of the Company.

2.4. Key Managerial Personnel means

2.4.1. Chief Executive Officer or the Managing Director or the Manager;

2.4.2. Whole-time director;

2.4.3. Chief Financial Officer;

2.4.4. Company Secretary; and

2.4.5. Such other officer as may be prescribed.

2.5. Senior Management means officers/ personnel of the Company who aremembers of its core management team excluding board of directors and normally this shallcomprise all members of management one level below the chief executive officer/ managingdirector/ whole time director/manager (including chief executive officer/ manager in casethey are not part of the board) and shall specifically include company secretary and chieffinancial officer.

2.6. "Remuneration" means money or its equivalent given orpassed to any person for services rendered by him and includes perquisites as definedunder the Income-tax Act 1961;

3. ROLE OF COMMITTEE

3.1. Matters to be dealt with perused and recommended to the Board bythe Nomination and Remuneration Committee

The Committee shall:

a. To formulate and recommend to the Board a Nomination andRemuneration Policy of the Company as per the Companies Act 2013 applicable RBIGuidelines and Regulation 19(4) of SEBI (LODR) Regulations 2015 from time to time.

b. To recommend addition/modification to the Nomination &Remuneration Policy to the Board from time to time.

c. Formulate the criteria for determining qualifications positiveattributes and independence of a director and recommend to the board of directors a policyrelating to the remuneration for the directors key managerial personnel and otheremployees as per the Companies Act 2013 applicable RBI Guidelines and Regulation 19(4)of SEBI (LODR) Regulations 2015 as amended from time to time

d. To recommend addition/modification to the Nomination &Remuneration Policy to the Board from time to time.

e. formulation of criteria for evaluation of performance of independentdirectors and the board of directors

f. devising a policy on diversity of board of directors

g. identifying persons who are qualified to become directors and whomay be appointed in senior management in accordance with the criteria laid down andrecommend to the board of directors their appointment and removal and shall specify themanner for effective evaluation of performance of Board its committees and individualdirectors to be carried out either by the Board by the Nomination and RemunerationCommittee or by an independent external agency and review its implementation andcompliance

h. whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors

i. Recommend to the Board appointment and removal of Directors KMPsand Senior Management Personnel.

j. recommend to the board all remuneration in whatever form payableto senior management

k. Oversee familiarisation programmes for directors.

l. Provide guidelines for remuneration of directors on materialsubsidiaries.

m. Performing such other duties and responsibilities as may beconsistent with the provisions of the Companies Act SEBI (LODR) Regulations 2015 or anyapplicable Statute as the Committee may deem appropriate after the approval of the Boardor as may be directed by the Board from time to time.

3.2. Policy for appointment and removal of Directors KMPs and SeniorManagement Personnel

3.2.1. Appointment criteria and qualifications

a) The Committee shall identify and ascertain the integrityqualification expertise and experience of

the person for appointment as Director KMP or at Senior Managementlevel in line with the

Business of the Company the Industry Structure which the Companyoperates in and recommend

to the Board his / her appointment.

b) A person should possess adequate qualification expertise andexperience for the position he / she is considered for appointment to ensure that he/sheis able to discharge his duties in a diligent manner. The Committee has discretion todecide whether qualification expertise and experience possessed by a person is sufficient/ satisfactory for the concerned position.

c) The Company shall not appoint or continue the employment of anyperson as Whole-time Director who has attained the age of seventy years. Provided thatthe term of the person holding this position may be extended beyond the age of seventyyears with the approval of shareholders by passing a special resolution based on theexplanatory statement annexed to the notice for such motion indicating the justificationfor extension of appointment beyond seventy years.

d) A person shall be eligible for appointment as managing director ofthe company if he has worked as whole time director or manager for at least 3 years in apublic limited company.

e) The Chief Financial Officer of the Company shall necessarily be amember of Institute of Chartered Accountants of India. The Company Secretary of theCompany shall necessarily be a member of Institute of Company Secretaries of India. Forany other position in the Senior Management where a specific educational qualification isdesirable to discharge the functions and duties attached to that particular position theperson shall necessarily be holding that qualification.

