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Directors Report of Ceejay Finance Ltd.

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 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, 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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