Mar 31, 2018
To,
THE MEMBERS OF CEEJAY FINANCE LIMITED
The Directors are pleased to present their TWENTY FIFTH (Silver Jubilee year) Annual Report together with the audited accounts of the Company for the year ended 31st March 2018.
FINANCIAL RESULTS:
(Rs. in Lacs)
PARTICULARS |
YEAR ENDED |
YEAR ENDED |
31/03/2018 |
31/03/2017 |
|
Revenue From Operations |
1638.70 |
1426.74 |
Total Revenue |
1642.35 |
1427.71 |
Profit Before Depreciation & Tax |
792.10 |
714.81 |
Depreciation |
14.42 |
15.88 |
Profit before Tax |
777.68 |
698.93 |
Provision for tax |
||
Current |
219.84 |
231.00 |
Deferred |
(0.27) |
0.07 |
Provision of Income Tax of earlier period |
2.02 |
0.39 |
Profit After Tax |
556.09 |
467.47 |
Balance of Profit brought forward |
167.86 |
68.89 |
Profit available for Appropriation |
723.95 |
536.36 |
APPROPRIATION |
||
Dividend Paid 16-17 |
51.75 |
-- |
Corporate tax on Dividend 16-17 |
10.53 |
-- |
Transferred to |
||
Statutory reserve |
111.00 |
93.50 |
General reserve |
300.00 |
275.00 |
Balance Carried to Balance Sheet |
250.67 |
167.86 |
Proposed Dividend 2017-18 |
86.25 |
51.75 |
DIVIDEND:
The Company has completed 25 years of successful existence in financial market. And as a part of its celebration, the Board is pleased to recommend additional 10% dividend over and above the regular proposed / recommended dividend of 15% making total dividend of 25% (Rs. 2.50 per share) for the financial year ended 31st March, 2018, on the paid up Equity Share Capital of the Company. The dividend, if approved by the members, will be paid to members within the period stipulated by the Companies Act, 2013.
UNCLAIMED DIVIDEND AND TRANSFER OF SHARES TO IEPF
The unclaimed dividend as on 31st March, 2018 was Rs. 19.50 Lakhs. The unpaid/unclaimed dividend of Rs. 1.93 Lakhs for the financial year 2009-10 has been transferred to the Investor Education and Protection Fund during the year.
Pursuant to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 50,390 equity shares have been transferred to Investor Education and Protection Fund during the year. The Company has duly complied with relevant applicable provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
COMPANYâS AFFAIRS AND FUTURE OUTLOOK:
Your Company has continued to grow steady but substantially due to the concerted marketing efforts in new business centers, new product, and prudent recovery system. Company has increased in growth in operations and profit during fiscal 2018-19. Total revenue including income from operations and other income increased to Rs. 1638.70 Lakhs in the current year from Rs. 1426.74 Lakhs in previous year. The total expenses increased from Rs. 728.78 Lakhs in previous year to Rs. 864.67 Lakhs in current year, mainly towards provisions of doubtful debt/ NPA and increase in sales expenses due to competition. The finance cost increased marginally to Rs. 292.47 Lakhs in the current year compared to Rs. 241.65 Lakhs in previous year due to increase in borrowings. Accordingly, the profit before tax increased from Rs. 698.93 Lakhs in the previous year to Rs. 777.68 Lakhs in the current year. After providing tax of Rs. 220 Lakhs in the current year (Rs. 231 Lakhs in previous year) profit after tax increased Rs.556.09 Lakhs against Rs. 467.47 Lakhs in the previous year.
The total disbursement made in the current year Rs. 5782.60 Lakhs as compared to Rs. 5721.40 Lakhs in previous year. The Companyâs strategy to focus for the business in smaller places and specialization in two/ three wheeler segment/used four wheelers/ property loan has remained unchanged. Hypothecation / loan stock of the Company has increased from Rs. 4969 Lakhs in previous year to Rs. 5393 Lakhs in the current year. The assets of the Company are properly and adequately insured and recoveries are at satisfactory level.
CHANGE IN NATURE OF BUSINESS, IF ANY
Your Company continues to operate in the single business segment as that of previous year and there is no change in the nature of the business.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments have occurred after the close of the financial year 31st March, 2018 till the date of this report, which affect or is likely to affect the financial position of the Company.
FINANCIAL PERFORMANCE
As on 31st March, 2018, against hypothecation of loan stock of Rs.5392.96 Lakhs (previous year Rs. 4969.00 Lakhs), Rs. 3427.27 is falling due within The company has made Rs.16.28 lacs (Previous year Rs.15.06 lacs) contingent provision against standard assets. Provision for Doubtful / Non performing assets (net) is Rs.34.87 lacs (Previous year Rs.9.80 lacs)
INTERNAL AUDIT AND COMPLIANCE:
The Company has Internal Audit and Compliance functions which are responsible for independently evaluating the adequacy of all internal controls and ensuring operating and business units adhere to internal processes and procedures as well as to regulatory and legal requirements. The audit function also recommends improvements in operational processes and service quality. To mitigate operational risks, the Company has put in place extensive internal controls including restricted access to the Companyâs computer systems, appropriate segregation of front and back office operations and strong audit trails. The Audit Committee of the Board also reviews the performance of the audit and compliance functions and reviews the effectiveness of controls and compliance with regulatory guidelines. The Board has formed a new audit committee considering the requirement under the Companies Act, 2013 and rules made thereunder. Along with keeping in view the requirement under listing agreement.
RESOURCE MOBILATION/ICRA RATING
Cost of funds for retail-focused NBFCs, which remained high at 12%-14%, is likely to increase during the year. As mentioned earlier, Company is in constant search to avail cheaper fund to reduce our cost of funds. The cash credit limit of the Company has remained at Rs. 1500 Lakhs with the Banks.
The Company has discontinued accepting or renewing fresh deposits, therefore there no outstanding fixed deposit as on date. Inter Corporate Deposit increased from Rs. 1200 Lakhs in the previous year to Rs. 1450 Lakhs in current year.
The Company has obtained CARE rating for Rs. 1500 Lakhs Cash Credit Limits from Bank. CARE has upgraded it and has assigned BBB- (Stable) from BB (Stable) ratings for the same.
CAPITAL ADQUACY
Your Companyâs Capital Adequacy Ratio (CAR) stood at 59.57 % well above the regulatory minimum of 15%. The revised Guidelines issued by R.B.I for recognition of Income, asset classification, Investment accounting, provision for non-performing assets and capital adequacy have been followed by your Company. The Company has also made the provision for non-performing assets in case of Sub-standard, doubtful and loss assets as per R.B.I. guidelines.
PUBLIC DEPOSITS
The Company has not accepted any deposits from the public within the meaning of provision of Non- Banking financial Companies accepted of public deposits (reserve banks) direction, 1988.
As reported earlier, the Company has discontinued to accept or renewed fresh/existing fixed deposits. At the close of the year, no amount remained unclaimed or unpaid. The Company does not have any claimed but unpaid deposits.
DIRECTORATE/KMP
Mr. Harshad Dalal (DIN: 00080903) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. There was no change in the Board of Directors during the year under review.
The Board of Directors of the Company hereby confirms that all the Independent Directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.
Effective from 11th November, 2017, Mr. Dipak T. Shah has resigned from the post of Chief Financial Officer of the Company and in his place the Board has appointed Mr. Devang S. Shah as CFO.
Further in terms of the provisions of Regulation 3(d)(ii) (to be effective from 1st April, 2019) of SEBI (Listing Obligations And Disclosure Requirements) (Amendment) Regulations, 2018 dated 9th May, 2018 requiring approval of the members by special resolution for appointment / continuation of appointment of directors having attained age of 75 years, the Board seek consent of the members of the Company for continuation of Mr. Harshad N Dalal and Mr. Kirit S Dalal, Directors of the Company, w.e.f. 1st April, 2019.
CORPORATE GOVERNANCE
As per regulation 27(2) of the SEBI listing Obligations and Disclosure Requirements Regulations, 2015 with stock exchanges, your Company was required to implement the code of Corporate Governance. Accordingly, your Company has complied in all material respects with the features of the said code. A report on the same is given separately.
DIRECTORSâ RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, which states that-
(a) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the Annual Accounts on a going concern basis;
(e) the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
SECRETARIAL STANDARDS:
The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India i.e. Meetings of the Board of Directors and General Meetings.
LISTING AGREEMENT WITH STOCK EXCHANGES:
Pursuant to the provisions of listing agreement with stock exchanges, the equity shares of the Company are listed at Mumbai stock exchanges. The Stock Exchange Ahmedabad is inoperative and the Company has made application for delisting and awaits reply from the exchange. The company has not renewed or executed any listing agreement as per new regulations of SEBI.
DEPOSITORY SYSTEM
Your Company has established electronic connectivity with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. In view of the compulsory dematerialization of Companyâs equity shares on stock exchanges, members are requested to dematerialize the shares on either of the depositories as aforesaid.
The Board would like to bring to your notice that in terms of amended regulation 40 of the SEBI [LODR] Regulations, 2015 vide notification dated 8th June, 2018 and in terms of circular of BSE Limited dated 5th July, 2018, effective from December 5, 2018, all shares which are lodged for transfer shall be transferred in dematerialized form only. Hence those members who have yet not dematerialized their shares are hereby requested to dematerialize the same as early as possible. The Company is in the process of making necessary compliances as required to be made by it.