3.2.2. Term / Tenure

a) Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its ExecutiveChairman Managing Director or Executive Director for a term not exceeding five years at atime. No re-appointment shall be made earlier than one year before the expiry of term.

b) Independent Directors:

> An Independent Director shall hold office for a term up to fiveconsecutive years on the Board of the Company and will be eligible for re-appointment onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report.

> No Independent Director shall hold office for more than twoconsecutive terms but such Independent Director shall be eligible for appointment afterexpiry of three years of ceasing to become an Independent Director. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.However if a person who has already served as an Independent Director for 5 years or morein the Company as on October 12014 or such other date as may be determined by theCommittee as per regulatory requirement; he/ she shall be eligible for appointment for onemore term of 5 years only.

> At the time of appointment of Independent Director it should beensured that number of Boards on which such Independent Director serves is restricted toseven listed companies as an Independent Director and three listed companies as anIndependent Director in case such person is serving as a Whole-time Director of a listedcompany or such other number as may be prescribed under the Act.

3.2.3. CHART SETTING OUT THE SKILLS/EXPERTISE/COMPETENCE OF THE BOARDOF DIRECTORS:-

Core skills/expertise/ competencies identified by the board of directors as required in the context of its business(es) and sector(s) for it to function effectively 1. Ability to understand Financial Markets especially Forex Markets
2. Ability to understand Regulatory/Statutory framework applicable to the Company
3. Quick decision making
4. Understanding of Company's business verticals
5. Experience in developing policies and processes relating to corporate governance
6. Leaderships skills for guiding the management team
7. Ability to formulate long term and short term business strategies
8. Ability to understand Financial Statements

3.2.4. Evaluation

The Committee shall carry out evaluation of performance of everyDirector KMP and Senior Management Personnel at regular interval (yearly) on the basis offollowing criteria:-

a. Criteria for evaluation of the Board of Directors as a whole:

i. The Frequency of Meetings

ii. Quantum of Agenda

iii. Administration of Meetings

iv. Flow and quantity of Information from the Management to the Board

v. Number of Committees and their role.

vi. Overall performance of the Company

b. Criteria for evaluation of the Board Committees

i. The Frequency of Meetings

ii. Quantum of Agenda

iii. Administration of Meetings

iv. Flow and quantity of Information from the Management to theCommittee

v. Role of Committees.

vi. Contribution to the decision making process of the Board.

c. Criteria for evaluation of the Individual Directors includingIndependent Directors;

i. Experience and ability to contribute to the decision making process

ii. Problem solving approach and guidance to the Management

iii. Attendance and Participation in the Meetings

iv. Personal competencies and contribution to strategy formulation

v. Contribution towards statutory compliances monitoring of controlsand Corporate Governance

vi. The evaluation of independent directors shall be done by the entireboard of directors which shall include -

(a) Performance of the directors; and

(b) fulfillment of the independence criteria as specified in theseregulations and their independence from the management:

Provided that in the above evaluation the directors who are subject toevaluation shall not participate

The performance evaluation of all the Independent Directors shall bedone by the entire Board and

while doing so the Director subject to evaluation shall notparticipate. On the basis of performance evaluation done by the Board it will bedetermined whether to extend or continue their term of appointment whenever theirrespective term expires.

d. Criteria for evaluation of the KMPs and Senior Management Personnel

i. Problem solving approach

ii. Suitability to the post on the basis of qualification experienceand expertise

iii. General conduct and discipline

iv. Team work

v. Compliance with Regulatory Matrix

vi. Contribution to the formulation of the strategies

3.2.5. Removal

Due to reasons for any disqualification mentioned in the Act or underany other applicable Act rules and regulations thereunder or due to other valid reasonsas recorded in writing by the Committee the Committee may recommend to the Board withreasons recorded in writing removal of a Director KMP or Senior Management Personnelsubject to the provisions and compliance of the said Act rules and regulations.

3.2.6. Retirement

The Director KMP and Senior Management Personnel shall retire as perthe applicable provisions of the Act and the prevailing policy of the Company. The Boardwill have the discretion to retain the Director KMP Senior Management Personnel in thesame position/ remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.

