Annual Report: 2023
Berar Finance Limited - Annual Report 2022-2023 Summary
Overview: Berar Finance Limited presents its 33rd Annual Report for the financial year ended March 31, 2023. The company, registered with the Reserve Bank of India as a Systemically Important Asset Finance Company-Deposit Taking, continued to show satisfactory growth. The company operates in rural and semi-urban India and is classified as a NBFC - Investment & Credit Company (NBFC-ICC).
Financial Performance: The company's business operations grew during the year. Gross income increased by 24.12% compared to the previous financial year. Key financial highlights (in lakhs) include:
Funding Resources: The company utilizes various funding resources, including:
Review of Operations & Future Outlook: Financing of two-wheelers remains the company's main product, with new loan products like personal loans, used car loans, two-wheeler re-financing, and Loan against Property being offered. The company plans to add more branches during the financial year 2023-2024 to increase geographical coverage. The company anticipates continued growth in business and profitability and will maintain a diverse fund source.
Branch Network: 14 new branches were opened during the FY 2022-2023. As of March 31, 2023, the company had 115 branches in total.
RBI Guidelines: The company adheres to RBI guidelines including those on income recognition, asset classification, provisioning, capital adequacy, and credit concentration. The company's capital adequacy ratio was 26.33% as of March 31, 2023. The company is classified as a Systemically Important Asset Finance Company-Deposit Taking and falls under the category of NBFC - Investment & Credit Company (NBFC-ICC). The company is classified as a NBFC- Middle Layer based on Scale Based Regulation Framework. The LCR of the Company was 164.62% against the LCR requirement of 70% as on March 31, 2023.
Related Party Transactions: All related party transactions were at arm's length and in the ordinary course of business. No material transactions under Section 188 of the Companies Act, 2013.
Credit Rating: The company's credit ratings by CARE Ratings Ltd. and ICRA Limited for Fixed Deposits Programme and Long Term Bank Facilities are provided.
Statutory Auditors & Auditors' Report: M/s. Manubhai & Shah LLP, Chartered Accountants, Ahmedabad were appointed as Statutory Auditors. The Auditor's Report on the financial statements for the year ended March 31, 2023, is self-explanatory and unmodified. The Statutory Auditors have also submitted an additional report dated June 26, 2023 for FY 2022-2023, without comments or adverse remarks.
Internal Audit: The company has a Risk Based Internal Audit Policy. The Audit Committee regularly reviews internal audit reports and the effectiveness of internal controls.
Directors and Key Managerial Personnel (KMP): Information on changes in directors and KMP during the year is detailed, including appointments, resignations, and re-appointments. Mr. Rangarajan Srinivasan resigned as CFO, succeeded by Mr. Ravindra Dorle. The Board has an optimum combination of Executive and Non-Executive Directors, including a Woman Independent Director.
Performance Evaluation: The Board carried out annual performance evaluations of the Board, Chairman, committees, managing director, and individual directors.
Corporate Governance: The company is committed to high standards of corporate governance. A suo-moto exit offer scheme was floated for identified shareholders, and the company is seeking compounding of a past regulatory non-compliance matter before the National Company Law Tribunal (NCLT), Mumbai Bench.
Directors' Responsibility Statement: The directors confirm that applicable accounting standards have been followed, accounting policies are consistently applied, proper care has been taken for maintaining accounting records, and the annual accounts have been prepared on a going concern basis.
Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Other Employees of the Company The company adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company.
Risk Management: The Company faces inherent risks like credit risk, liquidity risk, interest rate risk, and operational risk. The Audit Committee, Risk Management Committee, and Asset-Liability Management Committee review and monitor these risks.
Internal Financial Controls: Internal Financial Controls are systematic and effective. The internal financial control with reference to the financial statements were tested and reported adequate and operating effectively.
Human Resources and Employee Stock Options Plan: The "Berar Employee Stock Option Plan, 2019” (“ESOP 2019"/"Plan") was introduced and 28,800 options were vested with employees during the period under review.
Conservation of Energy, Technology Absorption and Foreign Exchange: The company is not engaged in any manufacturing activity and implements energy-saving measures. The company is focused on technology upgrades such as cloud computing and AI and the company’s network security has been transitioned to IPv6. The company did not have any foreign exchange earnings during FY 2022-2023, but had foreign exchange outgo of ₹57.66 lakhs.
Corporate Social Responsibility (CSR): The company is pursuing CSR programs and projects as per its approved Corporate Social Responsibility Policy.
Disclosure under the Prevention of Sexual Harassment at Workplace Policy: The Company has complied with the policy for prevention, prohibition and redressal against sexual harassment of women at the workplace. No cases have been filed pursuant to the Act.
Other Statutory Disclosures: Information regarding statutory compliance, non-convertible debentures, and other disclosures are provided.
Acknowledgement: The Board of Directors expresses appreciation to members, depositors, debenture holders, banks, financial institutions, and regulators.
Economic Overview & Performance During the Financial Year 2022-2023: The Indian economy grew robustly in FY 2023, but inflation remained a concern. The company's primary business is financing two-wheelers, which saw double-digit growth after three years of decline. The Company's strategy involves differentiated customer acquisition, deeper engagement through technology, and a diversified product suite.
Management Discussion and Analysis: Provides further detailed analysis of the Company's performance, risk management strategies, and customer service initiatives.
Secretarial Audit Report: M/s. SPZ & Associates, Company Secretaries, Nagpur, conducted the Secretarial Audit for FY 2022-2023 and issued a report confirming compliance with applicable statutory provisions.
Report on Corporate Governance: Details the Board composition, committees, remuneration, and other aspects of corporate governance. Includes meeting attendance, director details, and qualifications.
Annexures: The report includes several annexures providing detailed information on Management Discussion and Analysis, Secretarial Audit Report, Corporate Governance, CSR Activities, Related Party Transactions, Employee Stock Option Plan, and other relevant details.
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