AUDITORS AND AUDITORS REPORT
The Company had appointed M/s. Arpit Patel & Associates, Chartered Accountants, (Firm Reg. No. 144032W) as Statutory Auditors of the Company at the 24th Annual General Meeting till the conclusion of 29th Annual General Meeting in compliance with the provision of Section 139[1] of the Companies Act, 2013. The Company has received a certificate from the M/s. Arpit Patel & Associates in accordance with the provisions of Section 141 of the Companies Act, 2013.
In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Tushar Vora, Company Secretary in practice to undertake the secretarial audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure âAâ.
CORPORATE SOCIAL RESPONSIBILITY
Since the net profit for the year ended 31st March, 2018 is more than Rs. 5 Crores, the Company has to comply with Corporate Social Responsibility rules in terms of the provisions of Section 135 of the Companies Act, 2013. Accordingly the Company has constituted CSR Committee at its Board meeting held on 29th May, 2018. The Committee comprises Mr. Bharat Amin as Chairman and Mr. Kiritkumar Dalal, Mrs. Mrudulaben Patel, Mr. Sunil G. Patel, and Mr. Deepak Patel as other members of the Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and remuneration Committee comprises of Mr. Bharat Amin as Chairman and Mr. Kiritkumar Dalal, Mrs. Mrudulaben Patel, Mr. Sunil G. Patel, and Mr. Deepak Patel as other members. The role and responsibilities, Companyâs policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other related matters are in conformity with the requirements of the Companies Act, 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015.
MEETING OF THE BOARD & AUDIT COMMITTEE
The Board of Directors and members of Audit Committee, during the financial year 2017-18 met five times. The Audit Committee comprises of Mr. Bharat Amin as Chairman and Mr. Kiritkumar Dalal, Mrs. Mrudulaben Patel and Mr. Sunil G. Patel and Mr. Deepak Patel as other members. The scope of Audit Committee is enhanced in accordance with the Companies Act, 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015.
STAKEHOLDERS RELATIONSHIP/SHARE TRANSFER COMMITTEE
The Stakeholders Relationship/Share Transfer Committee comprises of Mr. Bharat Amin as Chairman, Mr. Kiritkumar Dalal and Mrs. Mrudulaben Patel, Mr. Sunil G. Patel and Mr. Deepak Patel as other members, in accordance with the Companies Act, 2013 and SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015.
EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
A detailed exercise for evaluation of the performance of the Board, its various committees and also the performance of individual Directors was carried out by the Board. The performance of the Board and that of its committees was evaluated on the basis of various parameters like adequacy of Composition, Board Culture, Execution and performance of specific duties, obligations and governance etc. Whereas the evaluation of individual Directors and that of the Chairman of the Board was on the basis of various factors like their attendance, level of their engagement, their contribution, and independency of judgment, their contribution in safeguarding the interest of the Company and other relevant factors. The Board and committees put sufficient efforts to safeguard the interest of the Company. The information relating to its terms of reference, no. of meetings held and attendance etc during the year under report are provided in Corporate Governance Report. DISCLOSURE OF REMUNERATION RATIO
The particulars of ratio of remuneration of Director, KMP and employees, more particularly described under section 197(12) of the Companies Act,2013 and Rules 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in Annexure âBâ to this report.
PARTICULARS OF EMPLOYEES:
There are no Employees covered by Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
PARTICULARS OF LOANS AND INVESTMENTS
The Company being NBFC registered with Reserve Bank of India with principal business as Assets Finance Company, the provisions of Section 186 except sub section (1) of the Companies Act, 2013 are not applicable to it. Hence no particulars thereof as envisaged under Section 134(3)(g) of the Act are covered in this report.
RELATED PARTY TRANSACTIONS
The Company has no transaction with related parties referred to sub section (1) of Section 188 of the Companies Act, 2013. However other related party transactions not covered above are disclosed in note 22.8 of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS, AND OUTGO:
As the Company is in finance and loan segment, the Company has no activities relating to conservation of energy or technology absorption. The Company has had no foreign exchange earnings or out goes during the year under review.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and redressal) Act, 2013 and no complaint has been received on sexual harassment during the financial year 2017-18.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a âVigil Mechanism/Whistle Blower Policyâ. The Brief details of establishment of this policy are provided in the Corporate Governance Report.
GREEN INITIATIVE
In accordance with the âGreen Initiativeâ, the Company has been sending the Annual Report/Notice of AGM in electronic mode to those Shareholders whose Email ids are registered with the Company and / or the Depository Participants. Your Directors are thankful to the Shareholders for actively participating in the Green Initiative.
RISK MANAGEMENT POLICY
The Company was already having risk management system to identify, evaluate and minimize the business risks. The Company during the year had formalized the same by adopting Risk Management Policy. This policy intends to identify, evaluate monitor and minimize the identifiable risks in the organization.
ANNUAL RETURN
The extract of the Annual Return in Form MGT-9 is provided in Annexure âCâ to this report.
REMUNERATION POLICY
Remuneration to Managing Director
The remuneration paid to Managing Director is recommended by the Nomination and Remuneration Committee and approved by Board of Directors and shareholders of the Company. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.
Remuneration to Non Executive Directors:
No fees/remuneration are being paid to the Non-Executive Directors.
CODE OF CONDUCT
The Code of Conduct for all Board members and Senior Management of the Company have been laid down and are being complied with in words and spirit. The compliance on declaration of code of Conduct signed by Managing Director of the Company is included as a part of this Annual Report.
ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATERS OR COURTS OR TRIBUNALS
No orders were passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operation in future.
ACKNOWLEDGEMENT
The Directors would like to place on record their sincere appreciation to all the employees of their continued effort towards the growth of the Company and would also like to express their thanks to the Bankers, Shareholders and Customers for their support and contribution which enabled the Company to achieve its goals for the year.
FOR AND ON BEHALF OF THE BOARD
Place : NADIAD. HARSHAD DALAL
Dated : 29th May 2018 CHAIRMAN
DIN: 00080903
Mar 31, 2015
Dear Members,
The Directors hereby present their TWENTY SECOND Annual Report
together with the audited accounts of the company for the year ended
31st March 2015.
FINANCIAL RESULTS:
(Rs. in Lacs)
PARTICULARS YEAR ENDED YEAR ENDED
31/03/2015 31/03/2014
Revenue From Operations 1157.63 1110.97
Total Revenue 1160.30 1112.94
Profit Before Depreciation & Tax 565.94 560.03
Depreciation 14.77 9.93
Profit before Tax 551.17 550.10
Provision for tax
Current 180.45 175.00
Deferred (-1.92) 2.86
Provision of Income Tax of earlier period - (-0.29)
Profit After Tax 372.64 372.53
Balance of Profit brought forward 71.89 70.87
Profit available for Appropriation 444.53 443.40
APPROPRIATION
Proposed Dividend 48.30 48.30
Corporate tax on Dividend 8.21 8.21
Transferred to
Statutory reserve 75.00 75.00
General reserve 240.20 240.00
Balance Carried to Balance Sheet 72.82 71.89
DIVIDEND:
We are pleased to recommend dividend of 14% p.a (Rs. 1.40 per share)
on the Equity Share Capital of the Company for the financial year ended
March 31, 2015. The dividend, if approved by the members, will be paid
to members within the period stipulated by the Companies Act, 2013.
OPERATIONS:
Your Company has continued to grow steady but substantially due to the
concerted marketing efforts in new business centers, new product, and
prudent recovery system. Company has maintained steady growth in
operations and profit during fiscal 2014-15. Total revenue including
income from operations and other income increased to Rs. 1160.30 lacs in
the current year from Rs. 1112.94 lacs in previous year. Considering
inflation hike, total expenses increased from 562.84 lacs in previous
year to Rs. 609.13 lacs in current year. In spite of increase in bank
interest rate, the finance cost icreased marginally to Rs. 225.37 lacs
in the current year compared to Rs. 221.60 lacs in previous year.
Accordingly, the profit before tax increased from Rs. 550.10 lacs in the
previous year to Rs. 551.17 lacs in the current year. After providing
tax of Rs. 180.45 lacs in the current year (Rs. 175.00 lacs in previous
year) profit after tax remained 372.64 lacs against Rs. 372.53 lacs in
the previous year.
The disbursement in the current year remains increased to Rs. 4720.67
lacs compared to Rs. 4128.05 lacs in previous year. The Company's
strategy to focus for the business in smaller places and specialization
in two/ three wheeler segment has remained unchanged. Hypothecation /
loan stock of the Company has increased from Rs. 3771.45 lacs in
previous year to Rs. 4181.77 lacs in the current year.
The assets of the company are properly and adequately insured and
recoveries are at satisfactory level.
FUTURE OUTLOOK/ MANAGEMENT DISCUSSION AND ANALYSIS:
INDIAN ECONOMY
Growth of India's GDP (at constant 2011-12 prices) rose to 7.3% in
2014-15 from 6.9% in 2013-14, and was mildly lower than the Advance
Estimate of 7.4% released by the Central Statistics Office (CSO).
Moreover, the pace of GDP growth was volatile over the various quarters
of FY15 (6.7% in Q1FY15, 8.4% in Q2FY15, 6.6% in Q3FY15 and 7.5% in
Q4FY15). Ratings agency CRISIL has cut its GDP (gross domestic product)
growth forecast for 2015-16 by 50 basis points (bps) or 0.5% - to 7.4%
from 7.9% - due to the increasing likelihood of a weak monsoon.