3.3. Policy relating to the Remuneration for the Whole-time DirectorsKMPs and Senior Management Personnel

3.3.1. General:

(a) The remuneration / compensation / commission etc. to the Whole-timeDirectors KMPs and Senior Management Personnel will be determined by the Committee andrecommended to the Board for approval. The remuneration / compensation / commission etc.shall be subject to the prior/post approval of the shareholders of the Company and CentralGovernment wherever required.

(b) The remuneration to be paid to the Whole-time Directors shall be inaccordance with the percentage / slabs / conditions laid down in the Articles ofAssociation of the Company and as per the provisions of the Act.

(c) Increments to the existing remuneration/ compensation structure maybe recommended by the Committee to the Board which should be within the slabs approved bythe Shareholders in the case of Whole-time Directors. Further in case of KMPs and SeniorManagement the increments shall be allowed not only on the basis of performance of theCompany but shall also include various factors like individual performance vis a visindividual KRA diligence in achievement of KRAs Industry trends economic situationfuture growth prospects of the Company etc.

(d) Where any insurance is taken by the Company on behalf of itsWhole-time Director Chief Executive Officer Chief Financial Officer the CompanySecretary and any other employees for

indemnifying them against any liability the premium paid on suchinsurance shall not be treated as part of the remuneration payable to any such personnel.Provided that if such person is proved to be guilty the premium paid on such insuranceshall be treated as part of the remuneration.

3.3.2. Remuneration to Whole-time Directors/ Executive / ManagingDirector KMP and Senior Management Personnel:

a. Remuneration to Managing Director / Whole-time Directors:

i. The Remuneration/ Commission etc. to be paid to Executive/ ManagingDirector / Wholetime Directors etc. shall be governed as per provisions of the CompaniesAct 2013 Rules made thereunder provisions of SEBI (LODR) Regulations as amended fromtime to time or any other enactment for the time being in force and as per the approvalsobtained from the Members of the Company.

ii. The Nomination and Remuneration Committee shall make suchrecommendations to the Board of Directors as it may consider appropriate with regard toremuneration to Executive/Managing Director / Whole-time Directors.

iii. Minimum Remuneration: If in any financial year the Company hasno profits or its profits are inadequate the Company shall pay remuneration to itsWhole-time Directors in accordance with the provisions of Schedule V of the Act and if itis not able to comply with such provisions the Company shall pay Remuneration with theprevious approval of the Central Government.

iv. Provisions for excess remuneration: If any Whole-time Directordraws or receives directly or indirectly by way of remuneration any such sums in excessof the limits prescribed under the Act or without the prior sanction of the CentralGovernment where required he / she shall refund such sums to the Company and until suchsum is refunded shall hold it in trust for the Company. The Company shall not waiverecovery of such sum refundable to it unless permitted by the Central Government.

b. Remuneration to Non- Executive / Independent Directors:

a. The Non-Executive / Independent Directors may receive sitting feesand such other remuneration as permissible under the provisions of Companies Act 2013.The amount of sitting fees shall be such as may be recommended by the Nomination andRemuneration Committee and approved by the Board of Directors or in any other manner asdecided by the Board of Directors.

b. All the remuneration of the Non- Executive / Independent Directors(excluding remuneration for attending meetings as prescribed under Section 197 (5) of theCompanies Act 2013) shall be subject to ceiling/ limits as provided under Companies Act2013 and rules made thereunder or any other enactment for the time being in force. Theamount of such remuneration shall be such as may be recommended by the Nomination andRemuneration Committee and approved by the Board of Directors or shareholders as the casemay be.

c. An Independent Director shall not be eligible to get Stock Optionsand also shall not be eligible to participate in any share based payment schemes of theCompany.

d. Any remuneration paid to Non- Executive / Independent Directors forservices rendered which are of professional in nature shall not be considered as part ofthe remuneration for the purposes of clause (b) above if the following conditions aresatisfied:

i. The Services are rendered by such Director in his capacity asprofessional; and

ii. In the opinion of the Committee the director possesses therequisite qualification for the practice of that profession.