The RBI has cut its policy rate by 75 bps since January, 2015 and there
could be a possibility of further rate cuts. If this happens, may
leads better growth in the company.
The Indian automobile industry is finally seeing an uptick in sales.
FY2014-15 numbers reveal all vehicle categories other than CVs are in
positive territory and passenger car sales have returned to the black
after three years. Riding on the back of a gradual uplift in market
sentiments, excise duty cuts continuing through to December 2014 and
the opening up of the mining and infrastructure sectors, the Indian
automotive industry posted an overall growth of 7.22 percent in fiscal
year April 2014-March 2015, marking an improved performance over the
previous fiscal. FY2013-14 had seen growth of 3.53 percent, mainly due
to a good performance by the two- wheeler sector.
In FY2014-15, passenger car and utility vehicle sales were up 4.99
percent and 5.30 percent respectively, pushing overall passenger
vehicle sales up 3.90 percent. Van numbers however dipped 10.19
percent. In FY2013- 14, PVs had declined 6.05 percent and all three
segments - cars, UVs and vans - had seen a downturn. The overall CV
sector's numbers are down in FY2014-15 mainly due to a below-par
performance by LCVs, which de- grew 11.57 percent and pulled down CV
sales by 2.83 percent year on year. In 2013-14, the CV segment fell
sharply by 20.23 percent with M&HCVs sliding 25.33 percent and LCVs by
17.62 percent. In 2014-15, M&HCVs have grown 16.02 percent due to
revival of construction and roadbuilding activities as well as mining
activities. The two-wheeler industry continues to do well. The overall
segment grew 8.09 percent, which notched 25.06 percent growth while
motorcycles grew marginally at 2.50 percent; mopeds grew 4.51 percent
in 2014-15. In comparison, in FY2013-14, two-wheelers saw 7.31 percent
growth with scooter sales up 23.24 percent, bikes at 3.91 percent and
mopeds down 8.35 percent.
Our mission is to be sound NBFC among regional players in terms of
product offerings, technology, service levels, risk management and audit
and compliance etc. The objective is to continue building sound customer
/ franchises across distinct businesses so as to be a preferred provider
of NBFC services for its target retail and customer segments, and to
achieve a healthy growth in profitability, consistent with the company's
risk appetite. The company's range of retail financial products and
excellent services and branches net work is fairly exhaustive to meet up
the coming challenges. The objective is continue to build sound
customer/dealer friendly atmosphere to achieve healthy growth in
profitability, consistent with company's risk appetite. The company also
emphasizes to develop innovative products and services that attract its
Customers, Increase its market share as NBFC and financial services
industry by following a disciplined growth strategy focusing on
balancing quality and volume growth while delivering high quality
customer service, maintain reasonably good standards for asset quality
through disciplined credit risk management; and continue to develop
products and services that reduce its cost of funds; and Focus on
healthy earnings growth with low volatility. Our company growth is more
important especially looking to the concentration in rural area for the
business. The company grew its retail assets portfolio in a well
balanced manner focusing on both returns as well as risk. Company
intends to follow conservative view in the coming years. Company also
expects continuous threats to small/medium Company like us, from
global/giant players in the retail finance market especially with large
size/volume, lower rate of interest and ability to sustain in the market
is inevitable for the company to sustain in the market.
Overall, in spite of various pros and corns your company has
demonstrated outstanding achievement in terms of earned valued and well
built market presence. Your company is cash rich, has better liquidity,
improved working capital and it has shown its readiness to accept
market challenges. All of these are signs of strong fundamentals which
the company has been able to establish with the help of batter and
professional management support.
RISK MANAGEMENT /SWOT ANALYSIS
Your company has comprehensive Risk Management System towards
identification and evaluation of all potential business risks.
Management has developed Risk Management Plan and reviews its
implementation regularly The company is exposed to external and
internal risk associated with its business. To counter these risks, the
company continues to broaden its product portfolio, increase customer
profile and geographic reach.
Taking on various types of risk is integral to the NBFC business. Sound
risk management and balancing risk- reward trade-offs are critical to a
company's success. Business and revenue growth have therefore to be
weighed in the context of the risks implicit in the company's business
strategy. Of the various types of risks your company is exposed to, the
most important are credit risk, market risk including liquidity risk
and price risk and operational risk. The identification, measurement,
monitoring and management of risks accordingly remain a key focus area
for the Company. For credit risk, appropriate distinct policies and
processes are in place for the retail businesses. Overall portfolio
diversification and reviews also facilitate mitigation and management.
Especially a small capital based company faces multiple problems due to
poor recovery systems. The specific NPA provisions that the company has
made continue to be more conservative than the regulatory requirements.
This will help the company to maintain high standards for assets
quality through disciplined credit risk management.
However, while the balance of risks in the last financial year were
largely external, rising domestic interest rates as well as firm
inflationary pressures have meant that domestic factors have now
emerged as points of concern for growth in the current fiscal year.
SWOT analysis Strengths
* The pioneer in the two wheeler vehicles financing sector in
Gujarat/Maharashtrs
* Oldest NBFC since last 20 years.
* Sound financial position since inception
* A well-defined and scalable organisation structure.
* Strong financial track record with low Non Performing Assets (NPAs)
* Experienced and stable management team
* Strong relationships with public, private as well as banks.
Fast Procidure
Weaknesses
The Company's business and its growth are directly linked to the GDP
growth
* Small organisation structure
* Availability of cheaper fund
* Competition with large NBFC's/Banks
Opportunities
* Growth in the Two/Three Wheeler market
* Strong demand for passenger second hand car/Trucks Threats
* Regulatory changes in the NBFC and ancillary sectors Rain fall and
competition
FINANCIAL PERFORMANCE
As on 31st March, 2015, against hypothecation of loan stock of Rs.
4181.77 lacs (previous year Rs. 3771.45), Rs. 3138.28 is falling due
within 12 months. Company has made provision for Non Performing
Hypothecation loan stocks for Rs. 5.33 lacs (previous year Rs. 6.25
lacs). The NPA of bad debts/hypo.loans written off is Rs. 21.47 lacs
(previous year Rs. 43.28 lacs) while provision for doubtful/
nonperforming assets is Rs. 0.04 lacs.
INTERNAL AUDIT AND COMPLIANCE:
The Company has Internal Audit and Compliance functions which are
responsible for independently evaluating the adequacy of all internal
controls and ensuring operating and business units adhere to internal
processes and procedures as well as to regulatory and legal
requirements. The audit function also recommends improvements in
operational processes and service quality. To mitigate operational
risks, the Company has put in place extensive internal controls
including restricted access to the company's computer systems,
appropriate segregation of front and back office operations and strong
audit trails. The Audit Committee of the Board also reviews the
performance of the audit and compliance functions and reviews the
effectiveness of controls and compliance with regulatory guidelines.
The Board has formed a new audit committee considering the requirement
under the Companies Act, 2013 and rules made thereunder. Along with
keeping in view the requirement under listing agreement.
RESOURCE MOBILATION/ICRA RATING
Cost of funds for retail-focused NBFCs, which remained high at 12%-14%,
is likely to remain stable during the year. As mentioned earlier,
company is in constant search to avail cheaper fund to reduce our cost
of funds. The cash credit limit of the company has been elevated from
Rs. 1008.17 lacs to Rs. 1218.79 lacs with the Banks.
The Company has discontinued accepting or renewing fresh deposits,
therefore there no outstanding fixed deposit as on date. Inter
Corporate Deposit almost remain constant from 881.61 lacs in the
previous year to Rs. 884.54 lacs in current year.
The company has obtained ICRA rating for Rs. 1500 lacs Cash Credit
Limits from Bank. ICRA has assigned BB (Stable) ratings for the same.
CAPITAL ADEQUACY:
Your company's Capital Adequacy Ratio (CAR) stood at 55.93%, well above
the regulatory minimum of 15%. The revised Guidelines issued by R.B.I
for recognition of Income, asset classification, Investment accounting,
provision for non-performing assets and capital adequacy have been
followed by your company. The company has also made the provision for
non performing assets in case of Sub-standard, doubtful and loss assets
as per R.B.I. guidelines.
FIXED DEPOSITS:
As reported earlier, the Company has discontinued to accept or renewed
fresh/existing fixed deposits. At the close of the year, no amount
remained unclaimed or unpaid. The company does not have any claimed but
unpaid deposits.
DIRECTORATE:
Mr.Deepak Patel and Mr.Shailesh Patel are liable to retire by rotation
at the ensuing Annual General Meeting and being eligible offer
themselves for reappointment. During the year under review,
Mr.Bhikhubhai Patel has resigned as a director and Mrs. Mrudulaben Patel
is appointed as an additional director. None of the directors of the
companyis disqualified from being appointed or re-appointed as a
Director as specified under Section 164 of the Companies Act, 2013. As
required under Clause 49 of the Listing Agreement, the information on
the particulars of the Directors proposed for appointment has been given
in the Notice of the Annual General Meeting.
The Board of Directors of the Company hereby confirms that all the
Independent directors duly appointed by the Company have given the
declaration and they meet the criteria of independence as provided
under section 149(6) of the Companies Act, 2013.
CORPORATE GOVERNANCE:
As per clause 49 of the listing agreement with stock exchanges, your
company was required to implement the code of corporate Governance.
Accordingly, your company has complied in all material respects with
the features of the said code. A report on the same is given
separately.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of clause (c) of sub-section (3) of
Section 134 of the Companies Act, 2013, which states thatÂ
(a) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit of
the company for that period;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the Annual Accounts on a going concern
basis;
(e) the Directors, in the case of a listed company, have laid down
Internal Financial Controls to be followed by the Company and that such
Internal Financial Controls are adequate and were operating
effectively; and
(f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
LISTING AGREEMENT WITH STOCK EXCHANGES:
Pursuant to the provisions of listing agreement with stock exchanges,
the equity shares of the company are listed at Ahmedabad (regional) and
Mumbai stock exchanges.
DEPOSITORY SYSTEM:
Your company has established electronic connectivity with National
Securities Depository Ltd. (NSDL) and Central Depository Services
(India) Ltd. In view of the compulsory dematerialization of company's
equity shares on stock exchanges, members are requested to
dematerialize the shares on either of the depositories as aforesaid.
AUDITORS:
Kantilal Patel & Co. Chartered Accountants, auditors of the company,
hold office until the conclusion of the ensuing Annual General Meeting
of the company and being eligible, offer themselves for reappointment.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act,2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the company has appointed M/S Tushar Vora & Associates,
proprietor, company secretaries in practice to undertake the
secretarial audit of the company. The secretarial aidit report is
annexed herewith as Annexure 'A'.
CORPORATE SOCIAL RESPONSIBILITY
Since the net profit for the year ended 31st March, 2015 is less than 5
crores, the relevant provision of the Act is not applicable.
NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors at its meeting held on 24th May 2014 constituted
a Nomination and remuneration Committee comprising of Mr.Bharat Amin as
Chairman, Mr.Kiritkumar Dalal, Mr. Bhikhubhai Patel, Mr. Sunil G. Patel
and Mr. Deepak Patel as other members. The role and responsibilities,
Company's policy on directors' appointment and remuneration including
criteria for determining qualifications, positive attributes,
independence of a director and other related matters are in conformity
with the requirements of the Companies Act, 2013 and the listing
agreement. As on 31st March, 2015, Mrs. Mrudulaben Patel was replaced
as a member in place of Mr.Bhikhubhai Patel.
AUDIT COMMITTEE
The Board of Directors at its meeting held on 24th May 2014
re-constituted a Audit Committee comprising of Mr.Bharat Amin as
Chairman, Mr.Kiritkumar Dalal, Mr.Bhikhubhai Patel, Mr. Sunil G. Patel
and Mr. Deepak Patel as other members. The scope of Audit committee is
enhanced in accordance with the Companies Act, 2013 and the listing
agreement. As on 31st March, 2015, Mrs. Mrudulaben Patel was replaced
as a member in place of Mr.Bhikhubhai Patel.
STAKEHOLDERS RELATIONSHIP/SHARE TRANSFER COMMITTEE
The Board of Directors at its meeting held on 24th May 2014
re-constituted a Stakeholders Relationship/Share Transfer committee of
Mr.Bharat Amin as Chairman, Mr.Kiritkumar Dalal, Mr.Bhikhubhai Patel,
Mr. Sunil G. Patel and Mr. Deepak Patel as other members, in accordance
with the Companies Act,2013 and the listing agreement. As on 31st
March, 2015, Mrs. Mrudulaben Patel was replaced as a member in place of
Mr.Bhikhubhai Patel.
EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
A detailed exercise for evaluation of the performance of the Board, its
various committees and also the performance of individual Directors was
carried out by the Board. The performance of the Board and that of its
committees was evaluated on the basis of various parameters like
adequacy of Composition, Board Culture, Execution and performance of
specific duties, obligations and governance etc. Whereas the evaluation
of individual directors and that of the Chairman of the Board was on
the basis of various factors like their attendance, level of their
engagement, their contribution, and independency of judgment, their
contribution in safeguarding the interest of the company and other
relevant factors. The Board and committees put sufficient efforts to
safeguard the interest of the company. The information relating to its
terms of reference, no. of meetings held and attendance etc during the
year under report are provided in Corporate Governance Report.
During the year under report, the Board of Directors has adopted the
familiarization program for independent directors of the company.
During the year under report, the company has appointed Key Managerial
Personnel to inter alia shoulder the responsibilities in their
respective fields as envisaged under the provisions of the Companies
Act, 2013.
DISCLOSURE OF REMUNERATION RATIO
The particulars of ratio of remuneration of Director,KMP and employees,
more particularly described under section 197(12) of the Companies
Act,2013 and Rules 5 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 are given in Annexure B to this
report.
PARTICULARS OF LOANS AND INVESTMENTS
The company being NBFC registered with Reserve Bank of India with
principal business as loan company, the provisions of Section 186
except sub section (1) of the Companies Act,2013 are not applicable to
it. Hence no particulars thereof as envisaged under Section 134(3)(g)
of the Act are covered in this report.
RELATED PARTY TRANSECTIONS
The company has no transection with related parties referred to sub
section (1) of Section 188 of the Companies Act, 2013. However other
related party transections not covered above are disclosed in note 22.8
of this report
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
As the main business of the company is of finance, the company has no
activities relating to conservation of energy or technology absorption.
The company has had no foreign exchange earnings or out goes during the
year under review.
SEXUAL HARRASSMENT
Entire staff in the company is working in a most congenial manner and
there are no occurrence of any incidents of sexual harassment during
the year.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Board during the year under report approved and adopted "Vigil
Mechanism/Whistle Blower Policy" in the company. The Brief details of
establishment of this policy are provided in the Corporate Governance
Report.
RISK MANAGEMENT POLICY
The company was already having risk management system to identify,
evaluate and minimize the business risks. The company during the year
had formmalised the same by adopting Risk Management Policy. This
policy intends to identify, evaluate monitor and minimize the
identifiable risks in the organization.
ANNUAL RETURN
The extract of the Annual Return in Form MTG 9 is provided in Annexure
D to this report.
PARTICULARS OF EMPLOYEES:
There are no Employees covered by Section 197 of the Companies Act,
2013 read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
ACKNOWLEDGEMENT:
The Directors would like to place on record their sincere appreciation
to all the employees of their continued effort towards the growth of
the company and would also like to express their thanks to the Bankers,
Shareholders and Customers for their support and contribution which
enabled the company to achieve its goals for the year.
FOR AND ON BEHALF OF THE BOARD
Place : NADIAD Harshad Dalal
Dated : 9th May 2015 CHAIRMAN
Mar 31, 2014
Dear Members,
The Directors hereby present their TWENTYFIRST Annual Report together
with the audited accounts of the company for the year ended 31st March
2014.
FINANCIAL RESULTS:
(Rs. in Lacs)
PARTICULARS YEAR ENDED YEAR ENDED
31/03/2014 31/03/2013
Revenue From Operations 1110.97 1049.40
Total Revenue 1112.94 1055.63
Profit Before Depreciation & Tax 560.03 555.47
Depreciation 9.93 9.32
Profit before Tax 550.10 546.15
Provision for tax
Current 175.00 177.00
Deferred 2.86 (0.01)
Provision of Income Tax of earlier period (0.29) (7.46)
Profit After Tax 372.53 376.62
Balance of Profit brought forward 70.87 76.26
Profit available for Appropriation 443.40 452.88
APPROPRIATION
Proposed Dividend 48.30 48.30
Corporate tax on Dividend 8.21 8.21
Transferred to
Statutory reserve 75.00 75.50
General reserve 240.00 250.00
Balance Carried to Balance Sheet 71.89 70.87
DIVIDEND:
We are pleased to recommend dividend of 14% p.a (Rs.1.40 per share) on
the Equity Share Capital of the Company for the financial year ended
March 31, 2013. The dividend, if approved by the members, will be paid
to members within the period stipulated by the Companies Act, 2013.
OPERATIONS:
Your Company has continued to grow steady but substantially due to the
concerted marketing efforts in new business centers, new product, and
prudent recovery system. Company has maintained steady growth in
operations and profit during fiscal 2013-14. Total revenue including
income from operations and other income increased to Rs.1112.94 lacs in
the current year from Rs.1055.63 lacs in previous year. Considering
inflation hike, total expenses marginally increased from 509.48 lacs in
previous year to Rs.562.84 lacs in current year. In spite of increase
in bank interest rate, the bank charges have been reduced to Rs.221.60
lacs in the current year compared to Rs.224.05 lacs in previous year.
Accordingly, the profit before tax increased from Rs.546.15 lacs in the
previous year to Rs.550.10 lacs in the current year 2013-14,
registering marginal growth. After providing tax of Rs.175.00 lacs in
the current year (Rs.177.00 lacs in previous year) profit after tax
remained 372.53 lacs
against Rs.376.62 lacs in the previous year, registering marginal
decline, mainly due bad debts/Hypothecation Loan written off.
The disbursement in the current year remains increased to Rs.4128.05
lacs compared to Rs.3744 lacs in previous year. The Company''s strategy
to focus for the business in smaller places and specialization in
two/three wheeler segment has remained unchanged. Hypothecation / loan
stock of the Company has increased from Rs.3549.77 lacs in previous
year to Rs.3771.45 lacs in the current year.
The assets of the company are properly and adequately insured and
recoveries are at satisfactory level.