iii. In case the Company decides to offer any Employee Stock Option/Purchase Schemes in future the Committee shall determine the stock options and othershare based payments to be made to the eligible Directors (other than IndependentDirectors).

c. Remuneration to key managerial personnel and senior manaqement:-

a) The remuneration to Key Managerial Personnel and Senior Managementshall be in compliance with the applicable provisions of the Companies Act 2013 and inaccordance with the Company's Policy and shall be reviewed by the Committee from timeto time.

b) In case the Company decides to offer any Employee Stock Option/Purchase Schemes in future the Nomination and Remuneration Committee of the Companyshall determine the stock options and other share based payments to be made to KeyManagerial Personnel and Senior Management.

c) The Fixed pay shall include monthly remuneration employer'scontribution to Provident Fund contribution to pension fund pension schemes etc. asdecided by the Company from to time.

d) The Incentive pay shall be in the form of Performance Bonus andshall be decided based upon the balance between performance of the Company and performanceof the Key Managerial Personnel and Senior Management to be decided annually or at suchintervals as may be considered appropriate.

4. POLICY ON BOARD DIVERSITY: The Board shall comprise of Directorshaving expertise in different areas / fields like Finance Accounts Business DevelopmentSales and Marketing Banking Regulatory Framework Human Resource management etc. or asmay be considered appropriate. In designing the Board's composition Board diversityhas been considered from a number of aspects including but not limited to gender agecultural and educational background ethnicity professional experience skills andknowledge. The Board shall have at least one Board member who has accounting or relatedfinancial management expertise and at least one women director.

5. MEMBERSHIP OF COMMITTEE

5.1 The Committee shall consist of minimum 3 non-executive directorsmajority of them being independent.

5.2 The quorum for a meeting of the Nomination and RemunerationCommittee shall be either 2 members or 1/3rd of the members of the committeewhichever is greater including at least one independent director in attendance.

5.3 Membership of the Committee shall be disclosed in the AnnualReport.

5.4 Term of the Committee shall be continued unless terminated by theBoard of Directors.

6. CHAIRPERSON

6.1 Chairperson of the Committee shall be an Independent Director.

6.2 Chairperson of the Company may be appointed as a member of theCommittee but shall not be a Chairman of the Committee.

6.3 In the absence of the Chairperson of the Committee the members ofthe Committee present at the meeting shall choose one amongst them to act as Chairperson.

6.4 Chairman of the Nomination and Remuneration Committee meeting wouldbe present at the

Annual General Meeting or may nominate some other member to answer theshareholders' queries.

7. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such regular intervals asmay be required however the Committee shall meet at least once in a year. Further itshall be ensured that such minimum number of meetings of the committee are held asrequired under the Companies Act 2013 Rules framed thereunder and under SEBI (LODR)Regulations.

8. COMMITTEE MEMBERS' INTERESTS

8.1 The disclosure of Interest and participation in the meetings by amember of the Committee shall be as per the provisions of the Act and Rules madethereunder from time to time.

8.2 The Committee may invite such executives professionalsconsultants or experts as it considers appropriate to be present at the meetings of theCommittee.

9. SECRETARY

The Company Secretary of the Company shall act as Secretary of theCommittee.

10. VOTING

10.1 Matters arising for determination at Committee meetings shall bedecided by a majority of votes of Members present and voting and any such decision shallfor all purposes be deemed to be decision of the Committee.

10.2 In the case of equality of votes the Chairman of the meeting willhave a casting vote.

11. MINUTES OF COMMITTEE MEETING

Proceedings of all meetings must be recorded as per the Provisions ofthe Companies Act 2013 and Secretarial Standards and signed by the Chairman of theCommittee or the chairman of the subsequent meeting. Minutes of the Committee meetingswill be tabled at the subsequent Board and Committee meeting.

(Sd/-)
Sat Paul Bansal
Chairman of the Board
For & On Behalf of the Board For & On Behalf of the Board
(SAT PAUL BANSAL) (RAJNEESH BANSAL)
CHAIRMAN CUM MANAGING DIRECTOR EXECUTIVE DIRECTOR
(DIN 00077499) (DIN 00077230)
PLACE: CHANDIGARH
Date: August 18 2020

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