FUTURE OUTLOOK/ MANAGEMENT DISCUSSION AND ANALYSIS:
According to the advance estimates of national income for the year
2013-14 the growth of Gross Domestic Product (GDP) during 2013-14 is
estimated at 4.9% as compared to growth rate of 4.5% in the year
2012-13 (previous year). The Agriculture sector comprising
''agriculture, forestry and fishing'' sectors is likely to show a growth
of 4.6% during 2013-14 as against the previous year''s growth rate of
1.4 . In Industry sector de-growth of 0.2% is estimated in the
''manufacturing'' sector as compared to the growth of 1.1% in the
previous year. The sector ''financing, insurance, real estate and
business services'' is expected to show a growth rate of 11.2% as
compared to growth rate of 10.9% in the previous year.
The early part of the Financial Year 2013-14 witnessed some volatility
in the emerging markets in response to the Federal Reserve"s tapering,
but the global economic scenario has since remained stable. While the
recovery in advanced economies notably the US, has gathered steam,
economic activity in most emerging market economies has remained below
par.
INDIAN ECONOMY
For the first time in 25 years, the Indian economy witnessed its second
successive year of below 5% growth, driven predominantly by a decline
in financial savings, low business confidence and sluggish investment
demand over successive quarters, resulting in a sharp deceleration in
industrial growth. Rarely has India seen a slowdown of such length and
depth, and the recovery is likely to be a slow and long process.
India"s exports, buoyed by a weakened rupee, witnessed a revival of
Agricultural GDP grew by 4.9% during April - December 2013 and with
good winter rainfall and healthy reservoir storage, food grain
production is estimated to be a record 263.2 million tonnes in 2013-14.
Unseasonal rainfall in March is said to have caused some damage to
crops in parts of Central and South India but the overall impact is
unlikely to be significant. This is very important in the context of
the company business as its majority business is in rural area and
recovery is heavily dependent on this factor.
High interest rates, stubborn retail inflation and lack of policy
direction, combined with uncomfortably high fiscal and current account
deficits (CAD), left the Government with very few options. Faced with
compulsions to rein in the fiscal deficit, government put the brakes on
Plan expenditure, as a result of which investment and consumption
growth declined to their lowest levels in 11 years.
Faced with sticky retail inflation, RBI was compelled to increase the
repo rate by 75 bps during the year. However, with retail inflation, as
measured by the CPI, dropping from 9.1% in December 2013 to 6.7% in
February 2014, RBI held the policy rates steady in April 2014. Though
both the fiscal deficit and CAD have narrowed, many believe that the
reduction in the fiscal deficit is merely an accounting adjustment,
which will catch up in the current financial year. The Balance of
Payments situation however, appears to be comfortable.
The year 2013-14 witnessed continued slowdown in the automobile segment
with the overall automobile segment witnessing growth of a mere 3.53%.
Commercial Vehicles segment declined by 20.23% over the previous year,
Passenger Vehicles declined by 6.05%, Three-wheelers by 10.90% and only
Two-wheelers grew by 7.31% . In 2013-14, the domestic two-wheeler (2W)
industry had recorded sales volumes of 14.8 million units, a growth of
7.3% over the previous year.
Our mission is to be sound NBFC among regional players in terms of
product offerings, technology, service levels, risk management and
audit and compliance etc. The objective is to continue building sound
customer / franchises across distinct businesses so as to be a
preferred provider of NBFC services for its target retail and customer
segments, and to achieve a healthy growth in profitability, consistent
with the company''s risk appetite.
The company''s range of retail financial products and excellent services
and branches net work is fairly exhaustive to meet up the coming
challenges. The objective is continue to build sound customer/dealer
friendly atmosphere to achieve healthy growth in profitability,
consistent with company''s risk appetite. The company also emphasizes to
develop innovative products and services that attract its Customers,
Increase its market share as NBFC and financial services industry by
following a disciplined growth strategy focusing on balancing quality
and volume growth while delivering high quality customer service,
maintain reasonably good standards for asset quality through
disciplined credit risk management; and continue to develop products
and services that reduce its cost of funds; and Focus on healthy
earnings growth with low volatility. Our company growth is more
important especially looking to the concentration in rural area for the
business. The company grew its retail assets portfolio in a well
balanced manner focusing on both returns as well as risk. Company
intends to follow conservative view in the coming years. Company also
expects continuous threats to small/medium Company like us, from
global/giant players in the retail finance market especially with large
size/volume, lower rate of interest and ability to sustain in the
market is inevitable for the company to sustain in the market.
Overall, in spite of various pros and corns your company has
demonstrated outstanding achievement in terms of earned valued and well
built market presence. Your company is cash rich, has better liquidity
improved working capital and it has shown its readiness to accept
market challenges. All of these are signs of strong fundamentals which
the company has been able to establish with the help of batter and
professional management support.
RISK MANAGEMENT /SWOT ANALYSIS
Your company has comprehensive Risk Management System towards
identification and evaluation of all potential business risks.
Management has developed Risk Management Plan and reviews its
implementation regularly. The company is exposed to external and
internal risk associated with its business. To counter these risks, the
company continues to broaden its product portfolio, increase customer
profile and geographic reach.
Taking on various types of risk is integral to the NBFC business. Sound
risk management and balancing risk- reward trade-offs are critical to a
company''s success. Business and revenue growth have therefore to be
weighed in the context of the risks implicit in the company''s business
strategy. Of the various types of risks your company is exposed to, the
most important are credit risk, market risk including liquidity risk
and price risk and operational risk. The identification, measurement,
monitoring and management of risks accordingly remain a key focus area
for the Company. For credit risk, appropriate distinct policies and
processes are in place for the retail businesses. Overall portfolio
diversification and reviews also facilitate mitigation and management.
Especially a small capital based company faces multiple problems due to
poor recovery systems. The specific NPA provisions that the company has
made continue to be more conservative than the regulatory requirements.
This will help the company to maintain high standards for assets
quality through disciplined credit risk management.
However, while the balance of risks in the last financial year were
largely external, rising domestic interest rates as well as firm
inflationary pressures have meant that domestic factors have now
emerged as points of concern for growth in the current fiscal year.
SWOT analysis Strengths
* The pioneer in the two wheeler vehicles financing sector in
Gujarat/Maharashtrs
* Oldest NBFC since last 20 years.
* Sound financial position since inception
* A well-defined and scalable organisation structure.
* Strong financial track record with low Non Performing Assets (NPAs)
* Experienced and stable management team
* Strong relationships with public, private as well as banks.
Weaknesses
* The Company''s business and its growth are directly linked to the GDP
growth
* Small organisation structure
* Availability of cheaper fund
Opportunities
* Growth in the Two/Three Wheeler market
* Strong demand for passenger second hand car/Trucks Threats
* Regulatory changes in the NBFC and ancillary sectors Financial
performance
As on 31st March, 2014, against hypothecation of loan stock of
Rs.3771.45 lacs (previous year Rs.3549.77), Rs.2843.15 is falling due
within 12 months. Company has made provision for Non Performing
Hypothecation loan stocks for Rs.6.25 lacs (previous year Rs.4.95
lacs). Against the sundry debtors of Rs.400.84 lacs (previous year
400.62 lacs) (over six months Rs.119.19 lacs (previous year Rs.
121.38)), company has provided Rs.42.69 lacs (previous year Rs.51.67)
for Non Performing Trade receivables. The NPA of bad debts/hypo.loans
written off is Rs.43.28 lacs while provision for doubtful/
nonperforming assets is Rs.(7.68) lacs.
INTERNAL AUDIT AND COMPLIANCE:
The Company has Internal Audit and Compliance functions which are
responsible for independently evaluating the adequacy of all internal
controls and ensuring operating and business units adhere to internal
processes and procedures as well as to regulatory and legal
requirements. The audit function also recommends improvements in
operational processes and service quality. To mitigate operational
risks, the Company has put in place extensive internal controls
including restricted access to the company''s computer systems,
appropriate segregation of front and back office operations and strong
audit trails. The Audit Committee of the Board also reviews the
performance of the audit and compliance functions and reviews the
effectiveness of controls and compliance with regulatory guidelines.
The Board has formed a new audit committee considering the requirement
under the Companies Act, 2013 and rules made thereunder, along with
keeping in view the requirement under listing agreement.
RESOURCE MOBILATION:
As mentioned earlier, company is in constant search to avail cheaper
fund to reduce our cost of funds. The cash credit limit of the company
has been elevated from Rs.975 lacs to Rs.1500 lacs with the Banks.
The Company has discontinued accepting or renewing fresh deposits,
therefore there no outstanding fixed deposit as on date. Inter
Corporate Deposit almost remain constant from 877.25 lacs in the
previous year to Rs.881.61 lacs in current year. However utilization
banks limits marginally decreased from Rs.1125.66 lacs to Rs.1008.17
lacs in current year.
CAPITAL ADEQUACY:
Your company''s Capital Adequacy Ratio (CAR) stood at 53.99%, well above
the regulatory minimum of 15%. The revised Guidelines issued by R.B.I
for recognition of Income, asset classification, Investment accounting,
provision for non-performing assets and capital adequacy have been
followed by your company. The company has also made the provision for
non performing assets in case of Sub-standard, doubtful and loss assets
as per R.B.I. guidelines.
FIXED DEPOSITS:
As reported earlier, the Company has discontinued to accept or renewed
fresh/existing fixed deposits. At the close of the year, no amount
remained unclaimed. The company does not have any claimed but unpaid
deposits.
DIRECTORATE:
Mr.Harshad Dalal and Mr.Kiran Patel are liable to retire by rotation at
the ensuing Annual General Meeting and being eligible offer themselves
for reappointment. In view of change in the terms of appointment of
Independent Director under the Companies Act, 2013, Mr. Kirit Dalal,
Mr. Bharat Amin, Mr. Bhikhubhai Patel and Mr. Sunilkumar Patel,
Independent Directors of the company shall retire and being eligible be
reappointed under new terms.
It is also proposed to revise the remuneration of Mr. Deepak Patel,
Managing Director as set out in the notice. None of the directors of
the company is disqualified under section 164 of the Companies act,
2013.
CORPORATE GOVERNANCE:
As per clause 49 of the listing agreement with stock exchanges, your
company was required to implement the code of corporate Governance.
Accordingly, your company has complied in all material respects with
the features of the said code. A report on the same is given separately
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217 (2AA) of the Companies Act,
1956 the Directors hereby confirm that:-
(i) in the Preparation of the Annual Accounts for the Financial Year
ended 31st March, 2014, the applicable Accounting Standards had been
followed along with proper explanation relating to material departures;
(ii) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the Profit of
the company for the year under review;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the Annual Accounts for the financial
year ended 31st March 2014 on a ''going concern'' basis.
LISTING AGREEMENT WITH STOCK EXCHANGES:
Pursuant to the provisions of listing agreement with stock exchanges,
the equity shares of the company are listed at Ahmedabad (regional) and
Mumbai stock exchanges.
DEPOSITORY SYSTEM:
Your company has established electronic connectivity with National
Securities Depository Ltd. (NSDL) and Central Depository Services
(India) Ltd. In view of the compulsory dematerialization of company''s
equity shares on stock exchanges, members are requested to
dematerialize the shares on either of the depositories as aforesaid.
AUDITORS:
Kantilal Patel & Co. Chartered Accountants, auditors of the company,
hold office until the conclusion of the ensuing Annual General Meeting
of the company and being eligible, offer themselves for reappointment.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO :
As the main business of the company is of finance, the company has no
activities relating to conservation of energy or technology absorption.
The company has had no foreign exchange earnings or out goes during the
year under review.
PARTICULARS OF EMPLOYEES:
There are no Employees covered by section 217 (2A) of the Companies
Act, 1956 read with Companies (Particular of Employees) Rules, 1975 as
amended.
ACKNOWLEDGEMENT:
The Directors would like to place on record their sincere appreciation
to all the employees of their Continued effort towards the growth of
the company and would also like to express their thanks to the Bankers,
Shareholders and Fixed Depositors for their support and contribution
which enabled the company to achieve its goals for the year.
FOR AND ON BEHALF OF THE BOARD
Harshad Dalal
CHAIRMAN
Place : NADIAD.
Dated : 24th May 2014
Mar 31, 2012
To THE MEMBERS OF CEEJAY FINANCE LIMITED
The Directors hereby present their NINETHEENTH Annual Report together
with the audited accounts of the company for the year ended 31st March
2012.
FINANCIAL RESULTS:
(Rs. in Lacs)
PARTICULARS YEAR ENDED YEAR ENDED
31/03/2012 31/03/2011
Revenue From Operations 921.47 715.12
Total Revenue 962.54 720.16
Profit Before Depreciation & Tax 444.77 285.98
Depreciation 8.51 7.99
Profit before Tax 436.26 277.99
Provision for tax
Current 130.50 95.00
Deferred 11.67 -
Provision of Income Tax of earlier period 7.29 (5.92)
Profit After Tax 286.80 188.91
Balance of Profit brought forward 56.98 53.67
Profit available for Appropriation 343.78 242.58
APPROPRIATION
Proposed Dividend 41.40 41.40
Corporate tax on Dividend 6.72 6.72
Transferred to
Statutory reserve 57.40 37.84
General reserve 162.00 99.64
Balance Carried to Balance Sheet 76.26 56.98
DIVIDEND:
Your company has had a consistent dividend policy that balances the
dual objectives of appropriately rewarding shareholders through
dividends and retaining capital, in order to maintain a healthy capital
adequacy ratio to support future growth. Your Directors have recommend
a dividend of 12% p.a. (i.e.Rs.1.20 per share) on the Equity Share
Capital of the Company for the financial year ended March 31, 2012 that
is same rate declared for the previous financial year.
OPERATIONS:
Despite a challenging market environment, management focus towards
improving competitiveness has helped the company to achieve robust
growth and profitability. The financial performance during the fiscal
year 2011- 12 remained healthy and encouraging. Total revenue including
income from operations and other income increased to Rs.962.54 lacs in
the current year from Rs.720.16 lacs in previous year. Due to inflation
hike Personnel expenses increased from 80.81 lacs in the previous year
to Rs.90.48 lacs in the current year. Due to increase in bank interest,
the bank charges have been increased to Rs.249.43 lacs in the current
year compared to Rs.195.45 lacs in previous year. Accordingly the
profit before tax increased by 57.20% from Rs.277.99 lacs in the
previous year to Rs.436.26 lacs in the current year 2011-12.This mainly
due to concentration of the company toward its recovery systems, which
helped the company to curb NPA and recovery of earlier debts, at
considerable level. Company, After providing tax of Rs.130.50 lacs in
the current year (Rs.95.00 lacs in previous year) profit after tax
remained 286.80 lacs against Rs.188.91 lacs in the previous year,
registering growth of 51.82%.
The disbursement in the current year also remained higher at Rs 3830
lacs compared to Rs.3090 lacs in previous year. The Company's
strategy to focus for the business in smaller places and specialization
in two/ three wheeler segment has remained unchanged. Hypothecation /
loan stock of the Company has increased from Rs.2818.80 lacs in
previous year to Rs.3450.24 lacs in the current year.
The assets of the company are properly and adequately insured and
recoveries are at satisfactory level.
FUTURE OUTLOOK/ MANAGEMENT DISCUSSION AND ANALYSIS:
Global economy continues to face strong headwinds with growth projected
to drop from 3.8% in 2011 to 3.3% in 2012. The Indian economy continues
to face strong challenges in the forms of rising fiscal deficit,
increase in oil import bill, declining rupee and infrastructural
bottleneck. The Indian Index of Industrial production grew only by 2.8%
during 2011-12 as compared to 8.2% in 2010-11. Fiscal deficit remains
at a high level of 5.6% with debt to GDP ratio of 74%. Also, oil import
bill increase by 47% in 2012 compared to 2011. Taking into account all
these factors along with other leading indicators including government
spending, foreign investment, inflation and export growth, NCAER has
projected an average growth of GDP at 6.7 per cent during the tenth
five-year plan.
Despite tough economic conditions, the Indian economy has shown strong
resilience registering GDP growth of 6.5% in 2012. Indian's GDP is
expected to grow between 6.3% to 7.5% in 2012-13. A cyclical upturn in
investment, stronger external demand and the effects of recent monetary
easing will boost growth, although high inflation and falling value
rupee would dampen the investment climate.
The economic backdrop continued to be an important factor impacting the
performance of companies across sectors including organized retail.
Consumer sentiment and business confidence registered significant
improvement in the first three quarters of the financial year 2010-11,
and a host of sectors including auto, IT services and NBFC's
witnessed strong off take. However, in the period thereafter economic
growth has decelerated and both business and consumer sentiment has
been increasingly muted. Inflation continues to be an important concern
area. Elevated inflation and inflation expectations has meant that the
Reserve Bank of India has been compelled to maintain the benchmark
interest rates at a much higher level than expected earlier.
Despite high inflation, disaffection with political situation and
daunting infrastructure bottlenecks, the Indian consumers remain
inspirational and confident about their income and employment outlook
keeping the Indian consumption story intact.
So far as automotive industry is concern, its reported higher growth
for the second successive year, despite high interest rates and rising
prices due to increase in the input costs. The Indian two-wheeler (2W)
industry recorded sales volumes of 13.4 million units in 2011-12, a
growth of 14.0% over the previous year. In a year wherein growth in
other automobile segments particularly, passenger vehicle (PV) and
medium & heavy commercial vehicle (M&HCV), slowed down to single digits
- marred by demand slowdown due to northward movement of inflation,
fuel prices and interest rates - the 14% growth recorded by the 2W
industry remained steady. However, the momentum in the 2W industry's
volume growth too has been losing steam lately as evident from the
relatively lower volume growth of 11.0% recorded in H2, 2011-12 (YoY)
against a growth of 17.1% recorded in H1, 2011-12 (YoY). The
deceleration in growth is largely attributable to the motorcycles
segment which grew at a much lower rate of 7.8% (YoY) in H2, 2011-12
vis-a-vis 16.4% in H1, 2011-12; even as the scooters segment continued
to post 20% (YoY) expansion during both halves of the last fiscal.
With this, the share of the scooters segment in the domestic 2W
industry volumes increased to 19.1% in 2011-12 from 17.6% in 2010-11.
Very recently, IMF has portrayed a sustained global recovery in World
Economic Outlook. A significant shift has also been observed in Indian
households from the lower income group to the middle income group in
recent years. The finance companies are also more aggressive in their
marketing compared to previous years. Combining all these factors, one
may visualise a higher growth rate in two-wheeler demand particularly
for the motorcycle segment. This has helped the company to post a
considerable growth in volume and profit, in spite of higher rate of
interest and inflation prevailing in the country.
Our mission is to be sound NBFC among regional players in terms of
product offerings, technology, service levels, risk management and
audit and compliance etc. The objective is to continue building sound
customer /franchises across distinct businesses so as to be a preferred
provider of NBFC services for its target retail and customer segments,
and to achieve a healthy growth in profitability, consistent with the
company's risk appetite. The company's range of retail financial
products and excellent services and branches net work is fairly
exhaustive to meet up the coming challenges. The objective is continue
to build sound customer/dealer friendly atmosphere to achieve healthy
growth in profitability, consistent with company's risk appetite. The
company also emphasizes to develop innovative products and services
that attract its Customers, Increase its market share as NBFC and
financial services industry by following a disciplined growth strategy
focusing on balancing quality and volume growth while delivering high
quality customer service, maintain reasonably good standards for asset
quality through disciplined credit risk management; and continue to
develop products and services that reduce its cost of funds; and Focus
on healthy earnings growth with low volatility. Our company growth is
more important especially looking to the concentration in rural area
for the business. The company grew its retail assets portfolio in a
well balanced manner focusing on both returns as well as risk. Company
intends to follow conservative view in the coming years. Company also
expects continuous threats to small/ medium Company like us, from
global/giant players in the retail finance market especially with large
size/ volume, lower rate of interest and ability to sustain in the
market is inevitable for the company to sustain in the market.
Overall, in spite of various pros and corns your company has
demonstrated outstanding achievement in terms of earned valued and well
built market presence. Your company is cash rich, has better liquidity,
improved working capital and it has shown its readiness to accept
market challenges. All of these are signs of strong fundamentals which
the company has been able to establish with the help of batter and
professional management support.
RISK MANAGEMENT AND PORTFOLIO QUALITY:
Your company has comprehensive Risk Management System towards
identification and evaluation of all potential business risks.
Management has developed Risk Management Plan and reviews its
implementation regularly. The company is exposed to external and
internal risk associated with its business. To counter these risks, the
company continues to broaden its product portfolio, increase customer
profile and geographic reach.
Taking on various types of risk is integral to the NBFC business. Sound
risk management and balancing risk- reward trade-offs are critical to a
company's success. Business and revenue growth have therefore to be
weighed in the context of the risks implicit in the company's
business strategy. Of the various types of risks your company is
exposed to, the most important are credit risk, market risk including
liquidity risk and price risk and operational risk. The identification,
measurement, monitoring and management of risks accordingly remain a
key focus area for the Company. For credit risk, appropriate distinct
policies and processes are in place for the retail businesses. Overall
portfolio diversification and reviews also facilitate mitigation and
management. Especially a small capital based company faces multiple
problems due to poor recovery systems. The specific NPA provisions that
the company has made continue to be more conservative than the
regulatory requirements. This will help the company to maintain high
standards for assets quality through disciplined credit risk
management.
However, while the balance of risks in the last financial year were
largely external, rising domestic interest rates as well as firm
inflationary pressures have meant that domestic factors have now
emerged as points of concern for growth in the current fiscal year.
While the possibility of negative impact due to one or more such risks
can't be totally ruled out, the company proactively takes conscious
and reasonable steps, making efforts to mitigate the significant risks
that may affect it.
As on 31st March, 2012, against hypothecation of loan stock of
Rs.3450.24 lacs (previous year Rs.2818.80) company has made provision
for Non Performing Hypothecation loan stocks for Rs.3.60 lacs (previous
year Rs.3.58 lacs) Against the sundry debtors of Rs.358.88 lacs
(previous year 445.88 lacs) (over six months Rs.153.55 lacs (previous
year Rs. 225.13)), company has provided Rs.50.99 lacs (previous year
Rs.90.09) for Non Performing debtors. The NPA during the year is
positive of Rs. 15.79 lacs reflecting recovery of previous year NPA.
INTERNAL AUDIT AND COMPLIANCE:
The Company has Internal Audit and Compliance functions which are
responsible for independently evaluating the adequacy of all internal
controls and ensuring operating and business units adhere to internal
processes and procedures as well as to regulatory and legal
requirements. The audit function also recommends improvements in
operational processes and service quality. To mitigate operational
risks, the Company has put in place extensive internal controls
including restricted access to the company's computer systems,
appropriate segregation of front and back office operations and strong
audit trails. The Audit Committee of the Board also reviews the
performance of the audit and compliance functions and reviews the
effectiveness of controls and compliance with regulatory guidelines.
RESOURCE MOBILATION:
As mentioned earlier, company is in constant search to avail cheaper
fund to reduce our cost of funds. However there is no change in overall
cash credit limits of Rs.975 lacs with the Banks.
The Company has discontinued accepting or renewing fresh deposits,
therefore the fixed deposit of the company reduced to Rs.208.97 lacs in
current year from 423.40 lacs in previous year. Inter Corporat Deposit
almost remain constant from 843.50 lacs in the previous year to
Rs.873.75 lacs in current year. However utilization banks limits
increased from Rs.769.85 lacs to Rs.1045.85 lacs in current year.
CAPITAL ADEQUACY:
Your company's Capital Adequacy Ratio (CAR) stood at 44.25%, well
above the regulatory minimum of 15%. The revised Guidelines issued by
R.B.I for recognition of Income, asset classification, Investment
accounting, provision for non-performing assets and capital adequacy
have been followed by your company. The company has also made the
provision for non performing assets in case of Sub-standard, doubtful
and loss assets as per R.B.I. guidelines.
FIXED DEPOSITS:
As reported earlier, the Company has discontinued to accept or renewed
fresh/existing fixed deposits. The outstanding deposit remains Rs. of
Rs 208.97 lacs as on 31st March, 2012. At the close of the year,
deposits amounting to Rs. 0.23 lacs remained unclaimed, however there
is no amount outstanding as on report date. The company does not have
any claimed but unpaid deposits.
DIRECTORATE:
Mr.Harshad Dalal, Mr.Kiran Patel and Mr.Bhikhubhai are liable to retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for reappointment.
CORPORATE GOVERNANCE:
As per clause 49 of the listing agreement with stock exchanges, your
company was required to implement the code of corporate Governance.
Accordingly, your company has complied in all material respects with
the features of the said code. A report on the same is given
separately.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217 (2AA) of the Companies Act,
1956 the Directors hereby confirm that:-
(i) in the Preparation of the Annual Accounts for the Financial Year
ended 31st March, 2012, the applicable Accounting Standards had been
followed along with proper explanation relating to material departures;
(ii) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the Profit of
the company for the year under review;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the Annual Accounts for the financial
year ended 31st March 2012 on a 'going concern' basis.
LISTING AGREEMENT WITH STOCK EXCHANGES:
Pursuant to the provisions of listing agreement with stock exchanges,
the equity shares of the company are listed at Ahmedabad (regional) and
Mumbai stock exchanges.
DEPOSITORY SYSTEM:
Your company has established electronic connectivity with National
Securities Depository Ltd. (NSDL) and Central Depository Services
(India) Ltd. In view of the compulsory dematerialization of company's
equity shares on stock exchanges, members are requested to
dematerialize the shares on either of the depositories as aforesaid.
AUDITORS:
Kantilal Patel & Co. Chartered Accountants, auditors of the company,
hold office until the conclusion of the ensuing Annual General Meeting
of the company and being eligible, offer themselves for reappointment.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO :
As the main business of the company is of finance, the company has no
activities relating to conservation of energy or technology absorption.
The company has had no foreign exchange earnings or out goes during the
year under review.
PARTICULARS OF EMPLOYEES:
There are no Employees covered by section 217 (2A) of the Companies
Act, 1956 read with Companies (Particular of Employees) Rules, 1975 as
amended.
ACKNOWLEDGEMENT:
The Directors would like to place on record their sincere appreciation
to all the employees of their Continued effort towards the growth of
the company and would also like to express their thanks to the Bankers,
Shareholders and Fixed Depositors for their support and contribution
which enabled the company to achieve its goals for the year.
FOR AND ON BEHALF OF THE BOARD
Place : NADIAD. Harshad Dalal
Dated : 30th May 2012 CHAIRMAN
Mar 31, 2010
The Directors hereby present their SEVENTEENTH Annual Report together
with the audited accounts of the company for the year ended 31st March
2010.
FINANCIAL RESULTS: (Rs. in Lacs)
PARTICULARS YEAR ENDED YEAR ENDED
31/03/2010 31/03/2009
Total Income 639.51 639.22
Profit Before Depreciation & Tax 226.82 155.95
Depreciation 8.75 8.62
Profit Before Tax 218.07 147.33
Provision for Tax
- Current 76.00 51.20
- Deferred (1.64) (1.95)
- Fringe Benefit Tax - 1.14
Provision of Income Tax
of earlier period 0.05 (2.95)
Profit After Tax 143.66 99.89
Balance of Profit Brought forward 47.02 57.49
Profit available for Appropriation 190.68 157.38
APPROPRIATION
- Proposed Dividend 41.40 34.50
- Corporate Tax on Dividend 6.88 5.86
Transferred to
- Statutory reserve 28.73 20.00
- General reserve 60.00 50.00
Balance Carried to Balance Sheet 53.67 47.02
DIVIDEND:
Your company has consistent dividend policy, maintaining balance
between appropriate rewards to the shareholder as well as retaining
capital to maintain healthy capital adequacy ratio to support future
growth.
In consistent with this policy, and looking to the current year overall
performance during 2009-10, your directors are pleased to recommend a
dividend of 12% p.a, i.e. Rs.1.20/- per equity share aggregating
Rs.41.40 lacs for the year ended March 31, 2010 as against Rs.1/- per
share for the year ended March 31, 2009. This dividend shall be subject
to tax on dividend to be paid by the Company.
OPERATIONS:
The financial performance during the fiscal year 2009-10 remained
healthy. Total revenue including income from operations and other
income remained constant to Rs.639.51 lacs from Rs.639.22 lacs in
previous year. Personnel expenses increased marginally from 69.03 lacs
in the previous year to Rs.72.13 lacs in the current year mainly due to
increase in the remunerations. However the profit before tax increased
by 48.01% from Rs.147.33 lacs in the previous year to Rs.218.07 lacs in
the current year 2009-10. This mainly due to concentration of the
company toward its recovery systems, which helped the company to curb
NPA and recovery of earlier debts, at considerable level. Your company
also able to raise cheaper funds during the year. Company, after
providing tax of Rs.76.00 lacs in the current year (Rs.51.20 lacs in
previous year) profit after tax remained 143.66 lacs against Rs.99.89
lacs in the previous year, registering growth of 43.82%.
The disbursement in the current year also remained slightly higher at
Rs 2506.94 lacs compared to Rs.2390.87 lacs in previous year. The
Companys strategy to focus for the business in smaller places and
specialization in two/three wheeler segment has remained unchanged.
Hypothecation / loan stock of the Company has slightly decreased from
Rs.2513.13 lacs in previous year to Rs.2388.18 lacs in the current
year.
The assets of the company are properly and adequately insured and
recoveries are at satisfactory level.
FUTURE OUTLOOK/ MANAGEMENT DISCUSSION AND ANALYSIS:
Indias growth rate was hampered last year by the global economic
crises and poor monsoon. Fortunately, after witnessing significant
slowdown in the fiscal year ended March 31, 2009, the Indian economy
bounced back during the last financial year. This is mainly due to
strong domestic consumption and monetary and fiscal measures undertaken
by government helped the economy to turnaround performance. GDP growth
is around 7.8% for the fiscal year ended March 31, 2010 as against 6.7%
for the year ended March 31,2009.
As far as growth of service sector is concerned, growth was leaded by
community, social and personal services reflecting increased government
expenditure. However private services such as trade, transport and
communication gathered pace and are likely to keep service sector
growth strong through the next financial year. Overall service sector
growth was estimated at 8.5% in the last fiscal year as against 9.7% a
year ago while private services are estimated to have recovered from
growth rate of 8.4% in the year ended March 31, 2009 to 8.9% in the
last fiscal year. However agricultural growth and drought is giving
major effect on the performance of the company. In spite of poor rainy
season, ongoing recovery was the fact that the economy successfully
weathered a drought. Our companys growth is more important especially
looking to the concentration in rural area for the business.
In spite of decline in effective lending rates, system credit growth
remained subdued over the year with some signs of a pick up in the
growth rates in the last quarter of the year. Banking sector also yet
having some negative complex to lend and passing off the effect of
decline lending rates to small regional NBFCs. The company has partly
succeeded to avail cheaper sources of fund. The continuous efforts to
search for cheaper money is constant threats, however banking rates are
tends toward on the lower side compared to last year.
The company grew its retail assets portfolio in a well balanced manner
focusing on both returns as well as risk. Company intends to follow
conservative view in the coming years. Company also expects continuous
threats to small/medium Company like us, from global/giant players in
the retail finance market especially with large size/ volume, lower
rate of interest and ability to sustain in the market. The objective of
the company is to continue building sound customer base, excellent
dealership relations and focused towards semi-urban/rural sector to
sustain with stability and sound growth. The companys range of retail
financial products and excellent services and branches net work is
fairly exhaustive to meet up the coming challenges. The objective is
continue to build sound customer/dealer friendly atmosphere to achieve
healthy growth in profitability, consistent with companys risk
appetite. It is also focus of the company to continue to develop
products and services that reduce its cost of funds and focus on
healthy earning growth with low volatility. So far as volume of
business and segment of the business is concern, your company is
confident to maintain its existing business. Simply India is one of the
fastest growing economies and is having young and expanding workforce
along with huge consumer market. Growing education among the youth in
India, expansion of middle class and trickle down effects of overall
prosperity in rural areas augur well for economic development in India.
The need for effective and efficient transportation will rise more
rapidly than before. At the same time the value consciousness of Indian
middle class will mean that market growth will be mainly focused in
areas of two wheelers/ motorcycles and small cars.
The company in the course of its business is exposed to various risks,
of which the most important are credit risk, market risk, liquidity
risk and operational risk. An increase in NPA will restrict the ability
of the company to grow further. Sound risk management supported by
recovery strategy and continuous exercise to build health port- folio
is the key factor for the company. Especially a small capital based
company faces multiple problems due to poor recovery systems. The
credit cycle in retail assets business is managed through appropriate
front-end credit, operational and collection processes. The specific
NPA provisions that the company has made continue to be more
conservative than the regulatory requirements. This will help the
company to maintain high standards for assets quality through
disciplined credit risk management. The current year operation is
reflection of the credit monitoring system of the company.
RESOURCE MOBILATION:
As mentioned earlier, company is in constant search to avail cheaper
fund to reduce our cost of funds. However there is no change in overall
cash credit limits of Rs.975 lacs with the Banks.
Despite of lower rates of interest, the fixed deposit of the company
increased from Rs.397.53 lacs in the previous year to Rs.440.54 lacs in
current year. Inter Corporat Deposit reduced from 853.50 lacs in the
previous year to Rs.506 lacs in current year. However utilization banks
limits increased from Rs.484.12 lacs to Rs.649.93 lacs in current year.
CAPITAL ADEQUACY:
Your companys Capital Adequacy Ratio stood at 45.10%, well above the
regulatory minimum of 15%. The revised Guidelines issued by R.B.I for
recognition of Income, asset classification, Investment accounting,
provision for non-performing assets and capital adequacy have been
followed by your company. The company has also made the provision for
non performing assets in case of Sub-standard, doubtful and loss assets
as per R.B.I, guidelines.
FIXED DEPOSITS:
The Company has raised fixed deposits of Rs. 440.54 lacs as on 31st
March, 2010. At the close of the year, deposits amounting to Rs. 1.17
lacs remained unclaimed or due to be renewed by 8 depositors. The
Company has sent reminders before the due dates to all depositors. The
company does not have any claimed but unpaid deposits.
DIRECTORATE:
Mr.Kiran Patel and Mr. Deepak Patel are liable to retire by rotation at
the ensuing Annual General Meeting and being eligible offer themselves
for reappointment.
Mr. Bhikhubhai Patel and Mr. Jimin Patel were appointed as an
Additional Director on 31st March 2010 pursuant to section 260 of the
Companies Act, 1956 and Article 114 of the Articles of Association of
the Company. As per the existing provision, they will vacate office at
the ensuing Annual General Meeting of the company. The company have
received notice under section 257 of the Companies Act, 1956 from a
members signifying the intention to propose at the ensuing general
meeting, the appointment of Mr.Bhikhubhai Patel and Mr.Jaimin Patel as
director of the company.
CORPORATE GOVERNANCE:
As per clause 49 of the listing agreement with stock exchanges, your
company was required to implement the code of Corporate Governance.
Accordingly, your company has complied in all material respects with
the features of the said code. A report on the same is given
separately.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956 the Directors
confirm:-
(i) that in the Preparation of the Annual Accounts for the Financial
Year ended 31st March, 2010, the applicable Accounting Standards had
been followed along with proper explanation relating to material
departures;
(ii) that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
Profit of the company for the year under review;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the Annual Accounts for the
financial year ended 31st March 2010 on a going concern basis.
LISTING AGREEMENT WITH STOCK EXCHANGES:
Pursuant to the provisions of listing agreement with stock exchanges,
the equity shares of the company are listed at Ahmedabad (regional) and
Mumbai stock exchanges.
DEPOSITORY SYSTEM
Your company has established electronic connectivity with National
Securities Depository Ltd. (NSDL) and Central Depository Services
(India) Ltd. In view of the compulsory dematerialization of companys
equity shares on stock exchanges, members are requested to
dematerialize the shares on either of the depositories as aforesaid.
AUDITORS:
Kantilal Patel & Co. Chartered Accountants, auditors of the company,
hold office until the conclusion of the ensuing Annual General Meeting
of the company and being eligible, offer themselves for reappointment.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO.
As the main Business of the company is of finance, the company has no
activities relating to conservation of energy or technology absorption.
The company has had no foreign exchange earnings or out goes during the
year under review.
PARTICULARS OF EMPLOYEES:
There are no Employees covered by section 217 (2A) of the Companies
Act, 1956 read with companies (Particular of Employees) Rules, 1975 as
amended.
ACKNOWLEDGEMENT:
The Directors would like to place on record their sincere appreciation
to all the employees of their Continued effort towards the growth of
the company and would also like to express their thanks to the Bankers,
Shareholders and Fixed Depositors for their support and contribution
which enabled the company to achieve its goals for the year.
FOR AND ON BEHALF OF THE BOARD
Place : Nadiad Harshad Dalai
Dated : 29th May, 2010 Chairman
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